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Texas Gal
Chapter Twenty-Six Occasionally You Get a Lemmon
In the morning I put on the same business suit that I had worn on the day that I had agreed to buy the Danbury plant. It had brought me good luck once; maybe it would again.
When I arrived at the office I found an envelope from Jeff Goldblum waiting. Inside was a report from his investigator about Plymouth's recorded debts, property tax payments, and a credit report. I gave Nancy my notes from yesterday's trip to Greenfield and Danbury so that she could type them, when I went to the executive suite lobby to meet Bob, Bill, and John. We traveled down in the elevator and found James waiting by the limo. After we settled comfortably into the rear seats, James drove the limo out of the parking lot and we began our two-hour trip.
Bill had brought along Dunn & Bradstreet reports, plus a pad full of notes about Plymouth's money problems. I passed the investigator's report around so that everyone could read it also. We spent the trip talking about Plymouth, and what we could do with it if we bought it.
James didn't have any problems finding the plant from the directions that he had gotten. Since all paper plants use enormous quantities of water in the manufacture of paper, once you find the river, the plant won't be far away.
We arrived at 10:22 and found Mr. Lemmon standing in the reception lobby with another man that he identified as Mr. Slater. I wondered if Mr. Lemmon had been waiting for us, or if someone who had seen the limo enter the grounds had summoned him. After introductions all around, we learned that Mr. Slater was the company comptroller and we adjourned to Mr. Lemmon's office.
The first order of business was to order refreshments from Mr. Lemmon's secretary. Most ordered coffee. Only John and I requested tea. We made small talk about the weather, the drive down, and other things until the beverages arrived, then we got down to business.
Mr. Lemmon said, "Thank you for coming out here, Miss Drake. I hope that we can reach an equitable agreement that will be to our mutual benefit. As you no doubt know, our situation is… fragile. We had only just finished a complete modernization and expansion when we began to lose customers. We discovered that some of our loses were going to Piermont, but most were going to South-Core. Our sales staff didn't seem able to stop the losses nor bring in any significant new business and revenues began slipping badly. We've used up our cash reserves making payments on our note and paying salaries. We have an excess of inventory in our warehouse but virtually no customers. Several months ago our entire sales staff walked out and were hired by South-Core immediately. After that, our loss of customers intensified quickly. We assume that the friendly relationship between salespeople and purchasing agents was responsible. We've tried to replace the sales team but each time we hired someone, they called to say that South-Core made them a better offer, and quit before they started."
"Based on the information that I have, they definitely have you with your back against a wall."
"If you weren't present I would use a more graphic description."
I smiled and said, "I can imagine."
"Miss Drake, I've been totally honest with you. I'm sure that you have all this information already anyway. I know your reputation for preparation and thoroughness. A friend at the county clerk's office told me that someone was looking into our situation yesterday. Was that your investigator?"
"Yes, Mr. Lemmon."
He smiled. "I thought so."
"Mr. Lemmon, it's only good business to know what you're getting into. You're situation is indeed desperate, but before we start talking numbers, would you care to give us a tour of the plant?"
"Of course. Miss Drake."
We started with a tour of the office areas. There was only a skeleton staff working. The offices were well appointed and it appeared that the company had spent a bundle outfitting them.
Next up was a tour of the paper production areas. Like Piermont, the paper forming machines were in two different buildings that were attached at several points by automatic fire doors. As Mr. Lemmon had indicated, most of the equipment was only a year old. John poked and prodded, looking into tanks and lifting covers, and peering under the machines, as he had done at Greenfield, but this time he only nodded when we reached the back of the second plant. The equipment was not functioning and I had only seen a single maintenance man in the entire paper production area.
