Donaldson Co. Names New CEO

Donaldson Co. directors appointed Tod Carpenter to be chief executive and president starting April 1, the company announced Friday.

Carpenter, currently Donaldson’s chief operating officer, succeeds Bill Cook, who has led the maker of engine filters and mufflers since 2005. Cook, 61, will stay on as chairman of the board. Carpenter, 55, joined the company in 1996.

“I am especially grateful for the trust Bill and our board of directors is placing in me to assume this position,” Carpenter said. “I am honored to have this opportunity to lead our incredibly talented global team,” he added, referring to the firm’s 12,700 employees.

Carpenter held several management positions at Donaldson, including general manager of gas turbine systems and vice president of industrial filtration. In 2011, he was promoted from vice president of Europe and the Middle East to senior vice president of engine products. In February 2014, he was promoted to chief operating officer and joined the board of directors, an appointment that made it clear to some employees that Carpenter was Cook’s heir apparent.

“With Bill staying on as chairman, and the fact that Tod had already been elevated and was at the table in terms of the board, (these were) all strong signs that this is just kind of a traditional succession process, instead of some fire-drill exercise,” said Matt Arnold, an analyst at Edward Jones.

Under Cook, Donaldson’s annual revenue rose to $2.5 billion from $1.6 billion in 2005. Earnings rose to $260 million from $110 million in 2005. Cook said Carpenter is the right person to take the company to the next level.

“Tod has demonstrated a passion for our business, a strong customer orientation and a keen focus on delivering financial results,” Cook said.

Carpenter takes the helm at a time when Donaldson is adjusting to slumping demand in the U.S. for agricultural equipment, for which it supplies parts, and weakness in Asia’s construction and mining sectors.

Donaldson officials said agricultural-equipment sales could plunge 25 to 35 percent this year because U.S. and European farmers are grappling with low crop prices and might decide to dial back future orders for the tractors and other machines for which Donaldson makes filters. Company officials now expect sales growth for the year of just 1.5 percent.

Donaldson’s stock has been trading recently around $37 a share, near its 52-week low.

Arnold at Edward Jones said that Donaldson’s pinched growth “is not their fault. It’s more that the end (customer) markers are not growing as much as when there is an up cycle. This is a business cycle when there are a lot of end markets that are shaky and uneven and temporarily weighing on (Donaldson’s) results.”

Donaldson is spending $90 million to $100 million in fiscal 2015 on key plant, distribution and equipment upgrades. It is building a plant in Poland; opening distribution centers in Peru and Slovakia; investing in new products and technologies; and adding staff in developing countries. “So they are not making missteps,” Arnold said. “They are navigating challenges.”

Carpenter grew up in Gary, Ind., graduated with a manufacturing technology degree from Indiana State University and later earned a masters in business administration from Long Beach State University in California. Before joining Donaldson, Carpenter worked at Hughes Aircraft Co. and York & Associates.

This article appeared in print in the February 2nd, 2015 edition of Hamodia.