Building products company James Hardie lands Aaron Erter as its CEO

The new building materials’ boss reveals his plans to steady the company as it faces strengthening economic headwinds.

James Hardie Industries’ new chief Aaron Erter and incoming chair Anne Lloyd.

James Hardie has appointed PLZ Corporation boss Aaron Erter as its new chief executive, ending a difficult eight month period since the abrupt exit of Jack Truong.

The building materials company on Friday told investors Mr Erter would start effective immediately and be based in James Hardie’s Chicago offices.

Mr Erter was appointed after a comprehensive search conducted by Heidrick & Struggles.

James Hardie had in January sacked Mr Truong, describing the work environment under him as “too hostile” and suggesting a score of executives had threatened to leave if nothing were done.

Chairman Mike Hammes denied there were issues with workplace culture, despite alleging managers had described Mr Truong’s behaviour as “intimidating, threatening and not respectful”.

James Hardie has made changes at the top. Picture: Reuters

Mr Truong, who was appointed chief executive in February 2019, has denied the allegations and said he had been “blindsided” by the termination.

Reacting to the departure of Mr Truong at the time, RBC Capital Markets analyst Paul Quinn told clients he had “never seen something like this but ­appreciate the board’s decisive action”.

Mr Erter will take over from interim CEO Harold Wiens.

“Aaron is an exceptional leader and we’re excited for him to join James Hardie,” Mr Hammes said on Friday.

“Aaron has more than two decades of experience leading large and complex industrial and consumer businesses … Aaron brings a wealth of experience and passion to James Hardie and will be supported by our highly capable leadership team.”

Mr Erter, 49, studied at the Wharton School at the University of Pennsylvania and later the University of Notre Dame.

He has spent close to two years running PLZ, a North American manufacturer of aerosol and liquid products. He has also held roles at paint and coating manufacturers Sherwin Williams and Valspar.

Mr Erter spent Friday touring James Hardie’s waterfront US headquarters in Chicago, opened under Mr Truong, after conducting a company-wide town hall.

He said he’d “long admired” James Hardie and jumped at the chance to join the firm.

“I have been fortunate to work for some world-class organisations in my career, and I am confident that my experience and expertise align with what James Hardie needs in a leader,” he said.

Jack Truong says he was blindsided by his sacking.

James Hardie in August said it had missed earnings expectations and cut guidance in its first-quarter results. The company said it expected full-year earnings to come in at between $US730m ($1.04bn) and $US780m, down from the $US740m-$US820m range.

Global adjusted earnings before interest and taxes increased 15 per cent to $US208.4m in the three months to June 30, with an adjusted margin of 20.8 per cent.

Profits have climbed 34 per cent after the impact of price rises flowed through to the business, hitting $US163.1m in the period.

Rising transport, energy, and input costs all weighed on James Hardie, leading to a compression in margins despite attempts to head off inflation this year when the company pushed through a round of price rises.

Energy costs were up 62 per cent against the same time in 2021, while freight costs were up 26 per cent.

Recycled paper, used in the production of some products, has jumped 27 per cent in price, followed by wood pulp costs at James Hardie’s North American operations – up 16 per cent in the quarter.

James Hardie has pushed another series of price rises through its business, hitting US shoppers on June 22, and they will affect customers in the Asia-Pacific region in September.

Mr Erter on Friday said the company was in a “solid financial position”. “There is a high performance culture focused on creating a positive impact in the communities we serve,” he said.

“The relentless pursuit of providing solutions to the trade and offering materials that help beautify and protect homes will continue to grow under my leadership.

“These are qualities that have built the business into the leader it is today and will be our guiding principles as we move forward.”

James Hardie’s deputy chair, Anne Lloyd, is set to take over from Mr Hammes in November.

“Aaron brings experience leading global teams and the ability to execute strategies that combine innovation, marketing to the homeowner, and penetrating new and existing markets and segments,” Ms Lloyd said.

“Aaron has proven capability and extensive experience in understanding the consumers’ needs, commercialising the right innovative products to meet those needs, and driving growth through the right consumer marketing.”

James Hardie shares closed up 3c on Friday at $33.24, having fallen 41 per cent since December 31.