By Thomas Gryta | Photographs by Whitney Curtis for The Wall Street Journal 

David Farr looked down at the empty parking lot and blew up. It was March 20, a cloudy day with a chill in the air. The coronavirus and lockdowns were grinding the U.S. economy to a halt, sending much of the American workforce home, including most of those at the Ferguson, Mo., headquarters of Emerson Electric Co.

Mr. Farr, who had run the industrial conglomerate for two decades, wasn't going anywhere. He told his assistant to summon the other eight members of the OCE -- the Office of the Chief Executive.

"We have a company to run," he growled, his voice echoing through the empty sixth floor.

Mr. Farr wasn't naive. The virus had torn through China and Europe, disrupting Emerson's operations. It was just a matter of time before it spread in the U.S.

But World War II wasn't won by hiding, he liked to tell people, and generals can't lead their armies from the bunker. He expected employees to be present, and he wasn't going to run the company from his home office.

"We have customers to serve and we can't frickin' do it if nobody is here!" he bellowed to the group assembled in his office.

Covid-19 has tested executives like few other events in modern history. How they respond is making some careers and breaking others.

In more than three dozen interviews throughout the course of the year, Mr. Farr and his top lieutenants showed what it's like to guide a global enterprise without a map.

The CEO reveled in his firm control and belief in constant action. The pandemic rendered much of that experience irrelevant.

It sprouted crises for Emerson's widespread global operations faster than Mr. Farr could contain them. He butted up against the reality of government regulations, suppliers struggling to meet commitments and sick workers idling production.

For all his attention to detail, Mr. Farr knows he underestimated the threat. "Why did we miss it?" Mr. Farr, 65 years old, said last month. "I fault myself for that because I would have been better prepared."

And yet he never stopped moving. Pushing through a crisis, with small and reversible steps, and making tough choices, such as pursuing an acquisition and pushing out a lieutenant, is better in his mind than waiting to act.

"I might be wrong, but we get paid to make decisions and make calls," he said in April after he shared financial projections with Emerson's board of directors. "I would never jump off a cliff without knowing a bit about what is at the bottom. But I know you have to take jumps."

Seven charter planes

Emerson, with 90,000 employees around the globe, has roots in the 19th century, when it made the first electric fans sold in the U.S. Built up by acquisitions, it now produces cutting-edge systems that automate factory processes, and heating and air-conditioning equipment. It makes giant valves used in the oil industry as well as Insinkerator garbage disposals and the red Ridgid pipe wrenches used by generations of plumbers. It runs more than 200 manufacturing sites, with two-thirds of them outside the U.S. To shareholders, it's a business worth $45 billion.

On Jan. 21, Mr. Farr was in Mumbai with five of his top executives when he opened an email from the head of Emerson's China business, Jennie Li. She wanted to talk about a virus outbreak -- and a possible government plan to lock down the sprawling city of Wuhan.

The company employed 8,000 people in China at three dozen facilities. Fewer than 1,000 people were infected by the virus globally, and it was impossible to gauge where this would go.

Within days, China extended its Lunar New Year holiday to help slow the spread of the virus. Mr. Farr finished his trip to India and headed home, certain something big was brewing, even if its extent was unclear.

Back in Ferguson, Mr. Farr asked his chief operating officer, Steve Pelch, to put together a team to make sure they were doing everything they could to keep the China operations safe and running.

Mr. Farr knew that if China shut down, it could choke the company and the global economy. Production would slow as parts inventory thinned, orders would back up or be canceled and the loss of scale and sales would make each transaction less profitable. The resulting slowdown could reshape industries as companies shrank and others -- those smart enough to be ready -- grabbed market share.

Emerson's products were essential to keeping power and water utilities and other critical services running smoothly, even refrigeration for medicines and food. But now, a truck full of flow meters coming from its Nanjing factory and going to Shanghai was finding it almost impossible to get through.

The company reserved seven charter planes, ensuring it could get its products out of the country for months to come. It proved to be a lifeline when the cost of logistics skyrocketed.

