Les Schwab Tire Centers Inc., one of North America's largest independent tire dealerships, will continue to be owned by the Schwab family, following the death of company founder Les Schwab.
The dealership said in released statements that it is committed to Mr. Schwab's vision and continuing the programs he started. Dick Borgman, who was named CEO late last year, declined interview requests from Tire Business but was quoted by The Oregonian as saying the company plans to add 10 to 12 stores this year and expects most of its expansion over the next few years to occur in California.
Unlike most of Les Schwab Tire Centers' executives who started at company stores and rose up through the management ranks, Mr. Borgman joined the company as general counsel in 1990 after 10 years as a partner in a business law firm.
In 2002, following several years of various management assignments, he became senior executive vice president of administration, responsible for finance, real estate, information technology, tax, human resources, general administration and corporate planning. Phil Wick remains company chairman.
Although Les Schwab Tire Centers' 50-percent profit sharing plan and emphasis on customer service may remain unchanged, its corporate headquarters will move to a 120,000-sq.-ft. building in Bend, Ore., which should be completed by fall 2008. About 360 employees will transfer to Bend while 800 will stay in Prineville to work in the retreading, warehousing, transport and distribution center.
Judge Scott Cooper, the chief executive for Crook County, Ore., said the relocation of the company's corporate offices is evidence that Mr. Schwab's grand-children-now the next generation of owners-are willing to be flexible since Mr. Schwab never would have made such a decision.
``Les was adamant about keeping the headquarters in Prineville,'' he said.
Nick Hodel, CEO of Portland, Ore.-based Northwest Tire Factory L.L.C., said he hasn't seen Les Schwab Tire Centers change anything in the marketplace from a competitive standpoint, and Tire Factory is not poised to make any changes in its business strategy either.
Les Schwab Tire Centers also has said that corporate ownership will stay within Mr. Schwab's family. Both Mr. Schwab's children preceded him in death: son Harlan died in a 1971 car accident and daughter Margie Denton died of cancer in 2005.
Mr. Schwab's wife Dorothy and all four of their grandchildren sit on the company's board of directors. Mr. Cooper said the family has discussed and made arrangements for the ownership transition ever since it became clear that Ms. Denton-who was supposed to take over the company after Mr. Schwab-wouldn't survive her cancer battle. Her death was the beginning of Mr. Schwab's waning interest in the business, Mr. Cooper said.
``It was incredibly difficult for him, and you could see it,'' the judge told Tire Business. ``I mean, he aged from the day of Margie's death, you could see him aging. Then he kind of disappeared from view after that. I think his heart was forever broken.''
Both the Associated Press and The Oregonian have reported that public records reveal Ms. Denton willed properties around the Northwest to her husband and children that the company had leased from her. Her will showed that Mr. Schwab already had transferred some company stock and other assets to her two daughters, according to The Oregonian.
The company declined to confirm or deny those reports.
Mr. Cooper said it would be impossible to know if the family will always retain ownership. It's also impossible to know now what role Mr. Schwab's grandchildren will play in the company, he said, but the family had plenty of time to prepare for his death and the estate taxes.
``They did some excellent estate planning. I know that when Margie passed away, there were a number of insurance policies that helped cover the cost of the estate taxes,'' he said. ``They've done really good work. Whether it's enough work or not, we'll all know when the (tax) bill comes due.''