Leadership Q&A: A Long Heritage and a Global Reach

Coatings and chemicals manufacturer PPG Industries is a company with a history that goes back more than 120 years. It's a dynamic player in world markets, with operations in Australia, Europe, Latin America and Asia. Business Finance editor John Cummings talked with William H. Hernandez, senior vice president of finance and CFO, about the challenges and rewards of guiding the finance operations of a highly diverse organization.

John Cummings: Every industry poses unique challenges for finance leaders. What are they in yours?

William H. Hernandez: The challenges have to do with the fact that we're a large, established manufacturing company -- almost like a conglomerate, with the number of operations we have -- with a very long heritage. We have to contend with some different issues. One is pensions and benefits. When you're an older company you're dealing with defined-benefit plans and other kinds of benefits that you need to be competitive for a certain segment of your business. And you're also dealing with very different kinds of defined-contribution plans that you need for your younger workforce. You have to appeal to a much broader array of workers and ages and years of experience.

What's happening in these areas, too, is there's an evolving complexity of financial reporting and governmental requirements -- reference the most recent passage of the Pension Protection Act -- that you have to deal with.

Another factor is that, as a company that's over 120 years old, and even though we're very well-managed, legacy issues occur from time to time. We just took a charge in the third quarter that really emanated from a business that we operated about 50 years ago and haven't operated since that time. These are things you have to keep track of and make sure that they're being well-handled and properly disclosed to your investors.

We're a global company, so there's a plethora of global issues as we and our major customers and suppliers continue to expand worldwide. And we're in so many different businesses -- some that are growing fast, some that are growing slow, and some that are declining -- and each one takes a very different approach and metrics, both financial and management.