We had to open a motorized fireproof door to get into the warehouse. Mr. Lemmon had not lied. The warehouse was full of paper. Apparently they had continued to keep their crews busy as business slacked off. Inventory must have kept piling up as they waited for things to rebound, but they never did, and they had waited too long to start cutting back. We walked around the enormous warehouse looking at the mountains of paper. About half of it was the white, bleached type that we produced at Piermont and Greenfield, and the other was brown Kraft paper. Neither of our plants could make Kraft paper since it employed a different process from the white and you couldn't easily switch production. There was no doubt that this was a factory just waiting to go back to work. All they needed were customers and employees. The loading dock was capable of handling a dozen trucks and the railroad spur line offered rail ship capability. There were six trucks bearing the Plymouth name parked at the dock.
As soon as we got back to Mr. Lemmon's office I said, "What did you tell your crews when you furloughed them?"
"I told them that we were closing down for a short time while we arranged to sell the plant. We said that they would almost certainly be rehired by the new owners as soon as the transfer had been completed, whether it was South-Core or someone else."
"True enough, if there was work. But without customers, there won't be any work."
"That's the dilemma that's faced us for the past few months. You still have your customers, however, so this plant will provide for growth."
"We just brought our Greenfield plant back on line after completely overhauling all of the paper production equipment, and we're only using 50 percent of our new capacity. Your new equipment here is substantially faster than the equipment that we have at either of the other two plants so purchasing this plant would increase our capacity by roughly another 80 percent again. The truth is that we just don't need the capacity as much as we need customers. Our Danbury plant was purchased because it came with an existing customer base. You were honest with me so I'm being honest with you."
There was silence all around the table. It wasn't what Mr. Lemmon wanted to hear. "Then you're not interested?"
"I was hoping that the situation would be better than reports indicated. Unfortunately, it doesn't appear to be. I know from the records that your original loan amount for the modernization was seven million. What's the current balance on the loan?"
"Our modernization cost was almost nine million. We owe…" Mr. Lemmon paused while he opened a folder and scanned a column of numbers, "$6,489,193 on the loan, as of Monday."
"What's the total liability picture?"
"$6,841,628 as of Monday. Here's the numbers." He slid the folder over to me. I opened it, examined the pages, and then passed it to Bob who in turn passed it to Bill after he had glanced at it.
"Mr. Lemmon, I wish that I had a need for your plant because it would be nice to add a modern plant with high-speed equipment that was all ready to go to work. Unfortunately, I don't." I saw his face change subtly as hope seemed to drain out of it. "However, you did catch us while we're in a good cash position. We might be able to operate the plant at a loss for a short time while we try to find enough new customers to get it paying its own way again. I'm prepared to offer you half a million dollars for full title, and assume all of the company's obligations up to the amounts specified in the reports that you shown us."
Mr. Lemmon was quiet for a few seconds, then said, "It's not as much as I would like, but it's more than I was expecting after our discussion. It's a deal. You've just added another plant to Piermont's operation."
I took out a Letter of Intent that I had brought and filled it out with the numbers that we had discussed, and appended the statements that Mr. Lemmon had prepared.
After we were done with the signing I said, "Thank you, Mr. Lemmon. I'm sorry that I couldn't offer you more."
"I'm satisfied, Miss Drake. It's actually five times more than South-Core was offering me. I'm going to enjoy telling them that the plant has been sold to Piermont. That's worth a lot all by itself."
"I'm glad that you're satisfied. We should be able to complete the transfer next week. Will you and Mr. Slater be available to help with the transition through the end of next week?"
"I'll be glad to remain until then. Mr. Slater will stay as long as you need him because he's on the payroll. I'm sure that he's anxious to continue his employment with Plymouth, or rather Piermont."
"Very good. Then welcome aboard Mr. Slater."
"Thank you, Miss Drake. I'm happy to be aboard."
"Mr. Lemmon, we'll have some people here tomorrow morning to begin preparing the inventory lists that will be needed for the transfer."
"Okay, Miss Drake, I'll be expecting them."
Mr. Lemmon walked us to the door and we shook hands before leaving. We hadn't eaten lunch and it was after 3 pm so we stopped at a restaurant on the way back. During the meal, and for the entire trip as well, we worked on finding a solution of what do with the excess capacity that we were going to have as a result of adding the new plant. We even talked about producing different paper products such as wrapping papers and tissue paper. By the time that we arrived back at Brandon, it was after 6 o'clock, so we called it a day.
