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August 2000

Luiz F. Kahl
Success on Many Fronts

by Joseph RADDER

Tenacious is a good word to describe Luiz F. Kahl. He doesn’t let go of a problem until it has been solved.
“I guess I was born stubborn,” he says. “I remember a time when I was 3, maybe 4 years old. My parents had bought a sailor suit for me. I hated it, and I refused to wear it. My father seldom got angry, but this time he ‘lost it’. ‘Wear it!’ he shouted. Needless to say I did.”

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Luiz at age 1. Luiz Kahl at age 3 in his sailor suit.

That incident, however, was not typical of Luiz Kahl’s childhood in Brazil. He was born in Rio de Janeiro, the nation’s capital, home of the President’s Palace, Brazil’s major Atlantic seaport and vibrant center of South American culture. Kahl was indeed a beneficiary of his environment. His childhood was a happy one. Most of the time was spent on the beaches of Rio where he enjoyed swimming, sailing and water skiing. Summers were spent in their summer home in Petropolis, a historic city in the hills outside of Rio. Past times were horseback riding and roller skating. In later years, he brought his love of sailing with him to the United States, where he named his boat “Business”. That enabled his secretary to say he was “out on Business” and still be telling the truth.

Luiz remembers his kindergarten teacher fondly. “She was a French lady who established one of the first kindergartens in Brazil.” Kahl spent 5 years of elementary school in Brazil.His first three years of junior high school were also in Brazil, but the balance of his education was in the U.S.

“I was determined to get a good education,” Kahl told us, “and so I applied to one of the best schools in Rio, a military high school run by the Army. There were over 3,000 applicants that year for only 500 openings. I was one of the lucky 500, however, and spent three happy years there.”

Before Luiz was able to complete high school, his father was transferred to Washington, D.C. as the Air Attaché to the Brazilian Embassy.

Even though Luiz had studied English for several years in Brazil and had a strong grammar background, he found it next to impossible to communicate with his new American high school teachers and fellow students. “It was like a bad dream,” Kahl remembers. Concurrently his parents recognized the problem and hired a tutor for him. Within a matter of months he had picked up the vernacular.

Young Luiz was very close to his father, who saw the need to compensate for the isolation his family was feeling in a strange country. Therefore the family did a lot of things together—trips to Annapolis, Niagara Falls, Atlantic City and Canada, for example.

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Luiz (third from left) with very close cousins Vera, Manuel and Helen. Luiz Kahl, 15 years old, in Washington, D.C.
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Luiz Kahl at age 13 with his mother Nicia Kahl in Rio.

After finishing high school in the U.S., Luiz wanted to go to M.I.T. for an engineering degree. However this was not possible because the family was about to return to Brazil. His father’s assignment in Washington had been completed and he was getting ready to return to his work as an Air Force Officer in Brazil.

Luiz went to the Polythecnic School of the Catholic University in Rio de Janeiro and earned a BS in Mechanical Engineering. His taste of North American life, experienced a few years earlier, prompted him to return to the States for his Master’s Degree at the University of Houston.

Meanwhile he had met and courted Sonia. They were married in Rio during a summer break in the Master program.
Their first son was born in Houston and after graduation Luiz landed a job with The Carborundum Company, the only company he would work for over the next 36 years. That summer of 1961, Carborundum sent Luiz to Niagara Falls for training. And so, he took his wife and two-month-old baby to the Falls where they spent three very hot summer months. “It was hot as hell,” Kahl said. “Right then and there we decided we’d never go back to Western New York to live.”
As luck would have it, Carborundum sent him back to Sao Paulo Brazil to be an Assistant Technical Manager. Unlike Rio, a center of culture, Sao Paulo was an industrial city, the first of several in Luiz Kahl’s future.

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Sonia and Luiz celebrate their engagement in 1959.
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The Kahl family in Rio, 1970. Sonia and Luiz Kahl in New Jersey with their children Luiz Eduardo, Cristiana and Guilherme, their daughter-in-law Janet and grandson Justin.

Again Lady Luck smiled on Luiz Kahl. His boss at Carborundum, an American, decided to retire after Luiz had been on the job just 8 months. “I was at the right place at the right time,” he says. At age 25 he was appointed Technical Manager and four years later he was elevated to vice president.

