Chairman, president, and chief executive officer, Crown Holdings, Incorporated
Education: University of Virginia, BA; Columbia Law School, JD.
Career: Continental Can International, served in various positions and then as president; Crown Cork & Seal (established as Crown Holdings in 2003), various management positions leading to president and COO, 1991–2001, then president, chief executive officer, and chairman, 2001–.
Address: Crown Holdings, Incorporated, 1 Crown Way, Philadelphia, Pennsylvania 19154-4599; http://www.crowncork.com.
■ John W. Conway became the CEO of Crown Cork & Seal in early 2001. The company was later established as Crown Holdings in 2003. In 2001, however, he faced a series of challenges in placing the century-old bottling and packaging company on a stronger financial basis. In addition to dealing with a recession coupled with rising prices for raw materials, energy, and transportation, Crown had to contend with the possibility of bankruptcy due to asbestos-related court claims. Conway's approach to strengthening the company's financial foundation combined aggressive cost cutting and conservative expansion.
Conway graduated from the University of Virginia and then earned a law degree from Columbia Law School. He went on to hold a series of management positions both in the United States and abroad with the Continental Can International Corporation, a metal can manufacturing company, before he became Continental's president. Crown Cork & Seal Company acquired Continental Can in 1991.
Conway joined Crown's board of directors in 1997 and became the company's president and chief operating officer the following year. He assumed the position of CEO in January 2001 after the retirement of his predecessor, William J. Avery. A press release reprinted by PR Newswire quoted Avery as saying, "With John Conway's experience and his leadership abilities so clearly demonstrated, I think this is the time for me to step aside and let John and his management team guide this great company" (November 14, 2000). A few months later, Conway also succeeded Avery as chairman of the board.
Conway took charge of Crown just as an economic slowdown began to affect the company. Ranked among the two hundred largest companies headquartered in the United States, Crown was the leading supplier of packaging products to consumer marketing companies around the world. In spite of the company's market share, however, its stock performance deteriorated as its packaging business slumped.
Conway decided to use a conservative financial strategy while improving the company's balance sheet. His strategic plan included a heavy emphasis on cost structure and positioning Crown as a low-cost producer. Conway's cost-cutting measures included the closing of 10 plants in North America and Europe and the reduction of Crown's salaried work force. He also realigned the production capacity of Crown's plant in Weston, Ontario. The Canadian plant converted two of its existing four aluminum beverage can lines to the manufacture of two-piece steel food cans, thus substantially reducing its beverage can capacity. PR Newswire quoted Conway as saying, "Converting underutilized manufacturing capacity … will help capture sales for our Food Can Division and at the same time trim capacity in the beverage can industry" (February 27, 2001).
In addition to a slow economy, the major challenge facing Conway and Crown was the threat of asbestos-related litigation. The lawsuits were related to Crown's 1963 purchase of a company called Mundet, which had produced cork bottle caps in addition to insulation that contained asbestos. Crown was interested only in Mundet's bottle division and sold off its insulation business 93 days after it had purchased Mundet.
Nevertheless, Crown eventually paid dearly for its brief period of ownership, paying out millions of dollars by mid-2001 to settle some 70,000 asbestos-related claims. As industry analysts observed, other large companies involved in these cases such as Owens Corning and Armstrong Holdings were forced to declare bankruptcy, causing a ripple effect that left the remaining companies like Crown facing an increased share of liability payments.
Settling the legal claims eventually put Crown on the verge of bankruptcy. Conway had the company suspend its quarterly dividend in order to set aside money for payouts. The combination of legal claims and packaging business problems led to the company's stock falling over the course of a year from $36 per share to $4 per share by April 2001. The legal difficulties were mitigated in December 2001, when the governor of Pennsylvania signed a law limiting the asbestos-related liabilities of Crown and other Pennsylvania-based companies. Conway thought that the General Assembly and the governor had made the right decision, saying, "Crown does not discount the problem of serious asbestos-related disease, but rather sees the new legislation as a demonstration of fundamental fairness in allocating liability" (PR Newswire, December 17, 2001).
While dealing with the asbestos crisis, Conway sought out new markets for Crown as part of his strategy for maintaining the company's global presence. He oversaw the opening of the first beverage can production facility in Seville, Spain, as part of Crown's efforts to meet steadily increasing market demand in Europe. Conway also signed a long-term agreement to supply Nestlé Russia with cans for Nescafé products. In an interview with a reporter from Beverage Industry , Conway remarked, "Crown is committed to supporting customers throughout Europe" (October 2002).
By the end of 2002, Conway was able to report that the company was on track with its 24-to-30-month plan for achieving profitability. Crown's operating income in 2002 had increased 53 percent to $481 million. Its net income from continuing operations was $0.49 per share compared to a $0.74 per share in 2001. Conway had also increased the company's free cash flow to $300 million from $142 million.
Conway continued to focus on reducing Crown's costs while improving the productivity of its operations and taking a careful and conservative approach to investing. He also remained committed to debt reduction. Crown reported losses of 33 cents a share for the fourth quarter of 2003, which was an improvement from the $1.71-per-share loss it had reported in the fourth quarter of 2002. Another good sign was that net sales for the quarter were $1.59 billion, up 3 percent from a year earlier. Nevertheless, net sales for the year were down to $6.63 billion, 2.4 percent lower than the previous year's sales.
Although industry analysts remarked that Conway had taken some positive steps to putting the company back on track, they also observed that Crown was not yet out of the woods. The Pennsylvania Supreme Court struck down the state's asbestos reform law in March 2004, which meant that Crown was once again faced with paying out higher legal claims at the state level and the federal level.
In addition to Conway's duties at Crown Holdings, he also served as a director of West Pharmaceutical Services and PPL Corporation.
See also entry on Continental Can Co., Inc. in International Directory of Company Histories .
"An Affair to Remember," Forbes , June 11, 2001, p. 54.
"Crown Cork & Seal Comments on New Pennsylvania Asbestos Law," PR Newswire, December 17, 2001, http://stg.syndnet.thomsonfn.com/InvestorRelations/PubNewsStory.aspx?partner=10390&storyId=107838 .
"Crown Cork & Seal Major Capacity Change at Facility," PR Newswire, February 27, 2001, http://stg.syndnet.thomsonfn.com/InvestorRelations/PubNewsStory.aspx?partner=10390&storyId=64338 .
Greenberg, Allen, "Asbestos Drills Crown Cork, Philadelphia Business Journal , August 10, 2001, p. 51.
McLeod, Douglas, "Pennsylvania Keeps Door Open on Asbestos Successor Liability," Business Insurance , March 1, 2004, p. 3.
"Supplier Profile," Beverage Industry , October 2002, p. 89.
"William J. Avery to Retire as CEO of Crown Cork & Seal; John W. Conway, President and COO to Succeed Him," PR Newswire, November 14, 2000, cached as http://126.96.36.199/search?q=cache:tUfFJ1dh5fwJ: www.findarticles.com/cf_0/PI/search.jhtml%3Fnav%3Dadv%26key%3D%2522Bill%2BAvery%2522%26magR%3D+%22William+J.+Avery+to+Retire%22&hl=en&ie=UTF-8 .