I wasn't hungry when I returned to the hotel because we had eaten so late, so I skipped dinner. I stayed up listening to the radio and trying to figure out what we were going to do with the new plant, until bedtime. When I turned off the light I still hadn't come up with a solution to the problem. I hoped that this wouldn't turn out to be one of the blunders that I had spoken about a few months ago after my success with Greenfield. The payments on the six and a half million dollar note would slowly drag down the other plants unless we could get Concord paying its own way.
Early next morning, I learned that ten of our people, from Accounting, Personnel, Purchasing, Sales, Engineering, and Operations, had left for Concord right after the first shift started. We probably doubled the staff size of the plant for the day. They would spend the day poking and prying into records and files, along with compiling a basic inventory of plant equipment, supplies on hand, and finished product in the warehouse. We should have reports in time for the weekly meeting tomorrow.
I spent some time looking through old magazines that I retrieved from Peter's office as I still tried to come up with an idea of how to use the excess capacity that we would have since we weren't getting any customer accounts along with the purchase. Except for Glens Falls, each of the other factories was still in operation and had come with an existing customer base that we could then work on expanding.
I finished up the morning by compiling a general list of every paper product that we could produce using the new plant. As I ate the simple lunch that I prepared for myself in the kitchen, I went through the list, striking off the ones that I didn't feel provided a viable solution.
At 1 o'clock I left the building and found James waiting with the limo as arranged. An hour later we arrived at the Glens Falls plant. The changes were immediately noticeable; even before entering the building. The grass had been cut and the garbage that littered the grounds had been removed. A new sign bearing the Piermont name replaced the former North Country sign.
The change in the office was noticeable also. The clutter had been removed and a business-like atmosphere restored. As soon as I entered, the receptionist addressed me.
"Good afternoon, Miss Drake."
I recognized her as being from the pool at Brandon. "Good afternoon, Dorothy. I wasn't aware that you're working down here."
She smiled when I greeted her by name. "It's a temporary assignment. It's not much more of a drive to here than it is to Brandon, so Mr. Phillips asked me to fill in here until he finds a permanent receptionist."
"I see. How do like being here?"
"It's not too bad. Things are a lot slower, and I miss sitting with the girls at lunchtime. There's only me and Sharon here."
Sharon was the file clerk responsible for timekeeping and payroll matters, in addition to order processing and invoicing work.
"Well, I'm sure that Mr. Phillips won't leave you down here any longer than necessary. Is Mr. Smith in?"
"Yes, ma'am. He's in the factory. Shall I page him?"
"No, that's not necessary. I'll take a walk back there."
"Okay, Miss Drake."
I walked down the hallway that led to the factory part of the building and found my way to the shop floor. While not coming close to the activity of our other plants, the factory was nevertheless busy. About half of the machines were in operation. I saw one of the engineers from Brandon working on a piece of equipment while Otto Smith and Ed Tivollo helped. I stood back and watched for a few minutes until Ed looked and saw me.
"DD, welcome back," Ed said.
"Thank you, Ed. Hi Otto, how's it going?"
"Fine, Miss Drake. I wasn't expecting you."
"I just wanted to drop by and see how things are going." I looked at the engineer and said, "Hello, Scott. Having troubles?"
The engineer looked shocked to be addressed and probably wondered how I knew his name. "Uh… no real problems, Miss Drake. Just a malfunctioning sensor switch. We'll have it replaced and be back in operation within the hour."
"Fine, don't let me keep you from your work."
"Uh… yes, ma'am."
Otto and Ed were, by this time, both trying to clean the dirt from their hands. I hoped that Scott could carry on alone because it was obvious that they intended to accompany me on my tour.
With their hands clean, we began a tour of the plant, talking as we went. Otto explained what was going on at various points and told me what customer the corrugated boxes were being produced for. We ended up at the loading dock where a truck bearing the Piermont name was being loaded. It wasn't a tractor-trailer, but was rather a long box van like the biggest trucks that the truck rental companies rent to people who prefer to move their households by themselves.
