Robert Shaw's Shift of Focus

Dalton, GA, July 28, 2006--In none of its forms was "retire" used in Shaw Industries Inc.'s announcement of CEO Bob Shaw's plan to leave that post Sept. 1, according to the Chattanooga Times/Free Press. That omission was not accidental, said Mr. Shaw, who'll be 75 next month. "That's a dubious word," he said. "I'm stepping down as CEO, but having (at heart) the total interest of Shaw Industries--that won't change, period. "It would be ridiculous for me to believe I could see my name on all those trucks and not have an interest in the business," he said. That interest began in 1958, when he took over Star Dye Co., the business his father, Clarence, had bought a dozen years earlier. Working alongside his brother, J.C., he built the company to the point that it had $43 million in sales and 900 employees when it went public in 1971. Shaw made the Fortune 500 list in 1985, and a 1998 merger with Queen Carpets pushed the company's annual sales past the $4 billion mark. Billionaire investor Warren Buffett's Berkshire Hathaway Inc. bought most of Shaw in 2000 for $2 billion, then acquired the rest for $355 million in 2002. According to Berkshire Hathaway's 2005 annual report, Shaw posted sales of $5.7 billion last year and is Berkshire's largest subsidiary, at more than 30,000 employees. "I thoroughly enjoy my friendship with Warren, and now we've gotten to be business partners," Mr. Shaw said. "Most of what I have is in Berkshire Hathaway stock, and most of what he has is in Berkshire Hathaway stock. "There's just a little bit of difference in the amounts," said Mr. Shaw, who will remain on his company's board of directors. "I'm going to do what I can to help the new management succeed," he said. "If there's something they want to buy, they may ask me what I think." What he will "absolutely not" do, he said, is stay close enough to overshadow Vance Bell and Randy Merritt, the men chosen to succeed himself and retired Shaw president Julian Saul, respectively. "An organization needs to make sure the next generation has an opportunity to run the company," he said. "Am I going to be the one to make the mistakes? No. Am I going to take the blame? No. "They'll have to make their own decisions, and they'll make errors, but they'll learn more from those errors than they will from all their successes," he said. Shaw said his company "made a lot of errors" over the years. Shaw made a late-1990s foray into retail, buying 300 outlets, but the gambit was illfated. The company got out of retail in 1998, but Shaw defended the move. "There was criticism," he said, "but there were outside forces trying to figure out who'd control avenues to market for carpet. The mills? Fiber producers ? "I thought it was important that Shaw Industries have that control," he said. Shaw said he'll be fixed on a different kind of business after Sept. 1. From Dalton's former City Hall building, which he agreed in 2004 to renovate and lease, he'll be working to marry corporate and community interests. "(Business) has a responsibility, like any citizen, but it has more because it has more influence," he said. "I see a great opportunity to get business occupying itself with something other than corporate responsibility." Shaw said Dalton's made solid progress but isn't without challenges. Getting Dalton State College to the university level is one, he said, and the area's population growth demands that the area become Northwest Georgia's financial center, not just a "bedroom community" for Atlanta. "Bartow County is now about Whitfield County's size, and Gordon County's growing by leaps and bounds," he said. "Our Latino community has brought us challenges from an economic standpoint, but business leaders should be involved in making that an opportunity, not just a challenge."

Related Topics:Shaw Industries Group, Inc.