FAMILY BUSINESS: Panel studies challenges

People who attended a roundtable discussion at Hofstra University last week got a rare, behind-the-scenes look at the travails of running family-owned companies, like Fortunoff.

"I took my children to work as soon as they were able to crawl on the floor," said panelist Helene Fortunoff, who - along with her late husband, Alan Fortunoff - ran Long Island's best-known retail store, in Westbury, for decades, until it closed last year.

"They worked in storerooms. At about age 12 they would be out on the floor. We put a suit" on one of the Fortunoff sons, she said. "People would come up and say, 'There are child labor laws.' I guess you could say I dragged them, but it was a worthwhile experience."

Panelist Kenneth Brodlieb, chairman of East Hills Chrysler Jeep Dodge Inc. in Greenvale, said he always encouraged his son and daughter to come to work with him, but initially he balked at hiring his son full-time for fear they would argue.

But "he kept calling me" and eventually was hired, Brodlieb said.

David McQueary, former president of Missouri-based drug distributor McQueary Brothers Drug Co., which was acquired two years ago by McKesson Corp. of San Francisco, said he once had to fire a nephew for failing to report to work. "He wanted to watch the Super Bowl instead," McQueary said.

Not all children follow their parents' lead. Fortunoff said one of her children "went through hell" in school with the Fortunoff name. The daughter went to school in Arizona and became a potter out west.

Moderator Norman Goldberg, a Hofstra lecturer and former Fortunoff chief operating officer, noted that 75 percent of family-owned businesses fail by the third generation. "The failure is often the inability to deal with family members working together," he said.

The impact

35 percent of Fortune 500 companies are family-owned businesses.

Family-owned companies are responsible for 60 percent of the nation's employment and 78 percent of new jobs created.

Among the companies listed on the Standard & Poor's 500 Index, 34 percent are family businesses.

Sources: Gaebler Ventures Web site, American Management Services Inc., Ronald C. Anderson, David M. Reeb