This could all be managed, Mr. Farr thought. Seeing the Chinese government deal with the virus early in the year and reopen without major outbreaks gave him some confidence. "I got into a lot of heated battles around here in St. Louis because I had the opinion that you can live with this virus," he said.

On Feb. 4, Emerson reported first-quarter earnings. The coronavirus was mentioned nine times by executives on the conference call with Wall Street analysts. Mr. Farr expressed his concern for the Emerson workers in China. He predicted that the sales impact from virus disruption would be moderate but warned economic growth could stall later in the year.

The company expected its Chinese factories to restart on Feb. 10, Mr. Farr told analysts and investors. The Chinese plants did come quickly back on line. But Mr. Farr didn't anticipate what came next.

'I'm too busy to die'

Mr. Farr is old school. He runs an industrial conglomerate.

He likes golf and the company jet. He likes a glass of wine, or a vodka on the rocks, and goes on walks with his wife, Lelia, almost every night through their upscale neighborhood of Ladue just outside the city of St. Louis. He is up at 5:30 a.m. and tries to stop working around 8 p.m., but is still quick to answer emails later than that. He doesn't watch television outside the office and spends most nights reading, lounging with Rocket and Doon, his two King Charles spaniels, and going to bed early.

He grew up in Corning, N.Y., where his father was a math teacher before becoming a plant manager at glassmaker Corning Inc. The job moved the family to England, where his mother died from a cerebral hemorrhage when Mr. Farr was 18.

Fresh out of business school, he joined Emerson in 1981 and rose through the ranks working for a tough CEO who ran the place for 27 years with a focus on grinding down costs. Mr. Farr, too, is hard on his managers. His shouting is balanced by an affinity for hugs, handshakes and kisses. He dictates long memos to his secretary and enjoys "good debates, bad debates and yelling debates."

He is politically conservative and an admirer of Jack Welch, the hard-nosed former boss of General Electric Co. At an investor conference in 2009, he said he wouldn't hire more U.S. workers because the Obama administration was out to "fundamentally destroy" manufacturing with its environmental and labor rules. He declares a lack of interest in politics, yet he talks with the White House, governors and mayors and makes sure people know it.

Emerson's salesman in chief rarely misses the chance to pitch the company's products, even interrupting a conversation to tout a Ridgid "closet auger," a device for unclogging toilets. He roots, in jest, for heat waves, storms and flooding so Emerson can sell more air conditioning compressors and wet/dry vacuums.

Mr. Farr keeps five baseball bats in his office, including one signed by St. Louis Cardinals greats Stan Musial and Albert Pujols. He likes to swing the bats while he thinks. During earnings calls, he is known to poke people with a bat if he thinks they aren't doing a good job of talking to investors.

He has delivered steady gains for investors. Since he took over in October 2000, Emerson shares have logged a 311% total return, including dividends, compared with the 275% return from the S&P 500 index, and a 239% return for the S&P Capital Goods Industry Group Index.

He was just 45 when he was named CEO. Months into the job, he faced the bursting of the dot-com bubble in 2001 and the Sept. 11 terrorist attacks. The company's 43-year streak of earnings growth came to an end.

In an era of shrinking CEO tenures, Mr. Farr's has also spanned the 2008 financial crisis and the 2014 racial unrest in Emerson's hometown of Ferguson stemming from the fatal police shooting of Michael Brown, an unarmed Black teenager. Mr. Farr plans to retire next year, which means the pandemic will likely be his final challenge.

Though he didn't serve in the military, Mr. Farr approaches crises as if he was commanding his troops from the front line. "I'm not going to die, " he said in the first weeks of the pandemic. "I'm too busy to die."

Downward slide

As February turned to March, the virus ebbed in China but emerged in a new hot spot: Northern Italy, where Emerson has five factories and nearly 2,000 workers. The government locked down areas around Lombardy and Milan, then widened the shutdown to other regions and eventually the entire country.

"Is it going to grow in just pockets or is it going to grow across the whole country?" Mr. Farr wondered.

