Miles Fires Two Managers Amid Justice Department Probe
PITTSBURGH (AP) _ Miles Inc. said Wednesday it has fired two executives who violated company policy in communications with rival Dial Corp., prompting a federal investigation of possible price-fixing in the scouring pad market.
Stephen M. Reim, senior vice president of Miles and president of the company’s Consumer Household Products business unit, and Charles C. Culshaw, director of marketing for the same business, were dismissed Monday, the company said.
They violated company policy concerning discussions of pricing and customer territories and lists, topics ″that could be potentially anti-competitive in nature,″ said Miles spokesman Elliot S. Schreiber.
The household products division makes S.O.S. soap pads, the leading brand. Dial of Phoenix, Ariz., makes Brillo pads.
The Justice Department has a grand jury investigating possible antitrust violations, according to department spokeswoman Gina Tolamona. Miles and Dial confirmed they have received subpoenas and both companies said they would cooperate with the investigation.
Neither the Justice Department nor Miles would discuss the matter in detail, but John W. Teets, chairman, president and chief executive officer of Dial, confirmed the federal investigation is focusing on pricing in the scouring pad market.
He said the company has thoroughly investigated its own management and personnel practices.
″We have found absolutely no evidence of any wrongdoing on behalf of Dial or any of our executives,″ he said.
Miles had scheduled an appointment to tell the Justice Department about the situation, but the Justice Department contacted the company first, Schreiber said.
″We have a very strict policy with regard to what’s considered improper communication with competitors,″ Schreiber said.
Reim had headed the unit since 1987. Hermann R. Werner, executive vice president of Miles’ Agriculture Division, will head the Household Products division until a permanent successor is named. The Household Products Division is part of the Agriculture Division.
Miles, a chemical, health care and imaging technologies company, also makes Alka-Seltzer, Bactine, Flintstone and One-A-Day vitamins. It has annual sales of $6.5 billion.
The S.O.S. trademark, dating to 1916, stands for ″Save Our Saucepans.″ Miles sells other products under the S.O.S. label, including window cleaner.
Dial, a consumer products company with $3.4 billion in annual sales, also makes Dial soap, Armour meats and provides catering and transportation services.