Mooney, James P. 1947–

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James P. Mooney
1947–

Chairman and chief executive officer, OM Group

Nationality: American.

Born: December 19, 1947, in Berea, Ohio.

Education: Quincy University, BA, 1970.

Family: Son of James B. Mooney (founder of Mooney Chemicals).

Career: Mooney Chemicals, 1971–1975, various positions; 1975–1991, CEO and president; OM Group, 1991–1994, CEO and president; 1993–1994, chairman, CEO, and president; 1994–, chairman and CEO.

Awards: George S. Dively Entrepreneurship Award, Harvard Business School Club of Northeastern Ohio, 2000.

Address: OM Group, 50 Public Square, 3500 Terminal Tower, Cleveland, Ohio 44113-2204; http://www.omgi.com.

■ The chemical and materials manufacturing executive James P. Mooney was the CEO and chairman of OM Group, an international company that produced metal-based specialty products and related materials. Mooney was dedicated to maintaining the high quality that had historically characterized the company's products; although OM Group's components were a small expense in other companies' total manufacturing and processing costs, Mooney was well aware that the components were exceptionally critical in ensuring well-made finished products. Mooney consciously built up the company's reputation for being a reliable provider of innovative products with superior technical quality around the world.

MAJOR METAL MAKER

Through its operating subsidiaries, the Cleveland, Ohio–based OM Group was a leading vertically integrated global manufacturer and marketer of metal-based (especially cobalt, nickel, and copper) specialty organics (compounds based on carbon) and inorganics (compounds not based on carbon), chemicals, powders, alloys, and related materials. Such OM materials were used in about 30 major industries, including aerospace, appliance, automotive, ceramics, computer, construction, catalysts, electronics, hard-metal tools, magnetic media, paints and inks, petrochemicals, rechargeable-battery chemicals, rubber, and stainless steel. As of 2004, in 50 countries worldwide OM Group employed about 1,400 people, all of whom were involved in the various processes required to make and market about 625 products to about 1,700 corporate customers.

Mooney maintained OM Group manufacturing facilities and administrative offices in North America, Europe, Africa, Asia, and Australia. Under Mooney these facilities evolved to the extent where OM Group became the world's leading consumer, refiner, and producer of cobalt-based specialty chemicals (operating the largest cobalt smelter and refinery); a leading global producer of nickel inorganics, electroless nickel, and nickel powders; and the world's third-largest processor of platinum-group metals into final materials. OM Group also produced specialty chemicals and materials derived from barium, calcium, iron, manganese, potassium, rare earth metals, stainless steel, zinc, and zirconium. In all Mooney led OM Group to become one of the three largest specialty-chemical companies in the United States.

FAMILY-BASED BUSINESS

Founded in 1946 as Mooney Chemicals by James B. Mooney—James P. Mooney's father—the family company experienced success for nearly six decades, primarily in the area of metal carboxylates (any salt or ester of any organic acid that contains the carboxyl group). The younger Mooney joined the company in 1971, taking various positions that eventually led to his taking over for his father as president and CEO in 1975. At this time he made a series of key acquisitions in order to expand the company's role in the manufacturing and marketing of raw materials and metal-based chemicals.

GROWING WITH MERGER

In 1991 Mooney guided the company through a merger with the two European chemical companies Outokumpu Chemicals of Finland and Vasset of France (both of which were units of Outokumpu Metals & Resources of Helsinki, Finland). The merger occurred when Outokumpu decided to sell its cobalt chemical business in order to focus on mining. After negotiations with Mooney, Outokumpu acquired all of the Mooney family's stock in Mooney Chemicals except for about 4 percent, which was retained by Mooney's father; OM Group was formed, with Mooney remaining as CEO and president, holding the latter position until 1994.

In 1993 Mooney took the company public, becoming chairman of the board of directors. OM Group was first listed on NASDAQ and later moved to the New York Stock Exchange in December 1996. With OM Group's merger and consequent conversion into a public company, Mooney intended to quickly bring operations to an international level and expand the company's line of metal chemicals into three new industrial sectors: batteries, magnets, and steel.

ENLARGING WITH ACQUISITIONS

Mooney acquired companies with the goal of building on OM Group's core business in raw materials and metal-based chemicals. One of Mooney's major accomplishments after orchestrating the merger was the 1996 acquisition of the North Carolina–based SCM Metal Products for $122 million. SCM was the world's largest producer of copper powders, and Mooney saw the company as a good strategic fit within OM Group. Another important acquisition was that of the Newark, New Jersey–based Fidelity Chemical for $80 million in 1997. The addition of Fidelity allowed Mooney to expand his company into the high-technology electronics industry—specifically into markets for memory disks for printed circuit boards, information storage, and metal finishing. Also in 1997 Mooney purchased the privately held Auric Corporation, a producer of electroplating chemicals and metal concentrates.

OM Group more than doubled in size in 2001 when Mooney acquired the precious-metals and metals-management unit of the Germany-based Degussa Metals Catalyst Cerdec. This purchase gave Mooney the ability to operate within the areas of automotive catalysts, electroplating, emission-control devices, fuel cells, jewelry, metals trading, and technical materials.

