Robert Schad is seen on the manufacturing floor at Athena Automation Ltd. on May 16, 2016.Fred Lum/The Globe and Mail
At 87 and fresh off a legal battle as gruelling as they come, Robert Schad is eager to get back to work.
For three years, the industrialist has been embroiled in a furious – and personal – legal battle against the business he founded in 1953, took public in 1998 and sold in 2007.
Now run by John Galt, Mr. Schad's former son-in-law, protégé and hand-picked successor, Husky Injection Molding Systems Ltd. sued Mr. Schad in 2013 for allegedly misusing confidential information at Athena Automation Ltd. – the upstart he founded in 2008. Athena, which was also named in the lawsuit, filed a countersuit against Husky.
In late April, a judge dismissed the claims and counterclaims, ruling for the most part in Athena's favour in the dispute over the designs of injection molding machines, which turn tiny resin pellets into plastic products such as bottles and caps. Husky is appealing the decision.
Now, Mr. Schad – who is fit and sharp but has trouble hearing – says he's focused on Athena's future.
"When you get older, you have so many miles left," Mr. Schad said during a recent interview at Athena's offices in Woodbridge, Ont. "You have to maximize them."
Mr. Schad knows something about maximizing time.
Over more than half a century, he helped build Bolton, Ont.-based Husky into an industry giant. He became known for his long-term vision, fighting against pressures from analysts, shareholders and private equity owners to pursue short-term financial gains.
Current and former employees say that his approach has long been to do what he thought was right by his customers, demanding the highest level of excellence, precision and service from his workers. During Mr. Schad's tenure, employees joked that Husky stood for: "Here Until Stress Kills You."
That approach paid off. In 2007, the company was acquired by Onex Corp. for $960-million, of which Mr. Schad took home a $400-million windfall. Less than four years later, after efforts to cut costs and maximize revenue, the company was sold again to OMERS Private Equity Inc. and Berkshire Partners LLC for $2.1-billion. Today, it employs 4,000 people in 100 countries.
Replicating that kind of success at Athena hasn't been easy. With Mr. Schad approaching 90, there are obvious questions about succession. Sales have been few and far between. And the costs of starting a new business, with Mr. Schad insisting on top-of-the-line, environment-friendly equipment, have been high. Court filings show that Mr. Schad has poured at least $100-million into the company. But the biggest hurdle – hampering both sales and employee morale – has been the dispute with Husky, which has festered since 2011, months after Mr. Schad's non-compete clause expired.
By the time the lawsuit made its way to trial in Toronto last November, Mr. Schad says he was at his wit's end. Crippled by the doubt that comes with high-stakes litigation, Athena had barely got off the ground.
"I was irritable, I was cranky and now, it's different," Mr. Schad said. "I'm over it. It's finished. It's in the past. Now, I have to put all my effort into building this."
Since 2013, Athena has sold just 35 of its injection molding machines at an average price of $500,000 (U.S.), capturing the tiniest slice of a maturing market that sells roughly 85,000 units around the world each year. According to court documents, Athena estimates that Husky's lawsuit cost it $5-million in lost profit from 2013 to 2015. In all, the company is claiming damages of up to $50-million.
"Everybody [in the industry] knew about the lawsuit. Everybody brought it up when we visited them. Everybody had questions," said Jim Overbeeke, vice-president of sales at Athena, who had spent nearly 20 years at Husky. "We were shut down in pretty much every case."
On April 22, Justice Frank Newbould of the Ontario Superior Court found that Mr. Schad did breach the confidentiality agreement he had in place with Husky, but concluded that Athena didn't make any material use of the information in developing its own technology.
"I cannot conclude that Husky has suffered any material detriment enabling it to a reward of damages," Justice Newbould wrote in his 127-page decision. "Had Athena made use of the technological information it had obtained … then it would have been a different matter."
Last Friday, Husky appealed the decision.
"Today, relative to any other time in our history, we have an unprecedented level of innovation effectiveness through our investments in research and development," Husky said last week in an e-mailed statement attributed to Mr. Galt. "Our intention in bringing these claims to court was to protect Husky's confidential and proprietary information, and to ensure that any rewards and customer value that result from our inventions stay within the Husky team."
Mr. Schad, who knew an appeal was possible, celebrated the court victory anyway. In early May, he hosted a lunch party for his employees.
"You could see the morale," he said. "They were so happy." He believes that the sales pitch for his injection molding machines has gotten a lot stronger overnight. "We were afraid of having restrictions and we were waiting," he added. "We have no restrictions any more."
Still, questions remain about who will lead and own the company in the years to come. Mr. Schad says he is "looking to bring on an experienced CEO soon," either by promoting from within or hiring an external candidate. He says that he's establishing a structure that will "ensure Athena continues to operate as a family-controlled firm for the long term," he explained. "That is my wish."
Nevertheless, Mr. Schad says he's built "the best team he's ever had" at Athena, mixing industry veterans with a crop of recent graduates who he hopes will continue to build the company in the years ahead.
"There's no ride like the one you get with Robert. He's an awful lot of fun to be around," Mr. Overbeeke said. "He's created more than machines. He's created a culture, and there's no place I'd rather be."