A major Emerson conference for European customers scheduled for mid-March in Milan was canceled. The company pulled out of an oil-and-gas conference in Houston. In the relatively untouched U.S., Emerson started shutting down offices and giving employees instructions for working from home.

In early March, St. Louis reported its first case of coronavirus. Shortly after, pharmaceutical giant Bayer temporarily shut down a major facility just outside of St. Louis when an employee was suspected to have become infected.

Mr. Farr went forward with a March 10 dinner with Emerson's latest class of new M.B.A. hires.

The annual dinner and drinks was a tradition. Emerson hosted the group in a private room at the Saint Louis Club. Mr. Farr loved to attend and spend time with what could be Emerson's next generation of leaders. He relished the mentor role and all that came with it.

"I'm shaking your hand so go wash your hands when I stop," he told them as he held their grip. The company would end up tracking the group for 14 days after the dinner to make sure no one got sick. No one did.

The day after the new-hire dinner, Mr. Farr arrived at J.P. Morgan's offices in Midtown Manhattan to meet with analyst Steve Tusa. The bank had changed its investor conference to a virtual event, but Mr. Farr was intent on participating in person -- he believed in-person interactions were crucial to running a business.

It was Wednesday, March 11. Later that day, the National Basketball Association put its season on hold after a player for the Utah Jazz tested positive for the coronavirus, the first time many Americans realized the virus would disrupt their daily lives.

Seeing Manhattan's vacant streets made Mr. Farr realize the virus was coming fast and might get bad. He mentioned to Mr. Tusa how empty New York was.

"We need a different plan," he wrote in an email that weekend to the other members of the OCE.

Two of the members were already in quarantine for two weeks because they were just getting back from vacations. Meanwhile, a worker on the fourth floor of the headquarters building had come down with symptoms resembling Covid-19 after a ski trip in Colorado.

Over the next few days, the company decided to shut down most of the building and have most people work from home. The executives stayed on the sixth floor. Mr. Farr paced the quiet offices and looked out with frustration at the empty parking lots.

It took 15 days for the test results of the suspected infection to come back. It was negative.

"I can't just wait for 15 days to take action," Mr. Farr said.

South of the border

At a small manufacturing facility about 100 miles from the U.S. border in the Mexican state of Sonora, an Emerson supplier makes a tiny component for a communication circuit used in numerous Emerson products. Officials in Sonora shut down the facility in late March.

"Every day we fight in Mexico" with its federal government, Mr. Farr said. "The Mexican president has not been really in tune to try and keep a coherent strategy."

He turned to Mike Train. The executive was an Emerson lifer who began his career in Hong Kong, where he was roommates with a young Mr. Farr, then running the Asia region. Already a close adviser, he had now emerged as something of a fixer.

When Pennsylvania shut down an Emerson foundry in Erie, dubbing it a "non-life-sustaining business," Mr. Train navigated federal and local bureaucracies to get it and other U.S. facilities back online.

Now his biggest problem was in Mexico, where Emerson has 19 factories with 10,000 employees. "There was never any thought that [Mexico] was going to be a problem in our supply-chain architecture," Mr. Train said. "Until it was." The key was getting certified as "essential."

With a few hundred coronavirus cases emerging in Mexico, the governors of several Mexican states issued stay-at-home orders and told nonessential businesses to close.

Mr. Train enlisted the Mexico ambassador in Washington to coordinate with her counterparts in Mexico City in a push to reclassify Emerson's plants. It failed.

Mr. Farr reached out to the White House for help, including talking to President Trump to make his case. "The president said just move the plants back" to the U.S., Mr. Farr said. "That is a good idea sure, but not something we can do today."

Mr. Farr was hearing from executives at other companies who were complaining of restrictions in Mexico.

Emerson teamed up with some, including Honeywell International Inc. and Trane Technologies PLC, to set up Zoom calls with regional governors and other Mexican officials to get the designations needed to keep their operations running.

