In Conversation: United Company's James W. McGlothlin
/In this edition of the Thought Leadership project, I talk to James W. McGlothlin, the Chairman and CEO of the United Company. The United Company is a diversified business with interests in coal, golf courses, real estate developments, mine mill industrial support companies, pharmaceutical manufacturing businesses, electric furnace steel operations located throughout the U.S. as well as other interests in several miscellaneous companies. He gives his insight on leadership, advice to the entrepreneur, and, as a veteran of the coal industry, his ideas on the US energy policy.
About James W. McGlothlin, Esquire
James W. McGlothlin is the Chairman, President and CEO of The United Company. He is an alumnus of the College of William and Mary with a Bachelor of Arts Degree in 1962 and a Law Degree in 1964. He practiced law in the firm of Street, Street and McGlothlin in Grundy, Virginia for eight years.
Mr. McGlothlin acquired and became President of United Coal Company in March 1970, as a small coal contractor in surface mining, which has now evolved to The United Company.
In April 2009 Metinvest acquired The United Coal Company for approximately $1 billion.
Mr. McGlothlin and his wife Fran live in Bristol, Virginia and they have three children and six grandchildren. He is an exceptional entrepreneur and is now a patron of the arts.
The Conversation
This is a condensed version of Prof. Ram Ganeshan’s (RG) interview with James W. McGlothlin (JM).
RG: Tell me about your leadership style
JM: I think as a CEO there are a lot of hats you wear but one is to be a cheerleader for the rest of the company. You can never let your employees “fall on their own sword.” You have to be -- and you are -- the employee motivator.
You’re the one that figures out how to get everybody on board, how to get them bonded, and how to make them a part of a team.
We make decisions by everybody involved in that decision making process. Everybody has his or her opinion. Everybody gets to say what he or she thinks. But when we leave that room we know where we want to go. We are on the same team, committed to execute the decision.
I have always said, “Execution of a bad plan is better than poor execution of a good plan.” We will usually win even when we’ve made the wrong decision because we execute better than almost anybody.
RG: How has your leadership style changed over the years as you started buying more companies and diversifying?
JM: I don't micromanage anymore. I used to really be on top of every little detail but there is a limit to what you can do. As we got larger, I trusted more people and I changed the organizational structure of the business to have total subsidiaries and corporate entities.
A few times a year, the leaders from these subsidiaries meet and exchange ideas. Some of these meetings will be just the management teams. Others double as social gatherings with spouses – it works as a great morale builder.
RG: What advice would you give young entrepreneur today going out to start a company?
JM: I would not start a new company. I think it is just too hard in today’s environment. I would find a company that belongs to a group of people who no longer want to run it. It should have good volumes and revenues. I would try to find enough money to put some equity up, some bank financing and have that owner take some owner financing which would tell me he still does believe in his company.
RG: And the product…
JM: And the product. And that’s what I’ll be going after. And I would try to find the big enough revenue stream. If I went in and revamped this company, I would have enough income to go on and do lots of other things.
RG: Another big, hot button issue for the country as whole is energy policy. As somebody who has been in the coal business, what are your opinions on that?
JM: I think that’s a question that is difficult to answer.
Since I’ve been in the business for 40 years, about 54-58% of electricity comes from coal. And the question that I get asked often is if we can get that to decline with windmills and …
RG: and solar or …
JM: You cannot do it with wind mills and solar but you can do it nuclear and I am very, very much as an American for building nuclear plants and have nearly 100% of [electricity generation] either be nuclear or hydroelectric and do away with coal. I would rather see the coal turned into liquid fuel to run our airplanes, trains, and buses.
RG: So that could solve the problem of importing the oil?
JM: Exactly. So we would keep all the money here, all the labor would be here, all the money will stay in this country and we would be using no more coal than we do today.
RG: Is nuclear unsafe?
JM: No I do not think it’s unsafe.
Chernobyl was the only major disaster we have had. 3-mile island is the closest call we have had in this country. I think if we can put all the bells and whistles for safety on it, and if we operate it right, nuclear power is environmentally friendly and the cheapest electricity we can have.
RG: So that will be your solution to our long-term energy issues?
JM: If you did not burn coal in electric utility -- which is about 90% of all the coal—you use that to make liquid fuel, which would be jet fuel, gasoline, and diesel fuel. We would have less impact on the environment because you would be having none from the crude oil we are importing. You would just have it from this coal and there would be none in electric utility. It would be such a magnificent swap.
RG: What do you do for your free time?
JM: I think as the CEO of the company, I don’t wear myself out with details and I don’t get involved in things I don’t want to do. And I make quick, quick decisions.
I’m 69 too so I play golf. I own a golf club (RG's note: Olde Farm golf club) where my house is located and 300 of my best friends in the world belong there from all over the world. It has many sports personalities as members – like Peyton & Eli Manning and Dan Marino. So it’s very interesting to go to.
RG: What is your favorite golf course in the world?
JM: Other than that, I’m a member of R&A of St. Andrews, I guess that is. I like that a lot. So I go there a couple of times a year.
RG: One final question, you and your wife are also art collectors?
JM: Yes, we collect American art. We started with the Hudson River school and we have now moved to early impressionism about 8 or 10 years ago. We have a fine collection of about 150 paintings. And we have given it all to Virginia Museum of Fine Arts when we die. It will all be on exhibition starting next May in the new wing in Richmond, VA (RG's note: Grand Opening of the James W. and Frances G. McGlothlin Wing is set for May 1, 2010).
About the United Company
The United Company is a diversified conglomerate based in Bristol, VA. The Company has interests in coal in the central Appalachia area of the United States, principally in West Virginia, Virginia, Kentucky and Ohio and interests in exploration and production of oil and gas in the southwestern part of the U.S., principally in Texas and in the western most Provinces of Canada. The Company owns or has owned golf courses, real estate developments, mine mill industrial support companies, pharmaceutical manufacturing businesses, and electric furnace steel operations located throughout the U.S. as well as other interests in several miscellaneous companies.
In April 2009 Metinvest acquired The United Coal Company for approximately $1 billion.