Five years later in 1972, Luiz Kahl became one of the youngest company presidents in Brazil. This had special significance since American companies with South American subsidiaries were normally headed by Americans. At age 35 Kahl became the first native Brazilian to be put in charge of a major subsidiary of an American company in Brazil.
By 1976 Argentina was added to his area of responsibility. And in 1978 Kahl’s sphere of influence grew to include Venezuela and Colombia. “I had the courage of youthful ignorance,” Kahl says. “I knew everything. I knew a lot more than I know now!”
For the next three years Luiz Kahl continued to zoom Carborundum’s corporate ladder. In 1978 he was made vice president of the corporation in the U.S., continuing to run the South American operations. In 1979 he was elected Group Vice President of the U.S. Corporation, and given responsibility for the Mexican and South African operations of The Carborundum Company. He was very happy in this role and hoped that Kennecott’s recent acquisition of Carborundum wouldn’t affect his position in the company.

He made regular trips to the home office in Niagara Falls to discuss the company’s international problems and opportunities. Kennecott chairman Tom Barrow knew this and one day in 1980 he called Luiz in Sao Paulo and asked him to stop at Kennecott’s Stamford Connecticut headquarters on his next trip to the Falls.

One can only imagine what was going through Luiz’ mind between that phone call and the minute when he sat down across the desk from Barrow. “Ice was going up and down my spine,” Kahl remembers.

His fears were soon realized when Barrow offered him a promotion to a staff job in the U.S. Kahl had always had line positions and knew he wasn’t cut out for a staff job. “Would it be a black mark against me if I turned down this offer?,” Kahl asked.

“No, but would you be willing to move to the States if the right job became available?,” Barrow asked.
Kahl answered in the affirmative, telling his boss that a senior position in international operations would be something he would like to do.

In December 1980 Barrow called Luiz to Stamford again to tell him the international job was his. In this meeting Barrow revealed that Luiz would be elected Senior Vice President for International Operations, and since the Carborundum CEO was approaching retirement, Luiz Kahl was his candidate to take the company helm.

By December 21 the move to the U.S. was a done deal. The new Senior VP International job assignment was to be effective January 1, 1981.

Mrs. Kahl remembers it well and often tells the story of how Luiz returned to the Falls by January3. She came on with their children a week later and took on the task of looking for a house. Luiz, a workaholic in Mrs. Kahl’s opinion, said he couldn’t take the time to go house hunting and agreed to buy any house Mrs. Kahl selected. As it turned out, her choice of a house in Williamsville suited them both just fine and in April 1981 they moved in.

By late 1981 Kahl had been selected president of Carborundum Abrasives worldwide. This was an impossible job since most of Carborundum profits of the last several years had been spent on the acquisition of several other businesses, on a very aggressive diversification strategy, making Carborundum a small conglomerate, typical of corporations at the time. The Carborundum basic business at the time was really suffering for lack of adequate plant modernization and technology development in their research and development activity. Aggravating the situation was the fact that the abrasives industry in the U.S. was shrinking due to the introduction of new materials like plastics and composites replacing steel components. The Carborundum abrasives business was going through a severe financial hemorrhage and extremely tough decisions would have to be made in the very near future.

By this time, Carborundum’s parent company, Kennecott, had merged with Standard Oil of Ohio (Sohio). Barrow was now Vice chairman of Sohio, a commanding figure, 6’6” tall and weighing about 280 pounds. “Yet, I had to stand up to him and tell him we had no choice but to shut down the Niagara Falls grinding wheel plant and sell off the other U.S. and international abrasives operations.”

“March 16, 1983 was the worst day of my life,” Kahl remembers. That was the day he announced the shutdown of the plant to 2,000 people who would lose their jobs as a result. This was even more difficult because there were no other jobs available to these people. The Niagara Falls area was going through a period of about 20% unemployment in the wake of Bethlehem Steel’s major plant closing. Being part of a major corporation enabled Kahl to pull together a reasonable severance package for the hundreds of Carborundum employees that lost their jobs, attenuating the impact caused in the Falls area.

