Confusion reigns as Braidy Industries CEO disputes company’s claim that he stepped down
The story of Braidy Industries and its plans to build a $1.7 billion aluminum mill in northeastern Kentucky has always been complicated. On Friday, it turned bizarre.
The controversial company, partially funded by Kentucky taxpayers and a Russian aluminum company previously blacklisted by the U.S. Government, left Kentucky’s politicians befuddled Friday as its founder and the board of directors he appointed publicly battled for control of the company.
On Thursday, Braidy Industries released a statement saying CEO and Board Chairman Craig Bouchard had stepped down. On Friday, Bouchard pushed back.
Bouchard said on his Facebook page at 10:42 a.m. that he had just stepped off an international flight Friday morning and he “did not authorize the press release that was issued yesterday. I have not stepped down as the CEO of Braidy Industries, and I am the Chairman of the Board and CEO of Braidy Atlas.”
He added: “After I complete my next flight, have a chance to kiss my wife and hug my kids, I will begin to prepare a longer statement for you and for the press. Maybe for Monday consumption. My sole focus is rebuilding Ashland and NEK. I’m sorry for the stress that was created in Ashland yesterday. You don’t need that. Craig.”
The company, though, doubled down on its decision Friday afternoon in a statement from Charles Price, who the company identified as the now-chairman of Braidy’s Board of Directors.
“The Board of Directors of Braidy Industries confirmed its action of Jan. 28, 2020, removing Craig Bouchard as CEO and Chairman,” Price said in the statement. “The Board and CEO Tom Modrowski are committed to the Ashland community and focused on building the Kentucky mill.”
The company’s bylaws appear to give Braidy’s Board of Directors the authority to remove its CEO or Chairman, with or without cause, with a 70 percent vote.
“Notwithstanding anything herein to the contrary, the Chairman, President and/or Chief Executive Officer may be removed, either with or without cause, solely by an affirmative vote of seventy (70%) percent of the members of the Board of Directors,” the bylaws read.
Meanwhile, Kentucky Attorney General Daniel Cameron asked interim Economic Development Secretary Larry Hayes Friday to provide records by Feb. 7 about the state’s ties with Braidy Industries.
The Lexington Herald-Leader had asked Cameron about the developments at Braidy.
“The Attorney General’s office is aware of the leadership transition within Braidy Industries and is actively engaged in learning more about the change to ensure that Kentucky’s investment in the company is protected and that the anticipated economic benefit to Eastern Kentucky comes to pass,” said Elizabeth Goss Kuhn, Cameron’s communications director, in an email.
In addition to Hayes, Cameron addressed his letter to the cabinet’s Partnership Board, a board made up of 13 public-private sector mebers to provide “strategic governance” to the cabinet, and Commonwealth Seed Capital, a group that uses state money to invest in the early stages of businesses in Kentucky.
Braidy Industries became a hotly debated company two years ago when then-Gov. Matt Bevin, citing a desperate need for the hundreds of well-paying jobs the company promised to bring, invested $15 million of state money in the company, effectively making all taxpayers partial owners
Concerns magnified, particularly in Washington, when the Russian aluminum company Rusal promised to invest $200 million in the company. Rusal was under U.S. sanctions until early 2019 and has ties to a Russian oligarch close to President Vladimir Putin.
Friday’s drama created confusion among Kentucky political leaders.
Earlier in the day, Kentucky Gov. Andy Beshear said through a spokesman that had been told the resignation of Bouchard “will not impact the current status of the project.”
Senate President Robert Stivers expressed concern Friday before Bouchard’s Facebook post, saying “it’s been years and nothing has happened.” U.S. Rep. Thomas Massie, who represents the district, said it was not good news.
House Speaker David Osborne said earlier in the day that he had been told “the project is moving forward.”
Both Stivers and Osborne said they did not know of any request from the company for more state assistance or why Bouchard stepped down.
The company, in its press release Thursday, named its current president, Kentucky native Tom Modrowski, as its interim CEO. The aluminum mill is still on course for its expected completion date of 2021, the company said.
Braidy officials have said they expect the plant to cost $1.7 billion and bring hundreds of jobs to the Ashland area.
Stivers, R-Manchester, said he was briefed Thursday about Bouchard’s move and was told that “he was asked and amicably stepped down.” Stivers did not say who briefed him.
The legislative leader said he understood that Bouchard “could have done more because of his number of shares in the company.”
Asked to elaborate, Stivers said, “I assume whatever this corporate entity or corporate structure is, he owns a substantial amount of shares. Naturally, when you own large blocks of a corporation, you have substantial voting rights.
“I don’t know how much that is. I don’t what their articles or bylaws are.”
Asked if Bouchard’s move was driven by shareholders in the company, Stivers said he did not know.
“Until it gets built, you always have to have concerns,” he said. “This is one of the first things Gov. Bevin asked us to do that has not come to fruition. We placed our trust in him based on what he gave us.”
Everyone wants to see the project materialize, said Stivers, because it would be greatly helpful to a region that has lost AK Steel and will soon lose one of two hospitals.
If the project does not happen, Stivers said, he expects there would be an attempt by the state to get its money back either through litigation through the attorney general’s office or the Economic Development Cabinet.
Osborne, R-Prospect, said he talked to the governor’s office early Friday morning about Bouchard.
“They have talked to some local officials that are very confident that the project is moving forward,” said Osborne. “They are still excited about the project and expect it to be built, expect it to be completed. This governor’s office is committed to seeing it through and you know it’s a project that is going to mean generational change in that area.”
The only statement from Beshear’s office came through his spokesman, Sebastian Kitchen. It said, “We were previously advised of these changes and it is our understanding they do not impact the current status of the project.”
Massie, R-Vanceburg, said Friday afternoon that he did “not know what the deal is.”
He said he had no advance notice that Bouchard was stepping down “and it took me by surprise as well.”
Asked if he was concerned about the project, Massie said, “I’ve always assigned startup odds to it. It’s obviously a setback when a CEO and visionary leaves, so I don’t see this as good news.”
State Sen. Robin Webb, R-Grayson, represents the district where the proposed mill would be build. “Until I see the board minutes, I don’t know what Bouchard’s status is,” she said. “I still remain cautiously optimistic.”
This story was originally published January 31, 2020 at 12:09 PM.