"Otto, where do we get the brown paper that we use to make the corrugated cardboard?"
"From a mill in Maine, Miss Drake. Neither Brandon nor Greenfield is set up to manufacture that kind of paper."
"We've just acquired a plant in New Hampshire that produces Kraft paper. They should be able to provide for our needs here in the future. I'm sure that Tom Harris will see that all new orders come from there."
After the tour we returned to Otto's, formerly Ed's, office. Dorothy had made fresh coffee and tea, so we enjoyed a cup as we talked about the business.
"The folks from Sales have been doing a great job. We picked up a major new account this week; a toy manufacturer near Schenectady. We're going to be making all of their corrugated boxes here, and their cardboard boxes in Greenfield. The new contract should use up the remaining capacity of our one shift. We'll have to consider going to a second shift if we get any more new work."
"That's great news, Otto."
"I wish that I'd had your marketing capability when I owned the plant," Ed said.
"Marketing is an important component to be sure, and the first component to be celebrated or mourned. But it's no more important than manufacturing, maintenance, and management. Losing any one of the four M's can lead to a company's downfall, but marketing is the most difficult to control usually."
"DD, if we do have to go to a second shift, I'd like to recommend Ed for the job of Shift Supervisor."
I had been thinking about Ed ever since Bob had jokingly commented that we'd have to put him on the payroll.
"That might be difficult, Otto. Ed isn't even on the payroll. The men might resent someone being brought in from outside to be a supervisor."
"That wouldn't be a problem. They already think that Ed's on the payroll. We figured that it was easier to let them think it since Ed's been here every day since we took over. Besides, almost half them are Ed's boys from when he ran the company."
"How do you feel about that, Ed?"
"I'd be grateful for the opportunity, DD."
"You understand that you'll have to take orders from Otto, who takes orders from Brandon. You'd be a supervisor, but not the boss."
"I realize that, and I accept it. I know the job and the equipment." He smiled. "As long as I don't have to try to sell anything, I can handle it."
"Okay, Ed. When the time arrives to add a second shift, you have the job if you're still interested."
"I will be, DD. And at the rate you're going, it won't be long. You don't mind me hanging around, helping out until then, do you?"
"Not if Otto doesn't mind. He's the Plant Manager."
"I don't mind," Otto said. "Ed's been incredibly helpful in getting us going. He knows the equipment as well as any equipment engineer. I've appreciated his help."
"There's your answer, Ed. Well, it's about time for me to go. Thank you for the tea and your time. Otto, keep up the good work. Ed, thanks for your help with the transition and afterwards. I'll tell Mr. Phillips that he doesn't have to search for a second shift supervisor when the time arrives."
"Thank you, DD," Otto said.
"Yes, thank you, for everything," Ed added.
I said good-bye to them, and to Dorothy as I left.
It was after 5 when we got back to Vermont, so we didn't return to the plant. I spent another night thinking about the new acquisition and what we were going to do with it.
Our regular Friday meeting began at 10 o'clock the next morning. I opened with a statement.
"Good morning and welcome. By now everyone knows that we have purchased a new plant. Let's go through the status reports, leaving out all mention of the Concord plant, then we'll devote as much time to Concord as we can."
I started the reporting around the table. There wasn't much to report except for a problem by Mike Turbill. Usually Mike just said that everything was fine.
"We just got a new contract for boxes from a company over in New York. It's a lucrative deal but we can't deliver."
"What's the problem," I asked?
"Up until now we've only offered single-color printing on boxes. The new contract calls for four-color printing on the boxes to be produced by Greenfield. Our equipment can't handle it."
"What options do we have?"
"We asked the company if we can have pictures printed up and glue them on the boxes, but they refused. They want it printed right on the box. So we either have to buy the equipment, or farm the job out. If we farm the job out, we'll about break even. If we buy the equipment, we make a decent return on the work which can be applied to the cost of the equipment, plus we'll be able to seek out other work that Greenfield has had to refuse in the past."