He spent 1984 putting the rest of the company back together and in the subsequent years focusing the company on being a high technology ceramic company, producing structural and electronic ceramic products. He continued on as President and Chief Executive until 1996. In 1990 Luiz was also elected Chief Executive of British Petroleum Advanced Material companies with several operations on the West Coast and one major facility in the U.K. In 1987 British Petroleum had acquired the minority shareholders of Sohio and the group of companies (Sohio, Kennecott, Carborundum) became subsidiaries of British Petroleum. One is reminded of the cartoon of the big fish (BP) swallowing the smaller fish (Sohio), swallowing the smaller fish (Kennecott) swallowing the smallest fish (Carborundum)... smallest fish, yes, but indeed a huge world-wide company.

In 1992, British Petroleum decided to divest itself of all businesses not related to the petroleum industry. This strategic decision led BP to divest its mineral businesses (Kennecott and other mining companies), its nutrition, coal and industrial businesses.

By 1994 Carborundum was the only non-oil company left and it soon became eminently clear that BP would sell Carborundum. Luiz then scurried about to put a group together to attempt a management buy-out. They had only two weeks to raise $400 million. Amazingly, they did it, but the two-week deadline, which BP refused to relax, didn’t allow enough time to satisfy all the environmental and legal requirements covering all international operations, and the management buy-out could not be completed. In 1995 BP closed the sale of Carborundum and Luiz decided to leave the group when the acquisition was finalized. In February 1996 Luiz F. Kahl was out of a job for the first time in his life.

When we asked, “What did you do then?” he was quick to answer...
“I took the afternoon off, but then immediately went to work planning the rest of my career. I soon decided to devote a great part of my life to service. I wanted to give something back to the community.”

It wasn’t long before the community became aware of Kahl’s desire to serve and he was elected to several boards, adding to others such as the board of Children’s Hospital that he belonged to. He soon became vice chairman. He also became a trustee of the U.B. Foundation, a member of the board and executive committee of the Greater Buffalo-Niagara Partnership, and in 1996 Governor Pataki appointed him as a commissioner of the NFTA. In 1998 he was elected chairman. As such he automatically became a member of the Peace Bridge Authority Board.

Meanwhile Luiz Kahl and his sons had set up an investment group called the Vector Group LLC. With offices on Sheridan Drive in Williamsville, Vector is primarily an estate-planning tool for the Kahl family. It does, however, invest in other businesses. For example, Vector is one of the owners of Dinaire, a manufacturer of casual dining room furniture.
The NFTA, of course, occupies a great deal of Kahl’s time. When asked about the NFTA’s recent accomplishments he cites the new airport, an airline passenger increase from a low 2.7 million passengers annually to 3.6 million in 1999, “The best since the Peoples Express years.” There has also been a 3.3% increase in Metro Bus and Rail ridership, quite remarkable after years of declining use of public transit.

“How did you accomplish all of this?,” we asked.

“I wanted to make the NFTA a people-oriented organization. Previously, NFTA people had little pride in their work. They resisted innovation and there were frequent management-union problems. I went in with the philosophy which had worked so well for me all those years at Carborundum...people are a company’s most valuable asset. The NFTA staff soon learned that somebody cared and would listen. Pride returned, and, generally speaking, NFTA workers are now a happier and more professional team.

Over the years Luiz F. Kahl has received numerous major awards including high honors from Canisius College and the University of Buffalo. Recently he was named one of the Citizens of the Year by the Buffalo News.
The energy and dedication that have always been Luiz Kahl’s signature qualities continue in his present multi-faceted life. This was evident even on the day of his recent heart attack...
“I had been under a lot of pressure, working my head off with Brian Lipke on the Peace Bridge expansion project,” he told us. All of a sudden he found himself in the Intensive Care Unit at Sisters Hospital. He had been scheduled to meet Mayor Masiello for a press conference concerning the Peace Bridge and he never made it. It’s unheard of to make phone calls from the ICU, but Luiz Kahl did it. “I just had to phone Tony (Mayor Masiello) and let him know I couldn’t make it.”
Looking and feeling fit today, Luiz Kahl seems ready for any people-oriented project that comes his way. Like Elbert Hubbard, his philosophy has been and will continue to be; “Develop good people and the rest will follow.”     


Joseph Radder is a freelance writer.

 

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