Morning Brief: A Look At Fairchild Without Steiner
On Mondays we take a look at all business news that is local. Staff writer Michael S. Rosenwald has an intriguing look at the life and legacy of Jeffrey Steiner, the enigmatic chief executive of McLean's Fairchild Corp., which Rosenwald writes is struggling to survive the downturn.
"He was a former junk bond investor who became a high-flying -- literally, back and forth to Europe -- takeover artist," Rosenwald writes. "Controversy trailed him everywhere, particularly with shareholders criticizing Steiner's Fairchild Corp., for his extravagant pay packages. An entire chapter of the book 'In Search of Excess: The Overcompensation of American Executives' was devoted to him."
Steiner was also a prominent philanthropist, particularly to Jewish causes. The French government honored him for his contributions to the arts, naming him a Chevalier des Arts et des Lettres. He showed up at the fanciest parties on both sides of the Atlantic. Andy Warhol painted pictures of his children. Super investor Jim Cramer once called Steiner a larger-than-life character, and that character was always tied closely to Fairchild.
Fairchild, which sells aircraft parts and motorcycle apparel, has told investors that it faces "a very severe liquidity issue." It has missed two quarterly pension payments of nearly $1 million each, saying "we do not have sufficient liquidity to fund our pension plan obligations and satisfy ongoing operational costs."
In other news, staff writer Anita Huslin writes that the industry that traditionally has been fueled by workplace turnover and executive departures is feeling the repercussions of the economic downturn.
Over the past month, in response to shrinking revenue and declines in demand for their services, some of the nation's top executive search firms have announced or quietly begun implementing plans to trim their workforces, consolidate offices and move their services toward more business consulting work.
In the D.C. market, boutique firms with high-rent offices are downsizing to reduce expenses and meet corporate cost-cutting directives. Firms are luring top headhunters from the competition and trimming those who lack the active Rolodexes to keep clients coming in.
"The industry is on its back, floored," John W. Franklin Jr., president and founder of JWF Advisors, told Huslin. Search firms, Franklin said, "are all taking out the bottom fourth of their people."
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