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Three questions
By SCOTT BARANCIK, Times Staff Writer
Q. For more than 50 years, the game plan at Walter Industries was the same: Find a rural landowner, loan him money for a house and build it. All of a sudden the company is building subdivisions, refinancing loans and buying mortgages as an investment. What happened? The company operated in the mode of, "If it wasn't broken, don't fix it." When (chief executive) Don DeFosset came on board and got together with me and a couple of other folks and really looked at the business model, our feeling, frankly, was that it was quite broken. The homebuilding group was not making money, the number of homes that we were building each year was on the decline, and eventually it would lead into the financing end. The difficult part was, how do we break the homebuilding group out of its narrow box? How do we move beyond our traditional offerings, and do it in such a way that is profitable? One of the first things we had to do was start a new finance company. Q. Prior to joining Walter you represented one of its lenders, NationsBank. Did that give you the extra credibility you needed to push for change? Having a financial services background, I think, was meaningful to Don when he asked me to oversee the (financial services) operation and then become its president. I certainly spoke the language of lending and understood the key components to success in a financial institution. Q. Will financing always play second fiddle to homebuilding as a profit center at Walter? Financing, if you look at our numbers, plays second fiddle to none. It's the largest profit center we have. Having said that, it is intricately linked to homebuilding. We grew over 200 units last year, which is something we haven't done in quite a while.
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From the Times Business report
From the AP
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