Three decades of wins and losses for Oregon business

Three decades of wins and losses for Oregon business

Gilding the lily

 

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From the September 1985 issue: George Heublein and his multinational flower company was profiled. By 1987, his company was bankrupt. Heublein was finally arrested in 1997.

Among the many Oregon companies that have vanished over three decades were Oregon Software, the Bank of Oregon, Air Oregon and Oregon Bulb Farms. Of these, the one that fared best in the 1980s was Oregon Bulb Farms, the Sandy-based inventor of the Asiatic hybrid lily.

It was owned by a business named Melridge and run by a charismatic CEO with a background in accounting named George Heublein. Heublein took Melridge public in 1983 after devising a system for licensing his lilies to royalty-paying Dutch growers. He hedged currency fluctuations by buying flowers on both sides of the Atlantic, in Seattle and in the Netherlands, and his strategy was an immediate hit. The company produced 11 million bulbs in 1984. Its stock tripled. Heublein graced the cover of Oregon Business in September 1985 with the headline “Flower Power.”

In 1986 the company made more than $25.6 million, bought four businesses and was lauded as one of the top stocks in the Northwest, along with Costco, Boeing and Precision Castparts. In 1987 Heublein met with the president of Burundi to establish a flower farm in sub-Saharan Africa, employing 50 Burundians. By this point Melridge’s stock had shot up from its original $5 a share to over $36. Heublein was a multimillionaire.

Then the whole thing fell apart. It turns out the former accountant had been gilding the proverbial lily, embellishing the numbers to encourage investments. By the end of 1987 Melridge was bankrupt and investors were suing the company and its auditors. The authorities came looking for Heublein but he was nowhere to be found. Looking back on the debacle, longtime Oregon Business editor Robert Hill wrote in 1992: “We have since instituted a corruption release clause which all cover subjects must sign. If they flee the country after being on our cover, they must take us with them.”

Heublein eluded capture until 1997, when he was arrested in Florida and sentenced to five years in federal prison. He and his partners paid $88 million to settle the various lawsuits from investors.

King of the car wash

 

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From the October 1987 issue: Dan Hanna, founder of Hanna Carwash International. Hanna Car Wash Systems are still sold on the Internet.

Dan Hanna used his mother’s mortgage to finance his first car wash in 1954 at the age of 19 and immediately set to work tinkering to make it better. His improvements paid off quickly. By 1967 he had bought his first Learjet, an investment he credited with growing his business by 500% the following year. That was just the beginning.

By 1987, Milwaukie-based Hanna Industries had 30,000 patented automatic car washes in 66 countries and annual sales of over $70 million. Hanna broke the world speed record in his Learjet, drove race cars for fun and signed his company on as the principal sponsor of Mario Andretti in the Indianapolis 500. He told Oregon Business that he still insisted on working regular shifts in his company’s car washes even as his business grew to dominate the market.

Unlike Heublein, it wasn’t fraud that did Hanna in. It was bad luck and unfortunate timing. In the late 1980s, as national environmental laws were tightening, he bought dozens of car wash franchises on former gas stations with leaking underground storage tanks. The liability proved overwhelming. The company went bankrupt in 1990, and creditors who were owed more than $40 million forced Hanna out of power.

He later bounced back to build a new business, Dan Hanna Products, but he was unable to regain control of the brand he had built with such flair. Hanna died in 2005, but his mechanical innovations live on in Hanna Car Wash Systems, marketed on the Internet as “the world’s leading manufacturer of car-wash equipment and systems,” a division of the Houston-based Jim Coleman Company.