Beck to the Rescue

All was not well last week at the Fruehauf Trailer Co. of Detroit, the biggest U.S. manufacturer of truck-trailers (1953 sales: some $200 million). President Roy Fruehauf, 45, and his brother Harvey, 60, the company's founder and board chairman (at an estimated $150,000 a year) had had a falling out and were battling for control of the company.

The trouble began when Harvey moved to Florida, got into the oil business and dropped out of active participation in Fruehauf Trailer. Roy demanded that his brother come back and spend more time with the company. Harvey refused. Roy forced him out of the chairmanship, but let him keep the title of honorary chairman.

Unappeased by this sop, Harvey looked around for somebody who could help him fight back at brother Roy. The man he found was George J. Kolowich, head of the Detroit & Cleveland Navigation Co., a banker who went to jail in 1933 for embezzlement, but who has since made a fortune in real estate and trucking. Last July Kolowich bought Harvey's 9% stock interest in Fruehauf, went to work to unseat Roy as president of the company.

Since he owns only 2% of the stock himself, Roy Fruehauf looked for allies, but could not quite line up a majority of the stock. In the pinch, he turned to Seattle's Dave Beck, pink-faced boss of the A.F.L. International Brotherhood of Teamsters. Beck agreed to help, bought 37,500 shares of Fruehauf stock in the open market for about $950,000. But all voting rights and dividends were turned over to the Roy Fruehauf Foundation, Inc., which was incorporated in 1950 as a tax-free foundation to breed lead dogs for the blind. In effect, says Beck, this amounts to a loan to the foundation, and the teamsters' union is holding the stock as collateral.

Nobody will say how much more stock Beck will buy, but the investment is eventually expected to run upwards of $1,200,000. Both the foundation and Roy Fruehauf personally guaranteed the teamsters 4% for their money. Explained "Banker" Beck: "We've got more than $29 million in the union kitty, and we're going to put it where it will provide the best return to serve the cause of responsible trade unionism ..." The Fruehauf deal, Beck believes, com bines good investment sense with good unionism. He likes the way Roy Fruehauf has fought for uniform truck and trailer size and weight regulations. Besides, the union is getting 4% for its money instead of the 2 1/4% it got when the money was in Government bonds.

By last week Roy Fruehauf was con fident that with Beck's help he had 55% of the 1,459,614 outstanding shares of stock on his side, felt assured of victory at the stockholders' meeting in May.

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