"What's the cost of the new equipment?"
Tom Harris, in his role as Purchasing Director answered. "John and I looked into it. It varies between $50,000 and $300,000 depending on the features, speed, flexibility, quality, etc."
"That's quite a range."
"Yes. $50,000 will get the job done, but it's limited as to the size that it can produce. It can make the sizes that we need right now for the games, but not much larger. For $200,000 we can get equipment that we estimate will handle about 95% of the jobs that we might encounter. The remaining 5 percent could be farmed out if we want to take on every job that comes our way."
"How long will it take for it to pay for itself?"
"One to three years depending on orders. We think that this is the direction that the industry is taking. Four-color printed boxes are starting to be seen more and more. We'll need to upgrade the equipment we have if we want to stay current with demand."
"How large is it and where would the equipment be placed?"
Mike answered. "It's large. We could put it in the area that's been used as a warehouse for completed boxes in Greenfield. Once that space is emptied, we'll have enough room for it. We'll remove the wood partition that separated the warehouse space from the rest of the boxing equipment."
"It will take the entire space?"
Mike nodded and said, "Pretty much."
"That's big. Will we be able to get it in there?"
"Yes. There's an overhead door at the back of the warehouse space that's been hidden by shelving units. It's large enough to accommodate the dismantled equipment the way that it's shipped."
"How long will it take to get it in and set it up?"
"The company says that it will ship within 90 days. Then it could take up to a month to get it online and get the operators trained."
"How soon does the contract call for us to start making deliveries of the boxes?"
"July 1st. We'll have no choice but to have the first part of the order printed by someone else."
"Okay, let's do it. Tom, place the order. Let John and Mike determine the optional equipment and features. We'll go with the $200,000 unit. That sounds like the optimal solution. Get some quotes for farming out the work temporarily and Bob will make the decision. Is there any problem with the corrugated box order?"
"No, ma'am. Just standard black ink printing on that."
"Okay, thank you, Mike. Now, let's move on to the Concord plant."
Bob gave a report on the condition of the plant and the equipment, followed by reports from each of the others. All seven had had at least one person in the group that went to Concord yesterday. By the time that the reports were completed we had an in-depth understanding of the situation down there. We took a quick break since we had been at it for two hours, and then reconvened to continue.
"Okay," I said, "thank you for the reports. So now that we all know the situation, what do we do about it? With the acquisition of the Concord plant we are now using less than 28 percent of our paper manufacturing capacity. First, how do we get the Concord plant paying its own way, and second, how do we make it start showing a decent profit?"
Matt spoke up first. "Let's dump the finished inventory. South-Core must have enticed most of Plymouth's customer's away with discounts. I checked the records that were brought back and figured that we pulled about 20 percent away, but they were all our customers before the problems here so they were only returning to their previous supplier. Somehow, South-Core attracted the rest. I'd say that purchasing agent-salesman relations were part of it, but I'd be willing to bet that they gave some healthy discounts to insure that the companies came over. Let's do the same thing to them."
"You want to start a price war with South-Core," I asked.
"No. South-Core's too big. They'd easily outlast us and bury us. What I'm suggesting is that we call up Plymouth's former customers and offer them the excess inventory that we have in Plymouth's warehouse at a reduced price. We'll make it clear that the discount is only until the inventory is exhausted, and we don't warehouse it for them. We ship as soon as it's ordered. That means that the big publishers will have to order every week to keep their small warehouses full. If they get in the habit of ordering from us for a few weeks, and we have a chance to build our own sales relationship, maybe we'll keep them as customers. I'll handle all of those accounts personally."
"How long can we supply them from the inventory in the warehouse?"
"Indefinitely. Just like the businesses that have 'going out of business' sales, and then keep bringing in new merchandise during the sale. No one has to know that the paper was made after the order is placed. We'll keep it up until we think that we have a chance of keeping part of the business. If South-Core hears that we're only clearing the warehouse, they may decide to ride it out without cutting prices. Even if they match us, we still have a chance of getting some of Plymouth's business back before they can react."
