Not Enough Room at the Top for Manufacturer's Owning Family
Jan. 09, 1985
NASHVILLE, Tenn. (AP) _ There's really no room at the top of Werthan Industries Inc. for the 13 members of the family's fifth generation.
So Bernard Werthan Jr., president and chief operating officer, considers it good luck that none of his four children, or the nine others in the next wave of Werthans, is involved in the business that his great-grandfathe r launched before the turn of the century.
''We have encouraged them to do other things because there is really not enough room for 13 kids here,'' Werthan says.
But Werthan, 53, is not worried about finding his successor. ''There are always in-laws,'' he says.
The Werthan family holds nearly all of the stock in the bag-producing company founded by Meier Werthan. And the Werthan name can be found on the letterheads of other companies around Nashville.
''There are not many boards around town that don't have at least one Werthan family member on them,'' Werthan says.
Keeping it all in the family offers added pressure for the president, who must balance financial success and competition from billion-dollar giants along loyalty to relatives.
''We have some very important and competent executives who are not members of the family,'' Werthan says. ''But everybody has got to know that the president of the company will always be a Werthan.''
Werthan's brother, Morris, is executive vice president for manufacturing and administration. A cousin, Roger Cohn, is a vice president. Chief executive officer Herb Shayne is married to another cousin.
''The biggest problem a family business has is the desire to run it like a family instead of a business,'' Werthan says. ''The challenge is to find a balance between care and concern for loyal employees and meeting target objectives for return on investment.''
The business was built on the sale of cotton cloth and burlap bags when the founder drove a horse-drawn cart around Nashville picking up empty bags from merchants, fixing them up and reselling them to feed mills.
The company took off in 1901 with Meier Werthan's sons, Joe and Morris, at the helm. The two moved the business to St. Louis for 20 years, then it returned to Nashville and established the current sprawling complex that includes two former textile plants dating back to shortly after the Civil War.
But textile bag manufacturing ''died after the Second World War when paper bags really got big,'' Werthan says.
In 1975, the company closed much of its operation and went from 1,400 employees to 500.
''One of the things I envy about people who start new businesses is that they don't have this legacy of obsolesence,'' Werthan says. ''It really hurt me when we had to let all those people go because I had known many of them for many years.''
The business survived and now competes head on with large paper mills and in the more specialized field of consumer packaging. And it has diversified into unrelated fields with the purchase of Check Printers Inc. and a substantial interest in Synercom Computers Inc., a computer and computer software supplier.
But paper and plastic bags for such products as dog food, fertilizer and flour rank first at Werthan Industries.
An expensive technique called gravure printing is used to provide color packaging that the Werthans believe sets them apart from competitors.
''Not very many companies in the bag business have gravure printing and we don't think there is anybody in the United States who has a lower cost in making those bags,'' Werthan says.