SoftBank founder Masayoshi Son speaks in futuristic terms about his company, but the success of his late-stage VC fund is still unknown.Technologyread more
Reports of Tesla vehicles spontaneously catching fire could make customers wary of EVs just as the industry ramps up production plans.Autosread more
Amazon's large and flashy investments stand out from those of its tech peers over the past year.Technologyread more
Huawei Technologies will immediately lose access to updates to the Android operating system, a source close the matter told Reuters.Technologyread more
Trump's relationships with Deutsche Bank have drawn scrutiny in Congress and elsewhere. Trump sued the bank last month to prevent it from complying with Congressional...Financeread more
The 2019 PGA Championship wraps up on Sunday, May 19. Here's how much money the champion will earn.Earnread more
Consumer IPOs from Snap to Uber have been disappointing and serve as a reminder that private investors are making all the money.Technologyread more
China's currency has been an important barometer for progress in U.S.-Chinese trade talks, and right now it's signaling things aren't going well.Market Insiderread more
The move comes after star runner Alysia Montaño's May 12 op-ed in the New York Times in which she detailed her experiences with Nike.Retailread more
The outrage has even inspired a Change.org petition called "Remake Game of Thrones Season 8 with competent writers," with over half-a-million signatories and climbing.Entertainmentread more
While the prolonged fight has been devastating to an already-struggling agriculture industry, there's little indication Trump is paying a political price.Traderead more
TORONTO — Trian Partners co-founder and chief investment officer Ed Garden said Thursday that PPG Industries needs to replace its "struggling" management to reverse disappointing profit at the global coatings company.
Garden told investors at a conference that current PPG CEO Michael McGarry should be replaced by former chief Chuck Bunch, who "knows how to run this business." Garden also said PPG should consider splitting into two focused companies: a global architectural coating company and an original equipment and industrials company.
Trian, the activist hedge fund Garden founded with billionaire Nelson Peltz, is known for taking stakes in companies and pushing them for change. It recently won a high profile battle to get a seat on the board of Procter & Gamble. Shares of Pittsburgh-based PPG are up 3.9 percent on Thursday.
"At Trian, we're known for working with management teams. ... But this is an extraordinary situation," Garden said from the Capitalize for Kids Investor Conference in Toronto, Canada. "After a decade of realizing attractive returns under the former CEO Chuck Bunch, PPG has underperformed under the current CEO."
Trian disclosed a $690 million position in PPG Industries earlier this month, representing a 2.9 percent stake in the 135-year-old manufacturer. The fund released a white paper detailing its vision for PPG on Thursday.
PPG is one of largest coatings manufacturers in the world, with a market capitalization of about $26 billion. Thanks to PPG's scope and scale, the company is seen as a corporate barometer for the health and direction of the global economy.
On October 8, PPG issued a profit warning, informing investors that the company expects to miss consensus estimates by 10 percent in the third quarter and by 20 percent in the fourth quarter, Garden said. This marks the third consecutive third-quarter profit warning for PPG, the Trian CIO said.
The company also lost its business with home improvement retailer Lowe's in February, a major loss for its paint business. Garden also said that while management is struggling to keep a lid on material and foreign exchange costs, the board has some options left.
"PPG is a company that is pretty much immune from the typical disruptive forces," he said. "There's no Amazon risk, there's no changing consumer risks ... it's a business with a really good moat."
Trian is urging the company to consider separating into an architectural coatings company and an industrial coatings company, allowing the company to create value through two "pure play" businesses. The split could also help its architectural business focus on growth and strategic planning as it loses market and and misses opportunities, according to the Trian thesis.
In a statement on Thursday, PPG said two of its directors have already met with Trian. "We have a long history of listening to our shareholders and we hope that Trian is willing to accept our offer for a continuing, constructive private dialogue," it said. "At the meeting and in subsequent conversations, PPG's directors made clear that the Board of Directors unanimously supports Michael McGarry as Chairman and CEO, but that PPG and the Board are open to listening to Trian on other topics. PPG's Board and management team remain dedicated to creating value for all PPG shareholders."
Garden, who is currently a director of General Electric, has previously served on the boards of Pentair, Wendy's and Family Dollar Stores. Garden and Peltz founded Trian in 2005.