Within days, more than 300 CEOs had signed a letter calling for help with supply-chain issues and getting companies the "essential" label.

Emerson outfitted its Mexican facilities with safety equipment, made sure distancing requirements were met and installed outdoor washing stations for workers before they entered the buildings, among other moves. It couldn't make changes in workers' behavior outside of work, where the company thought most people were getting infected.

It wasn't until May that Emerson's Mexico operations were fully authorized to reopen.

Elder statesman

By mid-March, the OCE was meeting in person every day at 2 p.m. to review virus statistics, updates about workers and talk about issues at Emerson facilities around the world. The executives also discussed their own stress relief efforts, including where to find deals on the best wines.

Mr. Farr worried about his workers' well being. He prided himself on knowing employees, walking factory floors and visiting dozens of facilities a year.

Outside the company, Mr. Farr knew that investors were concerned about what was happening. There was little information. Companies such as FedEx Corp. and Ford Motor Co. were declining to give financial guidance or were withdrawing their previous outlooks altogether.

Mr. Farr decided Emerson needed to report its second-quarter results and provide an outlook earlier than usual. He wanted to lay it all out for investors so they knew where Emerson was going, and he wanted to do it before other industrial companies. Among the giants, only GE by early April had issued a warning its latest quarter would miss its profit goal.

Mr. Farr saw himself as an elder statesman of U.S. manufacturing -- he is now the longest running leader in the sector. "I've known four Caterpillar CEOs since I've been CEO," he said. "I felt that a lot of investors would look to me to get a sense of what is going on."

He set a board meeting for mid-April to review results. He knew the board would have questions about Emerson's cash position, its ability to protect the dividend and its future direction, including active acquisition talks. He figured the company faced five or six tough quarters to get through the crisis.

Mr. Farr wanted reports from the business units on their plans, and he wanted to know what programs needed to be protected so they didn't slow down. He was watching to see who was stepping up to keep operations functioning, and who was disappearing. "And I don't forget," he growled.

On April 21, Emerson reported financial results for the second quarter, which ended March 31 and included only a few weeks of the U.S. shutdown. Profits fell 1% and sales dropped 9%. Underlying orders only fell 3%, but Mr. Farr warned investors that the "real impact started in the last 2 1/2 weeks in March."

Goodyear Tire & Rubber Co., Macy's Inc. and dozens of other corporate giants had slashed their dividends. Mr. Farr declared that Emerson's payout was sacred and wouldn't be cut.

"I'm not dead though people have tried to kill me. I'm still quite strongly in charge. And as long as I'm here, our dividend will not be cut," he said. Emerson had increased its dividend every year since 1956, and Mr. Farr was privately planning another increase in November.

Emerson surprised Wall Street by being one of the few companies to give a financial outlook for the year, cutting its sales, earnings and cash-flow projections.

"Thank God we're not in the travel industry," Mr. Farr said on the earnings call.

Mr. Farr laid out his strategy for returning to work. The economy couldn't wait for a vaccine. He said widespread testing with quick results was the key to being able to operate alongside the virus. Until then, companies and workers needed to do the best they could to minimize the spread. He revealed that an Emerson worker in England had died from Covid-19, the company's first death from the virus.

The detailed disclosures in the two-hour call won praise from analysts. Mr. Farr said it was necessary during the pandemic but warned them not to get used to it.

"We'll never give this much information again," he said.

Back to the office

Mr. Farr marked down May 4 -- the first date the governor of Missouri said businesses could start reopening offices -- as the day to open up the headquarters building.

People were starting to go outside. The sun was shining in St. Louis. The weekend before, Mr. Farr and his wife played golf for the first time since December. They walked 14 holes. He played horribly. A hairdresser came to the house to give them both haircuts. On Sunday, Mr. Farr climbed a ladder and cleaned the kitchen chandelier for the first time in years.

Some executives were leery about reopening quickly, but Mr. Farr was determined to move faster.

The factories were more or less already humming around the world because they were deemed essential. Adjustments were made to keep plant workers safe, including temperature checks, spacing out work and splitting shifts in some locations.

