For a lot of Chicagoans, the first time they heard the name James W. Cozad was when he resigned last month as the head of Mayor Richard M. Daley`s casino commission.
The soon-to-retire chairman of Whitman Corp. quit the post shortly after he learned that a piece of real estate his company holds an interest in might be considered for Chicago`s proposed $2 billion casino-entertainment complex. To have continued to serve on the advisory panel under those circumstances, Cozad reasoned, would have, at the very least, given the appearance of a conflict of interest.
Daley understood Cozad`s position and accepted his resignation, with regret. Cozad was disappointed, too. He was looking forward to exploring whether casino gambling and Chicago are compatible.
But the biggest losers may be the citizens of Chicago. Though low in name recognition, Cozad has been one of the city`s more effective business leaders and his presence is apt to be missed.
That`s why Daley put him in charge of the Gaming Commission, a hybrid panel charged with weighing the pros and cons of a Las Vegas-style complex. The panel is to suggest a plan of action, advise the city how to build consensus among the various business interests and reach out to political factions and community groups.
Cozad appeared ideally suited for the task. The veteran business executive and Indiana native has spent the better part of the last 43 years building cohesive management teams capable of putting business proposals into perspective and developing strategic plans for carrying them out.
”I`ve always tried to be a consensus builder because, in business, I`ve always felt that it is less than intelligent not to do that when you have good people, which most companies have,” Cozad said in an interview.
”For one individual to think he has the answers to everything is not very smart.”
Cozad has spent the last 28 months putting his consensus-building expertise to use as chief executive, as well as chairman, of Rolling Meadows- based Whitman. The company, once known as IC Industries Inc., is the holding company for soft-drink bottler Pepsi-Cola General, the muffler shop franchiser Midas International and Hussmann Corp., which makes refrigeration equipment for food stores.
This week, however, the 65-year-old Cozad will retire from Whitman and turn the reins over to Bruce W. Chelberg, 58, a Whitman board member and the company`s executive vice president.
Cozad`s retirement, which he has planned and talked about openly for months, will become official Thursday during Whitman`s annual shareholders meeting at the Art Institute of Chicago.
Some thought Cozad would be only a caretaker at Whitman when, in January 1990, he left Amoco Corp., where he was vice chairman. At Amoco he was credited with masterminding the $4.2 billion acquisition of Dome Petroleum Ltd. in 1988.
But like the ”caretaker pope,” Pope John XXIII, who radically reformed the Catholic Church in the 1960s, Cozad made some fundamental changes at Whitman during his brief tour and, in the process, turned the company around for the better.
Several analysts and long-time observers of Whitman point out that before Cozad`s arrival the company was, like many conglomerates, drowning in debt and watching helplessly as the value of its stock dwindled.
After Cozad arrived, Whitman underwent a major restructuring, spinning off its Pet Inc. subsidiary to Whitman`s shareholders. In addition, the company increased capital spending on its three remaining companies, making them more productive and efficient.
Also under Cozad, Whitman streamlined its corporate operations, reducing the number of corporate officers to 13 from 24 and corporate expenses by about $40 million after taxes.
During his short tenure at Whitman, Cozad succeeded in raising the company`s identity within the business community and the marketplace. That`s something the company had found difficult after its 1988 name change.
But, most important, say analysts and observers, Cozad put together a solid, closely knit management team from within the company that has given Whitman a new, positive direction, focused on consumer-oriented products.
”It has become a cleaner, more-focused consumer company, and we look for significant margin expansion in each of its three businesses over the next three years,” said James Murren, an analyst who follows Whitman for C.J. Lawrence Inc. in New York.
Focus is something Whitman lacked before Cozad arrived, say analysts. For years, the company`s direction, if, indeed, it had one, was obscured by the fact that it was a huge conglomerate consisting of dozens of diverse companies.
In fact, when IC Industries was still in the fast-paced acquisition mode in the `60s and `70s, it bought and sold as many as 250 companies. Its wild collection of holdings ranged from Pneumo Corp., an aerospace concern, to Dad`s Root Beer, and, of course, its original but since-divested holding, Illinois Central Railroad.
Also under Cozad, Whitman stockholders have seen the value of their investment, and the company`s earnings, double. Debt was reduced to about 59 percent of capitalization from about 65 percent. Company officials project that the percentage of debt to capitalization will be down to the mid-50 range by the end of the year.
Cozad recalled how some analysts were surprised when the company divested itself of Pet in September 1990. The popular theory among analysts at the time was that Whitman wanted to be a food company. They speculated that one of its non-food or non-beverage subsidiaries, either Hussman or Midas, would be spun off because they weren`t complementary to Pet or Pepsi General.
Moreover, analysts at the time noted, Whitman couldn`t get rid of Pet because it accounted for about 45 percent of Whitman`s pretax operating income and 55 percent of its revenues.
But Cozad said spinning off Pet made perfect sense.
”At the time, it was clear to us we had a stock that was declining,” he said. ”We had to make some dramatic move to show to investors that we were determined to turn things around at Whitman and increase earnings. We determined that Pet had greater value as a free-standing company than it did as part of Whitman, so we decided to let it go.”
Cozad also said the idea of Pet and Pepsi General being complementary really wasn`t accurate, noting that the synergy between a food company and a beverage business was far less than outsiders might presume.
For investors, Cozad`s decision to spin off Pet turned out to be the right one. Whitman stock was trading at around $17 a share in September 1990. Today, the combined price of a share of Whitman and Pet stock is about $35.
Cozad said he would have delayed retirement if Whitman was still experiencing serious problems. That won`t be necessary because the company
”is on the right track and in the hands of very good, seasoned executives,” he said.
Cozad won`t be departing the corporate world altogether. The Glenview resident will remain on Whitman`s board and on several other corporate boards. He also plans to remain active in civic affairs, tending to his duties as a director of the Indiana University Foundation, the Museum of Science and Industry, the Chicago Zoological Society and Northwestern Memorial Hospital.
In June he also expects to become board president of Chicago`s Lyric Opera.
Long-deferred family matters also will get attention. Or as Cozad put it: ”My wife says you now owe me time.”
