Shakeup changes Allete leadership ... Russell explains his departure
Ed Russell stunned the community by his decision this week to resign as president and CEO of Allete. While business leaders were left wondering why the head of a billion-dollar company would walk away when he is credited with doubling the size of...
Ed Russell stunned the community by his decision this week to resign as president and CEO of Allete. While business leaders were left wondering why the head of a billion-dollar company would walk away when he is credited with doubling the size of the former Minnesota Power, Russell says it was time to turn over the helm as the company looks to set a new course.
Russell, who plans to stay in Duluth for the foreseeable future, said his challenge when he became president in 1995 was to grow the company. Today, the challenge is to raise the price of its stock.
"We are not happy with the current stock prices, and we have to reflect on what repositioning makes the most sense to unleash the true value of the company," he said.
In taking over as president, David G. Gartzke, said "Above all, I am committed to finding new ways to maximize shareholder value by closely evaluating the strategic value of the company's assets, including ways to reposition those assets."
Repositioning assets may mean selling off acquisitions Russell brought on board and changing strategies he put in place.
"I decided it was better someone else do that -- someone who was one step removed. David has the skills and knowledge to lead this reposition review," he said.
Russell, who was the first from outside the company to hold the position of president, said he is leaving after accomplishing the goal he was hired to achieve.
"I came in with the challenge to build the company," he said.
He did. The company nearly doubled in both revenues and expenses during Russell's tenure. In 1995, the company's revenues were $673 million. In 2000, they had grown to just over $1.3 billion. Net income has risen from about $65 million in 1995 to $118 million in 2000.
In addition, the company has diversified into four separate areas, energy, automotive services, water services and investments. In 2000, Russell oversaw the transition of changing the name of the company to Allete to reflect its diverse holdings.
"The company has made great strides with Ed, in terms of both growth and net income," said Arend Sandbulte, chairman of Allete's board of directors. "Ed has done a lot of good things for the company."
"It has been an excellent ride," Russell said.
Now it is time for new ventures.
"I plan to reintroduce myself to my family," Russell said, after returning from taking his daughter to her first day as a fifth-grader at Marshall School on Wednesday. His son is a senior at the school. "I am quite excited to be able to be a part of that. I have had six very hectic years, and I really want a chance to smell the roses and reflect on the important things in life."
He intends to do that while admiring a view of Lake Superior.
"I want to enjoy the community," he said. "When I came to Duluth, I just thought 'This is unbelievable.' Duluth is a community you can get your arms around, and I think this is a fabulous place."
While Russell's performance in the board room has been lauded, he was at the center of community controversies. He was embattled in a prolonged public debate over the resignation of Andrew Slade, former education director of the Great Lakes Aquarium, and he publicly withdrew his personal financial support of United Way of Greater Duluth after it withdrew its support of the Boy Scouts because of their exclusion of gays.
Neither of those issues played a role in his leaving Allete, he said, adding the decision to resign was his alone, and he was not pressured to do so by the board.
While he said he has other financial interests which he will be exploring, he declined to elaborate on what they were.
"But as you know, I don't stand still for long," he said.
Looking back on his career, he expressed pride in where he has taken the company.
"We are very pleased at what has just occurred in the region," he said, referring to Allete's recent announcements that it would build a power plant for the Blandin/UPM Paper Company in Grand Rapids and a natural gas-powered plant in Superior. He also said the company was pleased with the decision by the Wisconsin Public Service Commission to approve the 250-mile power line between Duluth and Wausau.
"A lot of people thought we were neglecting the power company by running around with used cars, but that couldn't be farther from the truth," he said.
He describes Allete as "rock solid" and considers its growth, diversification and talented staff his legacy.
"Look at where we were in 1995. We have undergone quite a transformation, and that was the job I came to do. We doubled the size of the company, we are stronger financially, and we did it in five to six years," he said. "I am fortunate that I have worked with such a great and talented group of people across the board. We have been able to move on new opportunities quickly and with success."