We talked about Matt's idea and everyone seemed to like it so I approved it.
"Okay," I said, "that may help us get things rolling. What else can we do? With the purchase of Greenfield, Danbury, and Glens Falls, we've become our own best customer for paper and paperboard. Glens Falls can start getting its brown paper from Concord now. Is there something else we can produce that will fit in with our product offerings?"
"How about what we discussed the other day," John Fahey said.
"Which was?"
"We discussed making wrapping paper."
"Wrapping paper requires an entire printing operation. I don't think that we can afford the equipment right now. Any other ideas that won't requires expenditures for new equipment?"
Nobody offered anything.
"I didn't mean gift wrapping paper," John said.
"What did you mean, John?"
"Well… when I go into a store they have small rolls of paper used to wrap things at the counter. We could produce that. Also, they use pre-cut squares at the butcher shop. Most use brown paper and some use white. It's just a waxed paper and we have the ability to produce it."
"How come we haven't offered it before?"
"We haven't been able to produce the brown paper, and the size of the white paper market didn't justify the investment in equipment for the final step."
"What step?"
"We need to cut the squares and package them. For the small rolls, we would need to load them from full size rolls."
"How much would the extra equipment cost?"
"About $22,000 for both pieces."
"Okay, that's one possibility. Anything that we can do that won't require any new equipment?"
Nobody offered anything.
"Okay, any other ideas for producing anything that will only require a modest investment?"
"Note pads?" Bill Marshall said.
"What would we need for that?"
"Some kind of binding equipment. Most notepads are just glued on the end, but some are stitched in the center, or punched and bound with a spiral wire.
"Okay. That would fit in with our catalog of items. Anything else?"
"Bags?" Tom Harris offered.
"What kind of bags?"
"You know, grocery bags, big bags or smaller bags that stores use for selling stuff like fruit or hardware. How about plain brown lunch bags, or white bags?"
"What would we need?" I asked.
"A machine that cuts the paper, forms the bag, and glues it together."
"Do you know how much money we're talking about, Tom?" I asked.
"Not off-hand. Like the other pieces of equipment it depends on flexibility, and options. I know that the machines are a lot smaller then the boxing machine that we spoke of before. One would fit in this conference area. And they operate from rolls of paper."
"Where would we put them?"
"Once we sell off some of the Concord inventory we could put that operation in the warehouse."
"How about the offices?" Bob offered.
"The offices at Plymouth?"
"There, or at Greenfield. The plants are only 90 minutes apart. Both have an excess of office space with us having taken over most of that activity. If the machines aren't too big, we can put them in there. Unlike Brandon, with a separate office building, the offices there are just a subdivided part of the plant. We'll just move the soundproofed walls in closer to the office space that we want to keep and open up the rest."
"Good suggestion, Bob. Let's plan on that regardless of what else we do. We certainly don't need all that space devoted to empty offices. While we're at it, we're going to need more office equipment here to accommodate our growing managerial functions. I've noticed that our newest employees are using some of the ancient furniture from the basement storeroom. We'll leave a couple of spare desks and chairs at each place, but let's plan on moving all of the excess office equipment from Concord, Greenfield, and Glens Falls. We can store it here in the basement with the rest of the excess office equipment until we need it. Mike, I'll leave that task with you."
"Okay, DD. What about things like typewriters, adding machines, and other office equipment."
"Co-ordinate with the managers of each location. Leave them a couple of extra pieces of anything they want. They can always get more when they need it from what we'll have stored here.
Lunch arrived and we stopped temporarily to eat, although we continued to talk all through the meal. Tom went to his office at one point and returned with several brochures showing bag-making equipment. The possibilities for different types of bags was more than I had expected and I began to learn new terminology about bag making. The bagging operation idea seemed to grab everyone's imagination and we spent a lot more time kicking around ideas about that, and other matters about the new Plant. We didn't wind down until almost 5 pm.
