Robert schad net worth

Harvard Business School 9-799-157 Rev. March 28, 2008

Assistant Professor Jan Rivkin prepared this case as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation.

Copyright © 1999, 2001, 2008 by the President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685 or write Harvard Business School Publishing, Boston, MA 02163. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise— without the permission of Harvard Business School.

1

Husky Injection Molding Systems

From his second-story office, Robert Schad looked out over the production bays below where new Husky plastic injection molding machines were going through their paces. Since founding Husky in 1953, Schad had built the Canadian company into one of the world’s premier manufacturers of plastic injection molding equipment. Customers used Husky equipment to make plastic products ranging from soft drink bottles and yogurt cups to automotive components and computer housings. Husky was known for building the highest-performance machines in the business…and charging a hefty premium for them.

In the early 1990s, Husky had enjoyed explosive growth and profitability. Revenue had grown from $250 million in 1992 to more than $600 million in 1995, net income had quadrupled, and the company registered a return on equity approaching 40%.1 Then suddenly, in late 1995, everything seemed to fall apart. Competitors entered Husky’s most lucrative markets with equipment sold at very low prices. At the same time, a shortage developed for certain of the resins used to make plastic products, and machine demand plummeted. The resulting excess capacity triggered a market share battle among machine competitors. It looked like 1996 was going to be a tough year financially.

Schad and the rest of Husky’s management team struggled with how to respond. Some members of the team argued that the company had to stand and defend its traditional markets, while others favored fighting fire with fire and expanding into competitors’ markets. Some advocated slashing expenditures aggressively, while others argued that generous funding of engineering, development, and service was money well spent. And all of the managers looked to Schad—at 67, still the driving force in the company and deeply involved in day-to-day operating decisions—for clear direction.

The Market for Injection Molding Equipment2

The market for plastic injection molding equipment and related services, in which Husky participated, was part of the larger, roughly trillion-dollar global plastics sector. Three types of players comprised the plastics sector: processors, resin makers, and equipment manufacturers. (See Figure 1.) Processors manufactured thousands upon thousands of plastic items and sold them to downstream manufacturers, retailers, and end-consumers. Common plastic products included automobile dash boards and bumpers, food packaging, synthetic fibers, catheters and syringes,

For the exclusive use of B. Yuan, 2018.

This document is authorized for use only by Baikang Yuan in Strategy In Action Spring 2018 taught by Lefevre, Northeastern University from January 2018 to July 2018.

799-157 Husky Injection Molding Systems

2

electrical connectors, trash barrels, toys, piping, and computer keyboards. Processors ranged from Plastipak, which made soda bottles and other containers, to Motorola, which produced cellular telephones, to General Motors, which made plastic automotive parts.

Figure 1 The Plastics Sector