COMPETITIVE ADVANTAGES

With this last merger and several subsequent acquisitions, Mooney had developed OM into a company with many competitive advantages, one of the largest and most unique of which was its vast capability for metal separation. The company could separate many metals then refine and process them for application in various industries on a global basis. For instance, OM could extract and process a nearly pure percentage of both cobalt and copper from the same project. Thanks to this ability Mooney was able to increase business opportunities in the marketplaces of North America, South America, and Asia.

AWARDS AND ACCOLADES

Early in 2002 Mooney's company became an outstanding player in the specialty-chemical industry, with a management team that was developing many new, unique products. The Cleveland newspaper Plain Dealer added OM Group to its list of Top Ten Companies in 2001, mostly because the company had posted 24 consecutive quarters of earnings and earningsper-share improvement and had grown an average of 18.5 percent annually since it had been taken public in 1993.

FIRST REAL DIFFICULTY

Moody started to have problems when in November 2002 the company's share price fell from $30 to about $6.50. At that time it became public knowledge that the company had been forced to reduce the value of its $108 million inventory as a result of lower cobalt prices. Earlier in the year, while both prices and demand had been low, Moody had raised the amount of cobalt OM Group had held in storage after predicting, inaccurately, that prices would rise; he had also anticipated additional sales to the Department of Defense's Defense Logistics Agency. Conditions within OM Group deteriorated further when the company reported disappointing earnings for its third quarter in 2002 and expectations of continued weakness in future earnings; OM also announced the necessity to institute a large restructuring plan in order to come into compliance with credit agreements. Faced with a mandatory payment on a huge margin call, Mooney was forced to sell over 710,000 shares of his stock in the company, which were worth more than $22 million—reportedly 90 percent of his net worth.

RESTRUCTURING PLAN

In December 2002 Mooney began a restructuring program that involved, in part, a realignment of OM Group's corporate and management structure. The company was divided into three business units—Nickel, Cobalt, and Precious Metals—which would be run by global vice presidents who would report directly to Mooney. The three new units, along with existing research-and-development and metals-management operations, allowed Mooney to institute better performance efficiencies within the company. The executive committee was reduced from four to two members: the chief executive officer, Mooney, and the chief financial officer, Tom Miklich. Miklich oversaw the communications, human-resources, information-technology, and legal departments of the company.

Knowing that he needed help, Mooney hired Credit Suisse First Boston as a financial consultant for the aggressive restructuring program he was implementing in order to strengthen the balance sheet and improve cash flow. Mooney announced in April 2003 that the company would have a $327.9 million net loss for 2002, mostly due to the one-time restructuring charge of $329.7 million that would be taken in the fourth quarter; still, he hoped to quickly return the company's performance to the level it had previously enjoyed.

At about this time Mooney announced that in order to reduce debt he would be discontinuing the production of tungsten fine powders, closing the company's tungsten-carbide fine-powders reclamation and cobalt-recycling facility at St. George, Utah, and selling the company's precious-metals unit along with other smaller units. Such efforts allowed Mooney to shift OM's focus back to the base-metals business surrounding cobalt and nickel-based products.

ANALYSIS AND FUTURE OUTLOOK

Analysts who followed OM Group felt that part of Mooney's problem laid with his huge expansion activities early on, which included the 2001 purchase of Degussa's catalyst business. After years of dealing with Mooney and his management team—who had gained a reputation for negotiating ruthlessly in every deal they made—traders of OM's metals did not prove especially sympathetic with the company's deteriorating condition.

As of the first quarter of 2004 Mooney announced that the company would delay its 2003 fourth-quarter and full-year results. This was due, according to Mooney, to complications with the U.S. Securities and Exchange Commission relating to previous filings made by the company. With high metal prices and increasing demand in many of its markets, Mooney was confident that the company could deliver higher sales, improved margins, and increased operating profits in the first quarter of 2004.

Mooney's plans for future growth included additional geographic expansion in Central and South America as well as a particular focus on the Asia Pacific region. Mooney wished to guide OM Group to the forefront of several emerging industries, including electronic chemicals and rechargeable-battery chemicals. He targeted the growth of OM products that were being used with increasing frequency in such high-demand items as memory disks, printed circuit-board assemblies, battery chemicals, and solder plating.

Mooney expanded OM Group through the development and marketing of technologically advanced product innovations—functions for which the company had been historically reputed. Worldwide, Mooney directed the company to provide the highest-quality products through an efficient and secure raw-material resourcing and manufacturing/supply chain. OM's unique vertical integration—which extended from base metals and concentrates to finished metal products and included extensive operations with metal powders, alloys, and specialty chemicals—gave its customers essential products at competitive prices. Mooney also developed a worldwide network of Technical Centers of Excellence, which shared the knowledge and technologies that OM Group had developed over the years with other companies in order to provide solutions for a vast array of technical situations.

OTHER ACTIVITIES

Mooney was a member of the board of trustees of The Cleveland Clinic Foundation. He led OM to become involved as an active corporate participant in the Responsible Care Program, an alliance formed within the chemical industry to promote working relationships with public-interest organizations, citizen groups, and state and local governments. Mooney was associated with the National Paint and Coatings Association; the National Federation of Paint, Technology, and Chemicals Management Council, as a past officer and chairman; and the Chemical Manufacturers' Association. He was also a member and director of the Cobalt Development Institute.

See also entry on OM Group, Inc. in International Directory of Company Histories.