Gerald A. Strobel, the Ecology & Environment co-founder who took over as the Lancaster environmental services firm’s CEO in the summer of 2013 in a management shake-up, has retired as the company’s top executive.
Gerard A. Gallagher III, E&E’s president, was named as Strobel’s successor as CEO.
Strobel said his appointment in August 2013 as E&E’s CEO was intended to be a transitional appointment as three of the company’s four co-founders reasserted control over the business they started more than 40 years earlier. “After much thought, I am convinced that now is the time for me,” Strobel said in a letter to the company’s board of directors.
Strobel, who will continue to serve on E&E’s board of directors, oversaw a major overhaul of E&E following the ouster of Kevin S. Neumaier, son of co-founder Gerhard J. Neumaier, as the company’s top executive.
Under Strobel, E&E slashed its workforce by more than 25 percent, revamped its management in a painful shake-up among the founding partners, and pulled out of markets in developing countries where its customers often didn’t pay their bills. E&E, which has about 200 employees at its Lancaster office and nearly 1,000 worldwide, has been revamping its business after it was battered by failed excursions into the Chinese markets and a bloated cost structure, leading to losses during each of the past two fiscal years as its sales dropped by 24 percent over a three-year period.
The restructuring has showed signs of paying off. E&E’s profits more than doubled during its first quarter. The profit was E&E’s first in three quarters as the savings from the company’s cost reduction efforts outpaced a 4 percent decline in its revenues.
Gallagher, a 34-year E&E veteran who was named a senior vice president in 2008 after spending most of his career in the company’s regional operations in the United States and abroad, took over as E&E’s president in January 2014.
E&E was founded more than 40 years ago by Frank B. Silvestro, 78, and three partners, including Strobel, 74. Despite the improvement during the first quarter, Silvestro, E&E’s chairman, told the company’s shareholders in January that he believes that E&E remains at a crossroads, needing to be about twice as big as it currently is, with somewhere around $250 million to $300 million in annual sales.
One option for E&E is to grow by making acquisitions, either small add-on deals to move into new markets, or larger transactions, maybe in the $50 million range, that would quickly bulk up E&E’s revenue base, Silvestro told shareholders. The company also was approached last year about being acquired by two European companies and two U.S. firms, though none of the contacts led to a deal.