His strategy for headquarters was to take it step by step, reversing if any problems arose.

Before the shutdown, the long, low-rise corporate building typically had about 300 workers. Inside the front door there were stations for employees to go through: a temperature check, a list of questions to answer and supplies of masks if people wanted them. There was a nurse on hand.

One of the biggest debates was about requiring masks. The OCE executives went through the questions. Were they helpful? When should they be used? How vigilant should a company be in pushing for compliance?

Missouri didn't require mask use in public, and messages from health and political leaders were conflicting. For months, Mr. Trump refused to wear a mask and declared their use as voluntary.

Mr. Farr had worn a mask twice since the lockdown began. Once was during his home haircut and another was on a trip to a Walgreens pharmacy.

The sixth-floor executives generally weren't wearing masks in the office. Executives didn't need them, they thought, if they just stuck to their regular paths. They decided that employees coming back to work would wear them in open, common areas like the cafeteria and elevators.

"If you're not feeling well, or if you're running a temperature or you're coughing, you need to leave the premises," Mr. Farr said. "We've gone that route, rather than where everyone wears a mask."

Workers came back in groups through May, with the final batch after Memorial Day.

But summer was making Mr. Farr uneasy. A CEO could safeguard offices and factory floors, but that meant nothing if workers weren't safe while off the clock.

The weather was improving and two holidays loomed as giant traps for a population eager to break out after a lonely few months. People were likely going to see family on Mother's Day. Then there was Memorial Day, when everyone celebrated the unofficial start of summer with barbecues, drinking and forgetting about the rules.

Mr. Farr saw his neighbors having parties and knew people weren't behaving themselves. "Those are the things I have to worry about on a daily basis rather than figuring out what competitor I want to kill," he said.

He noticed that when employees saw executives weren't wearing masks, they would remove their own.

Mr. Farr changed his habit, and started donning a mask to walk down the hall to the restroom. "We got really used to having the run of the place, " he said. "If there's more of us around, you got to be doing the right things, you've got to be following your own rules."

Another challenge

Summer brought more trauma after the killing of George Floyd, a Black man, in police custody in Minneapolis. It reignited protests in Ferguson, which was racked with unrest after the 2014 killing of Mr. Brown.

More than 200 employees joined virtually with Mr. Farr and other executives to discuss racial issues in the company and society. Black employees shared their experiences, and Emerson discussed increasing diversity at all employment levels.

Despite the virus's continued spread and social unrest, Mr. Farr was feeling more comfortable with Emerson's financial performance and signs of strengthening orders. "The data's telling me the bottom's going to start forming," he said.

Mr. Farr had enough experience with crises to know that the winners were the ones who were ready to supply products to customers when demand increased. Those pivotal times remade entire industries.

In his experience, he said, market share rarely shifted in Emerson's businesses, so customers won't leave "unless you really, really f -- up."

In the midst of the crisis, Mr. Farr was quietly pursuing an acquisition to bulk up Emerson's Power & Water business. He had been negotiating terms with Open Systems International Inc., a Minneapolis-based developer of software used by utilities to manage power grids.

Emerson had been watching the privately held company for years and thought they were ready to sell under the pressure of the pandemic. Any deal would cost more than $1 billion.

At the same time, Mr. Farr was also exploring a deal for OSIsoft LLC, a SoftBank-backed maker of software to capture data from power plants and other industrial facilities. It was a larger business, and that deal would be much more expensive. Both companies had multiple bidders circling.

At the June board meeting, an Emerson director asked if Mr. Farr could guarantee that his decision to quickly increase investment in businesses with hints of improvement would work.

"No. I can't guarantee s -- ," Mr. Farr replied. "But I'm telling you right now, based on my experience of being around this business for 40 years and being CEO of this company for over 20 years, I can tell you my intuition tells me if I see certain evidence [of improvement], we're going to be pushing it."

