The Hytrol Story

As the year 1970 progressed, Chuck Loberg approached Tom with an idea. It was a dramatic plan which called for Tom’s early retirement and incentives to Sam and Ralph. The plan was presented to Ralph and Sam. Ralph immediately turned the plan down. Sam went to Jonesboro and after some discussion also declined the plan. The whole idea was dropped. Chuck Loberg was Tom’s younger brother. Tom’s mother, Hilda Loberg, had once told Tom to “take care of Charles.” It was with that wish that Tom had brought Chuck into the conveyor business. Although Chuck had been with the company since its inception, Tom always knew that Chuck wasn’t interested in the conveyor business. Chuck wanted to do other things. Chuck had approached Tom and inquired about changing the ownership properties of Hytrol on several occasions. Tom was in control of the company, but Chuck desired to buy into the company so they would be equal partners, i.e., fifty-fifty. Tom politely refused, saying he had started Hytrol and had taken Chuck in, and wanted to be in control. Then Chuck asked Tom if he would sell the company to him. Again, Tom politely refused. Tom reasoned that he enjoyed running the business and felt very fulfilled. He was happy doing what he was doing. Chuck then said he had no choice and wanted to be bought out. Tom had already sensed this might be coming and had checked into the company’s worth. Tom offered Chuck $1 million for his share of Hytrol. Chuck took one day to think it over and returned the next day with a slightly different proposal. He wanted one and one-half the book value of the company, and he would count the inventory. Tom agreed. Chuck counted the inventory-- everything in the Hytrol plant-- even office furniture, paper, letterheads--- everything. He put a value on everything and multiplied it all by one and a half. It came to a grand total of $960,000 not quite $1 million. And with that, Tom bought out Chuck’s part in the company and Chuck moved on. 1970 was a year of new, innovative ideas and significant changes. Sales had increased, but only slightly and were somewhat disappointing. In January of 1971, Tom, Sam, and Ralph drove over to Memphis for the annual meeting. This year’s meeting was held at the Holiday Inn, Rivermont. It was now going to be up to Tom, Sam, and Ralph to guide Hytrol into the future. They comprised Hytrol’s board. 1970 had been an exciting year, but the new year’s projected sales figures were not very promising. They also were very concerned about the large monetary figure that had to be paid to Chuck Loberg. 17 t h e f o u r t h c h a i r