Gen. William Lyon has a new No. 2 in command at the Newport Beach-based homebuilding company that bears his name.
He’s also got a family member waiting in the wings.
Wade Cable, president and chief operating officer of William Lyon Homes Inc. since 1999, is retiring as of this week.
He’s set to stay on as a director of the company, which has been Orange County’s second largest homebuilder the past two years.
Cable’s position is being taken over by Douglas Bauer, who moves up a spot in the company’s hierarchy.
Bauer, 45, previously served as the company’s executive president.
He also ran William Lyon Homes’ Northern California region and served as chief financial officer. He’s been with the company for 18 years.
Taking over Bauer’s executive vice president role is Gen. Lyon’s son, Bill H. Lyon, 33.
The younger Lyon, previously a vice president, has been with the company for nine years.
In addition to the executive vice president title, the younger Lyon is set to keep his role as chief administrative officer.
The promotion of Lyon (over six senior vice presidents) is the clearest sign yet of Gen. Lyon’s plans for passing the reins at the business he started nearly 50 years ago via a predecessor company.
Last year’s taking of William Lyon Homes private also was seen as a way for Lyon, 83, to speed up a possible succession plan.
Bill H. Lyon “had a lot of input in the move to go private,” Gen. Lyon recently told HousingZone.com, a trade publication.
“He decided he wanted to be a builder in the sixth grade,” Gen. Lyon said of his son. “We started him in the business when he was 11. He trained under some of our best supers. Then he went to Stanford and got a degree in industrial engineering. I told him not to decide on a career until he got out of college. He came home at Christmas of his senior year and said he still wanted to work in the business. That was 10 years ago.”
Gen. Lyon, who was chief of the Air Force Reserve from 1975 to 1979, took the company private last summer, with Cable voting his shares for the move.
Lyon ended up paying about $275 million to buy the rest of the company he didn’t already own.
-The final deal valued William Lyon Homes at about $950 million.
Good Investment
William Lyon Homes proved a good investment for Cable, 58. He had been one of the company’s largest shareholders during run-ups in the company’s stock during the housing boom.
He reportedly made more than $30 million about a year ago when cashing out on a quarter-million shares of Lyon stock.
Cable had served as chief executive of homebuilder Presley Cos. from 1984 to 1987, when Gen. Lyon bought the company.
In 1999, Presley and William Lyon Homes were combined, at which time Cable moved into his current role.
“Wade and I have had a strong relationship for more than two decades,” Lyon said in a statement. “Together we saw Presley through some very difficult times in the 1990s, and his leadership has been key to the success William Lyon Homes has enjoyed these last seven years.”
Slowing Sales
The changes in the company’s executive ranks come during a time of transition in the California, Arizona and Nevada housing markets that William Lyon Homes focuses on.
The company reported 2,202 orders for new homes last year, a 34% drop from a year earlier.
Orders in California, the company’s largest market, were down 34% to 1,402 homes.
For OC, William Lyon Homes sold 266 homes last year, according to the Business Journal’s recent list of homebuilders. That was down 59% from a year earlier, but enough to make the company the second-biggest homebuilder here in 2006.
The company’s total backlog of homes sold but not closed was 606 at the end of the year, a 53% decline from a year ago.
On the positive side, orders in the fourth quarter were up 10% to 504, compared to a year ago. In California, orders were up 16%.
Lyon Homes reported cancellation rates of 33% in 2006, compared to 16% in 2005. In the fourth quarter, the cancellation rate was 35%.
The company was selling at 53 developments at the start of the year, up from 41 a year earlier.