'Ask for forgiveness later'

Mr. Farr had just gotten off the phone with KPMG LLC, Emerson's auditors since 1938, and he was steaming. The problem: It was June and they were still working from home.

"Look. I make s -- , and you can't tell me how I'm making s -- when you're sitting in your goddamn living room," Mr. Farr recalled yelling days after the interaction. "Get your a -- out to my factories, look at my people on the line, and tell me if they're telling me the truth or lying. That's what you're supposed to do. That's why I pay you $25 million a year."

Mr. Farr felt remote work was bad in the long-term, so much so that he had advised his son to get back on the road for his job as a field marketing manager for Caterpillar Inc. in Atlanta before the company began bringing people back.

Travel, pay for it yourself, ask for forgiveness later, Mr. Farr barked at his son.

At the same time, he worried about the safety of his daughter, a pastry chef in a Manhattan restaurant. She had refused to leave New York -- an early virus hot spot -- even after Mr. Farr implored her to come home to the less-crowded Midwest.

Before the pandemic, Mr. Farr usually spent about a third of his time traveling. As summer started he planned a trip to an Emerson plant in Pittsburgh in June and a meeting with investors in August. He also scheduled business trips to Germany and possibly Romania.

"I have a large organization and operation there, I'd like to get in there and see what's going on," he said. "And then we'll most likely go into Tokyo and then Seoul."

On June 16, he flew to Pittsburgh on a corporate jet holding only half of its usual limit of 10 people. "It was very energizing to be on the plane," he said.

His mood changed when he saw the airport was empty. He could see more than two dozen parked commercial airplanes. The state's policies were "messed up," he said to no one in particular.

A team of executives were there to meet the CEO at the airport. The group jumped into vans and drove across town. There was no traffic.

The Power & Water leaders took the CEO to a conference room to discuss the operations and financial targets. Mr. Farr couldn't walk the factory floor. The site managers had asked him to stay away in order to avoid safety risks to workers and the visiting executives.

That was fine with the CEO. He was just happy to be out working with his people. He planned to fly to Boulder, Colo., the next week for another business review.

"It's all going back to trying to make people feel like we're back in business, it's back to normal, it's safe, I'm here to talk," he said. "People are getting tired of [video calls] and stuff like that."

There was a summer surge in Covid-19 cases around the country. Still, Emerson wasn't changing anything about its overall operations. It was closely watching the data near its facilities and "communicating the s -- out of everybody," according to Mr. Farr. He sent a letter to employees reminding them "have a good 4th of July, but behave."

Faced with growing infection numbers, Mr. Farr canceled the Europe and Asia trips.

Even though he had concerns about board members coming in from states like Texas and Florida, he decided to stick to plans to hold Emerson's August board meeting in person. Virtual board meetings weren't good for companies, he thought, and the directors needed to be together in person to properly oversee a business.

"You got a company going through a crisis and none of the directors, who represent the shareholders, are here," said Mr. Farr, who is also Emerson's chairman and a member of the board at International Business Machines Corp. They can't read body language or have a free-flowing conversation, he said. "I know boardrooms think they're doing the same as always, but they're not."

'Not satisfying our customers'

Months into the pandemic, Mr. Farr felt people were learning to live safely with the virus, and he wanted them back at work.

By July, the sight of empty parking lots was still a trigger -- even at other companies. The lot at the offices of Express Scripts, a unit of insurer Cigna Corp., set him off. "I can't believe this thing. It's July 7th," he said.

Mr. Farr was so annoyed he groused that he ought to call Cigna's CEO and ask if he had closed the Express Scripts headquarters.

Cigna, in response to a query, said it was following guidance from state and local health officials and was taking a phased approach to reopening.

Daily new cases were rising, but death rates were far from their peak in April. He believed the U.S. strategy to flatten the spread of the virus and not overwhelm medical resources was effective, but was never intended to eliminate the virus. He was frustrated that a local virus task force was warning the public about coming dangers, and blamed the media for alarmist headlines.

He wasn't discounting the crisis, but thought the country was managing.