Afterwards I helped Nancy scrape the dishes and put them in the dishwasher so that they could be returned to the B&B on Monday. When we were done, Nancy left and I called James and told him that I was ready to leave.
On Saturday I asked James to take me to Massachusetts. The reason for the trip was ostensibly to see the property that we were trying to sell, but really I just wanted to go for a ride because it was such a nice day. We found the 45-acre plot and I got out and walked around the property. As Bob had said, the view from the highway was great. It looked like a great spot for roadside services. After I was done there I had James take me to the Greenfield plant. There didn't appear to be anyone there but I didn't intend to go inside anyway. I just wanted to walk the grounds. I spotted the outside door where the new box printing equipment would be brought in. It looked like there may have been a loading dock there at one time. Then I walked out into the fields behind the plant. I didn't know where the property boundaries were but since the plant sat on 160 acres, I was sure that I never trespassed on anyone else's property. The area was wildly overgrown but I didn't see any trees that appeared older than twenty years so it must have been cleared at one time. Possibly as farm land.
As I was walking back to the car I saw Eric Grunen coming towards me.
As we got closer I said, "Hi Eric. How are you?"
"I'm fine, DD. Did you want to get into the plant?"
"No. I just wanted to walk around the back lot. What are you doing here?"
"I got a call from a passerby who saw the limo in front of the building."
"Don't we have a real security patrol here?"
"We don't have many problems down here."
"Still, we have a huge investment in equipment that could be destroyed easily by fire or vandalism. I'm going to ask Bob to set up a security system here."
"If you say so, DD."
We walked back to the cars. I told Eric about the decision to get the box printing equipment.
"That's great, DD. The old man was talking about that before he died. The three clowns couldn't have cared less."
"Well it's going to become a reality in the next few months. You'll have to make sure that the box warehouse space is cleared out within 30 days so that they can start preparing the space next month."
"No problem. We expect to have it done within two weeks."
I said good bye to Eric and got back into the limo. I asked James to take us to the Concord plant and timed the drive. It took just over 90 minutes. Like Greenfield, everything was quiet here. We didn't bother to stop; I just asked James to take us back to the hotel.
On Sunday, I hung around the pool and swam or read from the book that talked about box making machines with sophisticated printing capability. If I finished that I had another which told about making bags.
Monday morning found me wishing that I had gone home on Friday. Not because of the pressure, but because of the boredom. If I was home I could go riding, do some baking, or just sit and talk to Mother, Rosa, or even Ricardo. Coming to Vermont had stopped being fun, and had turned into work. When I was involved in buying a company, I felt that I had purpose and could throw myself into the task at hand. But afterwards, the excitement of the 'chase' quickly gave way to something else. I absolutely had to find a way to occupy my mind in between purchases because I couldn't keep buying failing companies every week.
After having a cup of tea I went for a walk. The tunnel in the yard had been completed. Half wasn't covered over yet because the concrete had to set properly. Work was progressing rapidly where the tunnel was connected to the office building and the plant. The work for the new cafeteria was also progressing rapidly. The area had been suited to its purpose so it was largely just a matter of upgrading the electrical service, bringing in the gas lines for cooking, installing plumbing for sinks, installing the counters, and bringing in the cooking and refrigeration equipment.
Except for the employees of the construction company, I knew everyone that I saw and greeted them by name when the sound level permitted. Activity in the two plants was high. I hoped that we could get enough orders to see this kind of activity at the Concord plant before the end of this year. One shift of full activity would mean that the plant was profitable. As always, I ended up on the loading dock. All of the bays were full and all six forklifts were actively loading the trailers. I didn't see Mike so I didn't hang around for long.
