Schipke resigns as Ryland chief Accepts top 2 posts at Sunbeam-Oster

August 03, 1993|By Timothy J. Mullaney | Timothy J. Mullaney,Staff Writer

Roger W. Schipke resigned yesterday as chairman and chief executive of the Ryland Group Inc. to take the same positions at the Sunbeam-Oster Co., a move that returned the real estate executive to his former career in the consumer appliance business.

Piper & Marbury partner Andre W. Brewster and former MNC Financial Inc. chairman Alan P. Hoblitzell Jr. temporarily assumed the top posts of the Columbia homebuilder.

Sunbeam-Oster, of Providence, R.I., said Mr. Schipke had agreed to take over the consumer products company effective immediately. About an hour later, Ryland announced Mr. Schipke's departure and its interim management arrangements.

"It was completely unanticipated," Mr. Brewster said. "It was not something he sought. They came to him."

Mr. Schipke could not be reached for comment yesterday, but said in a statement that he was attracted by the prospect of returning to the consumer appliance business. Before agreeing in 1990 to join Ryland, he was head of General Electric Co.'s appliance business, which he has said he left because he was not in line to become head of the corporation.

Sunbeam-Oster has been searching for a chief executive since January, when Paul Kazarian was dismissed after a series of run-ins with other top managers. Mr. Kazarian sued, settling for $3.9 million in cash plus $173 million the company pledged to buy back stock owned by Mr. Kazarian and two associates. Employees accused Mr. Kazarian of being an overly combative boss and of displaying erratic behavior.

Mr. Brewster, who has been on Ryland's board since 1977, will become interim chairman and chief executive officer. Mr. Hoblitzell, who has been Ryland's chief financial officer since 1991, will become acting chief operating officer.

Mr. Brewster said the company hoped to name a replacement for Mr. Schipke by year's end. "I don't have a timetable that's specific," Mr. Brewster said.

Mr. Schipke's move followed a month of negative news for Ryland, which has been slow to recover from the home building recession. A key stock analyst took Ryland off his firm's list of most-recommended stocks; Moody's Investors Service, a bond

rating agency, said it was considering lowering Ryland's bond rating; and earnings early this year were a significant disappointment.

Ryland's home building operations lost money for the first half of the year, and only its mortgage finance business kept the overall company from running in the red. The results were surprising to some analysts who had praised the company for managing itself prudently enough to avoid major losses early in the 1990-1991 recession.

Mr. Brewster said the move surprised Ryland's board. Indeed, Mr. Schipke had shown signs of settling into Baltimore for a long stay, joining the boards of the Greater Baltimore Committee, Legg Mason Inc. and the Rouse Co., and serving as president of the Maryland Million horse race.

"We've got no problem with him at all," Mr. Brewster said. "He set the company up with objectives and strategies we are going to follow up on."

Wall Street's reaction to Mr. Schipke's departure was mixed. The company's stock rose 62.5 cents, to close at $18 a share, but several other homebuilders' stocks rose as well during a generally upbeat day in the stock market.

"You're going to get a big difference in opinion," said Lawrence Horan, a home building industry analyst for Prudential Securities Inc. and generally a Schipke admirer.

Mr. Horan said Mr. Schipke accomplished what Ryland's board brought him in to do: instill in the company the type of large company management controls he had learned at GE. Ryland grew rapidly during the 1980s and shared with other homebuilders the habit of focusing more on specific projects than coherent management of the overall company.

"He took out layers of overhead in headquarters and did a lot of things to bring [Ryland] into a 1990s management style," Mr. Horan said. The results "are just starting to show up in orders" for Ryland-built homes, which were up 15 percent in the second quarter from the same months of 1992. "It should show up in [profit] margins" in coming quarters, Mr. Horan said.

But Mr. Horan removed Ryland last month from Prudential's list of "Single Best Idea" stocks, saying its stock had dropped 20 percent since Ryland was placed on the list.

Barbara Allen, an analyst at Donaldson, Lufkin & Jenrette in New York, was sharply more critical. "Ryland is clearly underperforming," she said. "I think this is a good move for Ryland."

Ms. Allen said other homebuilders, such as Texas-based Centex Corp. and Pulte Home Corp., based in suburban Detroit, have done far better than Ryland in capitalizing on the modest economic recovery. And, she said, Ryland has not met expectations that it would expand its share of the homebuilding market.

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