The July 4 holiday didn't cause a jump in Covid-19 cases at Emerson. The daily meetings for executives to discuss the virus had been reduced to twice a week.

July was also the beginning of Emerson's fiscal fourth quarter, traditionally its strongest of the year. It hadn't yet reported the third-quarter results, but Mr. Farr said his estimate of a 15% sales drop was accurate. He could see the commercial and residential division, a mix of businesses including tools, heating and air conditioning, started to improve in late June. He expected the automation division, which supplies factories, oil producers and utilities, to lag but follow the same trajectory.

He didn't expect sales growth to return until the second half of 2021, but saw encouraging signs. White-Rodgers, an Emerson unit that makes thermostats and HVAC controls, was seeing higher demand from equipment manufacturers.

Still, nagging problems persisted. The Racine, Wis., Insinkerator division struggled to keep its production lines running as cases spread -- just as home renovations turned out to be a bright spot in the pandemic economy. Mr. Farr offered to send workers from the St. Louis area to help, but local managers declined. They asked salaried workers in Wisconsin to pick up shifts in the factory.

"We're not satisfying our customers, to be frank," said division president Joe Dillon in July. "We're doing our best on a daily basis to satisfy as many customers as we can, but it's challenging."

Mexico had shown signs of improvement, but between 5% and 7% of Emerson's workers there still weren't showing up for work -- down from 15% absent earlier in the pandemic.

The Mexican government had encouraged companies to pay workers 100% of their wages even if they were idled. After a few months, Emerson started cutting back the payments to 75%, then to 50%.

"When we hit that number, it's amazing how many people wanted to come back to work," Mr. Farr said.

Emerson moved some production of critical parts out of Mexico to locations with extra capacity in the U.S. and Southeast Asia, but production still wasn't enough. The headaches spurred a broader assessment of the company's operations in the country.

"Mexico is the only place I've seen that I have to really assess my manufacturing facilities," he said.

Ready for the upswing

In the first week of August, Mr. Farr brought Emerson's top 30 executives to headquarters to talk strategy and expectations for fiscal 2021 and 2022. The discussion centered on how the different businesses would return to growth and when to commit people and capital to take advantage of that upswing. There were also dinners and socializing, the same sort of behavior that he warned against in missives to workers.

"I got to see some of them for the first time in several months. It was pretty exciting, and I drank too much," he said. "I mean, these are things you do all the time and we haven't done it for a while so it's like, 'OK, we've got to make up for everything we missed.' "

The dinners were outside with tables of eight set for three or four people. But mingling was hard to stop. "People were a little closer than 6 feet," Mr. Farr admitted the next day.

Typically Emerson sees fourth-quarter sales growth of 6%-8% from the third quarter, but this year he thought it could be double that rate. As Mr. Farr had stressed in recent months, now was the time when the plants needed to be running well to meet demand.

The surge was mostly coming from the commercial and residential division, which benefited from DIY renovations and from hot weather driving air conditioner demand. Sales in the unit typically drop 5%-10% in the fourth quarter from slowed construction and European vacations. Now it was expected to swing to positive growth of 5%-10%.

Many of Emerson's customers had run down their inventory and needed to replenish as business started coming back.

The company reported its third-quarter financial results on Aug. 4. They were largely in line with Mr. Farr's forecast in April, including a 16% sales drop. Emerson also said its full-year profit would be better than it thought.

Mr. Farr updated investors on cost-cutting efforts and said sales in the first three months of 2021 could begin growing. Keeping factories running safely would be vital, he told investors.

Reconfiguring factories for worker safety was spurring permanent changes. Mr. Farr didn't want to build more floor space to solve the problem. "We're going to have to bring in automation," he said. "We're going to have to take labor out."

While Mr. Farr's attempt to hold an in-person board meeting again failed, he continued to pursue a takeover of Open Systems, the maker of power-grid software, and the much larger potential acquisition of OSIsoft.

On Aug. 25, OSIsoft was bought by a British industrial software company Aveva for $5 billion -- Mr. Farr had dropped out of the bidding when the price went above Emerson's threshold.

