Black & Decker's annual meeting slinks out of town

March 10, 2010|By Jay Hancock

Taking a play from the Baltimore Colts, Black & Decker's headquarters is heading out of town on the sly.

For years the toolmaker has held its annual shareholder meeting in or near its Towson headquarters. The company's stock is widely owned in metro Baltimore, its home for a century.

But Friday's meeting, at which shareholders are expected to approve Black & Decker's sale to Stanley Works, isn't even happening in Maryland. If you want to vote in person or express an opinion, you'll have to make it by 9 a.m. to the Washington Dulles Airport Marriott in Virginia, 70 miles from Towson.

Putting the meeting at a Black & Decker factory in Mexico could hardly have cordoned it off more effectively from Baltimore. Instead of darkness and Mayflower moving vans obscuring the end of a Baltimore institution, it'll be the Capital Beltway at rush hour.

Black & Decker's board and top managers have vigorously promoted the merger, which will leave the combined company's power tool division in Maryland and shift the headquarters to Stanley's stronghold near Hartford, Conn.

But shifting the shareholder meeting to Virginia suggests they aren't all that proud of the deal.

"Since the meeting is only days away, we have no comment" on why the meeting is in Virginia, said Black & Decker spokesman Roger Young.

The Stanley-Black & Decker combo will eliminate thousands of jobs, including hundreds in Maryland. It throws Black & Decker's local philanthropy into doubt and removes a Fortune 500 corporate headquarters from a state that has struggled to add jobs that aren't connected to government.

Events have already put the lie to the "merger of equals" nonsense that Stanley and Black & Decker were trying to peddle. The companies have disclosed, for instance, that Stanley executives will be moving to Towson to take over key jobs, including the senior vice presidency of the power tool business.

The deal, struck last year, has come under renewed scrutiny in recent weeks, including how it was done and the fabulous post-merger package given to Nolan D. Archibald, who will become the combined company's executive chairman.

Turns out that one of the "independent" directors who approved the deal and Archibald's bonanza is also his partner in developing Red Ledges, a super-luxury Utah community where the "cottages" start at $900,000.

Two weeks ago, Baltimore investment banker Doug Schmidt, CEO of Chessiecap Inc., reported the relationship on the Web for Citybizlist. Archibald and director M. Anthony Burns co-own Red Ledges, yet Black & Decker's board allowed Burns to sit on a committee of board members charged with considering the merger.

This week, Black & Decker sputtered in a news release: "Mr. Burns has informed Black & Decker that his private business relationship with Mr. Archibald did not affect his evaluation of the Stanley transaction."

You'll have to get up pretty early Friday if you want to let the board know what you think about that or anything else.

Even to say it's doing a good job. Archibald's pay is indefensible, but as corporate mergers go, Black & Decker's marriage to Stanley is not terribly objectionable.

The companies operate mainly separate businesses, so there are few monopoly concerns. Black & Decker's stock has tripled in the past year, mostly since the Stanley deal was announced. Because Black & Decker's fortunes are closely linked to home sales, the stock has performed better than anybody could have expected after the housing crash.

But worries about being hoisted on chairs and showered with rose petals probably weren't what made Black & Decker directors draw the velvet rope in front of Baltimore. They're so insulated from reality they apparently don't even want to answer a couple of questions about job losses or Archibald's millions.

That's all that would have happened in Towson. Even the matter of the non-independent independent director is unlikely to derail Friday's proceedings.

The Stanley deal will give the combined company "a larger and more diverse business base," "stronger margins" and "$350 million in annual cost savings," according to the merger proposal the board sent to shareholders.

"Your board of directors recommends a vote 'FOR' the merger," says the document.

As they sell out the company founded in Baltimore in 1910 by S. Duncan Black and Alonzo G. Decker, it's amazing that they couldn't show their faces here to explain why.

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