The timing couldn't have been eerier.
Word came out Monday night that Bob Stempel, the former CEO at General Motors, had died Saturday in Florida. Tuesday morning, Energy Conversion Devices Inc. announced both that it had a disastrous third quarter and that Mark Morelli had stepped down as president and CEO.
GM was where Stempel got famous. He joined the auto company as a detailer in the chassis department at Oldsmobile in 1952, rose to president and COO by 1987, became chairman and CEO in 1990 and was forced out by the board in 1992.
ECD was where Stempel had the most fun. He joined ECD in 1995, a CEO who got to spend much of his time as an engineer, immersed in a wide range of physics problems awaiting solutions that he and ECD founder Stan Ovshinsky always thought were closer at hand than they were. He promised Stan a year and stayed for 12.
On Sept. 1, 2007, Morelli replaced Stempel as CEO of the often struggling alternative-energy company, its board wanting an executive who would focus on selling an actual product to the marketplace even if it meant ignoring some of the gee-whiz science that Stan and Bob never stopped being enamored by.
Word spread Monday night of Stempel's death. Tuesday, some analysts began speculating that ECD may once again be near death, too, something several generations of analysts have been speculating about since soon after ECD went public 50 years ago.
What's he doing?
Here's something I wrote in a profile of Stempel in 1996:
"What is Bob Stempel doing at Energy Conversion Devices? From the largest company in the world, with hundreds of thousands of employees, to a little Troy outfit with 300 workers? From a manufacturing giant that in a good year makes millions in profits to a traditionally under-performing company that has broken stockholders' hearts on and off for 30 years?
"Despite his unhappy departure from GM, Stempel is still considered something of an engineering legend and a leader who, by all accounts, was unsurpassed at instilling loyalty and a sense of teamwork. So what in the world is he doing working with electric batteries, or solar panels?
"Having the time of his life."
Stempel was just a kid in high school working at Ed Uniss' repair shop in New Jersey when he felt life's calling. "Those were the days when you invested in a good set of sockets and wrenches and feeler gauges, and you could make anything run," he recalled.
The better Stempel got at repairing cars, the more he saw that many of the things he was repairing were the results of inherent design flaws. He liked the work so much, he briefly thought of foregoing college, but Uniss told him: "You can do this the rest of your life, but if you want to make a difference with automobiles, you don't do it in my shop, you do it in Detroit."
Going to Detroit
And so Stempel left New Jersey for the Worchester Polytechnic Institute, and from there it was on to GM.
Stempel had a direct hand in many of the design changes and breakthroughs at Oldsmobile. He helped design, for example, the offset wheels on Olds' revolutionary (for GM, for the time) front-wheel drive Toronado, which debuted in 1965. "Me and my pencils and my triangles," Stempel would joke years later, a reference to that low-tech, pre-CAD era of automotive design.
Other key projects he either worked on, or pushed others to work on as he climbed the ladder, included catalytic converters, anti-lock brakes and shoulder safety belts.
In 1987, his favorite project of all would eventually lead to his work at ECD -- the Sunraycer, GM's solar-powered car that, piloted by a young Chevy engineer named Molly Brennan and five other GM teammates, easily won a 1,950-mile race across Australia.
When the announcement was made that Stempel would become GM chairman on Aug. 1, 1990, the news was greeted at company headquarters with loud cheers and a sense of euphoria. Employees had generally chafed under Roger Smith, whom they saw as a bean counter, a numbers guy, not a real car guy.
All car guy
Stempel was all car guy, a mechanical engineer who while still in high school had mortified his parents by buying a beat up Model A for $100 -- "my parents were upset by how many pieces it was in," he told me years later -- but he rebuilt it, then sold it at a nice profit to finance part of his college education.
His ascension to the chairmanship came at a tough time for the auto maker, its bloated ways and overcapacity in plants and personnel starting to affect the bottom line. In 1991, the company lost $4.5 billion, and its suddenly proactive board of directors, whose spiritual head was John Smale of Procter & Gamble, demanded changes.
The board forced the demotion of President Lloyd Reuss in March 1992. Smale then replaced Stempel as head of the board's executive committee, and rumors began to swirl. The perception was that Smale was actually running GM.
On Oct. 21, 1992, The Washington Post wrote that the board might soon fire Stempel and eliminate his beloved Oldsmobile division. The same day, the board hung Stempel out to twist in the wind, saying in a vague press release that the directors were "considering the wisest course for assuring the most effective leadership."
Five days later, the car guy announced his retirement. He told friends and colleagues and some reporters that the reason he was forced out was that he refused to go along with the sharp cutbacks and plant closings that Smale wanted.
He wanted to slow the pace of plant closings and shrink the workforce through attrition, not mass layoffs.
"You have to be true to your principles," Stempel would explain later. The board wanted immediate and dramatic downsizing. "But you have to consider the impact on people and on cities," he explained. "The board said, 'You have to accelerate it, do it faster.' If you have an honest difference, you part ways.
"I sat down with my wife and discussed it. I said, 'The company's going to change. They want to speed it up and we're at loggerheads. We can see this kind of media mish-mash going on for months. Or we can end it.'"
He ended it.
The research Stan and Bob oversaw at ECD was far reaching, too far reaching. They wanted to commercialize rechargeable consumer batteries, nickel metal hydride electric car batteries, hydrogen storage, fuel cells, devices to dramatically increase computer memory and performance, and flexible solar roofing panels to replace rigid and inefficient glass solar panels.
"It's like a kid in a candy store," said Stempel. "I'm having a hell of a time."
Eventually, in 2008, ECD's board, tired of the company's recurring cash flow problems and seemingly constant need for new financing or stock sales and having a wide range of technologies never quite ready for market, arranged for the graceful exits of both Stempel and Ovshinsky.
Wall Street wonder
Morelli pulled the plug on some projects, laid off some researchers and focused the company on its solar roofing products. He was briefly the wonder kid of Wall Street. He quickly delivered large increases in revenue and, wonder of wonder, profits.
Early in 2008, ECD stock was trading at $20 a share. Six months later, it was at $83.
Another alas: Morelli's business model relied on large construction projects in Europe that were heavily subsidized by German, Spanish and Italian governments eager to support clean tech with large subsidies.
But as the recession hit, commercial lending for large construction projects withered. And as the European Union began battling with debt crises in Ireland, Portugal and Greece, subsidies for better roofs withered, too.