Two days later, Emerson announced it was paying $1.6 billion in cash for Open Systems. The deal expanded Emerson's power-station management software into renewable power sources, an increasingly important part of the industry.

Moving forward

Over the summer, Mr. Farr had resumed site reviews around the country, making quick day trips on the company jets to Texas, Wisconsin and New Jersey. He expected planning sessions with business leaders to begin in December or January. Instead of unit leaders having to come to headquarters and present their plans, he would visit them. Trips to visit companies in Europe or Asia would have to wait.

The pandemic didn't slow Mr. Farr's retirement plans. He expected the company to stabilize by the time he planned to step down at the end of 2021. In August, he told Bob Sharp, the head of the commercial and residential business, that he wouldn't be chosen to succeed him, prompting Mr. Sharp to leave Emerson.

Emerson's annual October strategic meeting was held at headquarters. About 110 people traveled to the meeting for two days with 600 others attending over video. The executives spread out in an auditorium for two three-hour sessions.

He was also pushing to get leadership development training back on the schedule. He figured the pandemic cost Emerson a year's worth of time in developing future leaders, something he considered crucial. He didn't want to fall further behind.

And as he had pledged back in the spring, Emerson increased its quarterly dividend in early November by half a penny to 50.5 cents a share, marking 64 years of regular increases.

More than 10 months into the pandemic, Mr. Farr was still as confident in November as he was at the outset that the deadly virus wouldn't permanently change how people live. He saw the crisis as a vindication of his instincts and management methods.

"As soon as you hear someone say 'the new normal,' plug your ears, and say, 'bulls -- ,' " Mr. Farr said. "Since I've been CEO I've seen a lot of new normals."

He described his effort to attack the crisis with a combination of analysis and gusto. "Once we saw that it was going to really impact our business or the communities or the world that we're operating in, [the strategy was] basically to break it down just like any planning process, " he said in November. "If you ran into a wall, like the states trying to shut us down, you ran at the wall and you tried to figure out how you climb that wall."

As of Nov. 30, nearly 2,500 workers at Emerson had fallen ill, and seven had died.

Mr. Farr was adamant that he would get a vaccine once it was available -- and wanted his workers to do so, too. "I just think that the amount of pain we've gone through as a nation and as a world and business world, if you don't get a vaccine, you're a hypocrite," he said. "If you don't worry about this thing, something's wrong with you."

Emerson plans to reconfigure its more than 200 manufacturing facilities around the world over the next year using automation so it can space out workers but maintain production at pre-pandemic levels.

In Mexico, the review led Mr. Farr to determine certain areas weren't suitable for future expansion. Another review produced plans to build more backup systems into its global supply chain.

Mr. Farr's efforts to get the Emerson board to meet in person still haven't succeeded -- the October board meeting was also virtual. But the CEO has been able to travel. In November, he went to the Masters Tournament with his wife at Augusta National Golf Course, where he is a member. And he slipped into Manhattan to meet investors for a face-to-face dinner in a private room. He planned at least one more similar meeting this year.

Demand is rising among Emerson's customers, so it is hiring more staff than usual -- even though it cuts into profits -- to make sure production isn't slowed if workers become sick.

Mr. Farr hasn't stopped coming to the office. There is more traffic on the roads in St. Louis, but the parking lots around town are still mostly empty.

He suspects his industrial rivals aren't back in their offices yet either. "I like competitors that are still sitting at home," he said. "They'll miss the trains when they go by."

Write to Thomas Gryta at thomas.gryta@wsj.com

 

(END) Dow Jones Newswires

December 04, 2020 10:31 ET (15:31 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
Emerson Electric (NYSE:EMR)
Historical Stock Chart
From Dec 2020 to Jan 2021 Click Here for more Emerson Electric Charts.
Emerson Electric (NYSE:EMR)
Historical Stock Chart
From Jan 2020 to Jan 2021 Click Here for more Emerson Electric Charts.