I didn't have anything to do once I returned to my office, so I put on the radio and got comfortable on my couch with some older trade magazines that I had gotten from Peter's office. Bob stopped in around 11 to discuss the financing for the Concord purchase. We had enough in our accounts to pay Mr. Lemmon and clear up the outstanding debts except for the large note. Because our bank offered us better terms, we would convert the note over during the next couple of months once other matters were settled, unless the bank that held the note cared to modify the interest rate. Portland was working on the contract for the sale and would send it as soon as it was ready. Bill Marshall was busy verifying the financial information. His people were already boxing up records so that they could be transported back here for assimilation. One of Bob's assistants had been temporarily assigned as liaison to the Concord plant. He would be there everyday to coordinate activity between us and the few remaining Concord employees until Ben Phillips began re-staffing efforts. Until we were ready to restart operations, only a few office employees would be needed to answer phones and the like.
After Bob left I returned to my reading. I began to get a better feel for the industry by going through the magazines. The names of key figures appeared often. Mostly they were the heads of the largest paper companies in the U.S. I saw lots of comments about Alliance Paper International and remembered the pictures and speculations about Ameri-Moore buying them after I was seen leaving a restaurant in Portland at the same time as some of their key executives. Alliance Paper International was way out of Piermont's league and even well above South-Core's.
The rest of the week was about the same. I arrived at the office every morning and spent most of the day reading. I usually ate lunch on the deck but I didn't want to be seen out there too much lest the employees see me and assume that I never did anything, while they were sweating in the plant.
During the week I worked on a project that was overdue. I had asked Ron Collins to come up from Danbury and he, Bob, and I spent some time together talking. I also arranged to have all of the books and magazines moved out of Peter's office and put into the large walk-in closet in my outer office. The cleaning people were instructed to give the office a good cleaning.
The only other interruption to the routine was on Thursday when we traveled to Concord in the afternoon to complete the transfer of the plant.
On Friday we held our regular weekly meeting. I announced that we had completed the buyout of Concord and asked for status reports. Bob gave an accounting of the Concord purchase and transfer, supported by similar statements by Bill Marshall and the others regarding their involvement and activities. Matt Piermont talked about trying to get some of the customers back.
"I've called up all of the customers who were buying from Plymouth Paper for one year prior to the time that we've determined that Plymouth's problems began. Some were out of business or merged with other companies, and we skipped over everyone that is already buying from us. I offered the products that we discussed, at a 20 percent discount, stressing that it was limited to excess inventory only and that orders must call for immediate shipment. A couple couldn't get their orders in fast enough and a couple tried everything they could to buy more than they could take right now and have us warehouse the rest. I stuck by my guns and told them to continue calling in orders when they needed more. I told them that as long as they spoke to me, I would sell to them as the discounted price for as long as inventory remained. I reminded them that we had an entire warehouse to clear.
Bottom line is that we've got orders from 42 customers so far, and they'll be taking about 20 percent of the finished product, for a total of about $80,000. That's not bad considering that they weren't looking for product. We start shipping on Monday. Ben has recalled half a dozen warehouse people including the dock manager. Once we've sold 70 percent of the finished inventory, I recommend recalling enough people to get the Kraft paper equipment operating again. By then we'll know what South-Core's response is going to be and how much longer we should continue with the discounts."
"I keep wondering," I said, "when South-Core is going to come after us."
"I don't think that they will," Bob said. "We've always had a solid financial position so they didn't try to sabotage us by trying to get to our employees when we first started up. Our employees here are happy with their jobs, and everyone knows what happened to the disloyal Sales people. They're actually shunned in the community because of the out-of-work time that they caused for other factory employees. And nobody wants to be included in that group by being disloyal to Piermont now. By not rehiring the salespeople you sent a very clear message to our employees that they might as well be prepared to move out of the region if they ever did anything that like that. South-Core can't hire away our sales-team this time unless they're going to take full responsibility for moving them and their families to one of their sales office locations.
"Also, we've gotten too big to be an easy target for South-Core. They like to attack single plant operations that have maximized their debt. Our debt is easily manageable, and we're far too diversified now. They can't steal all of our customers because they don't manufacture all of our products. I'm not saying that they won't try to pull some tricks that will hurt us, but I don't expect a concentrated attack designed to take over any of our plants. Our aggressive pricing on the excess inventory may result in retaliatory price cuts, but that would really be to their detriment because they would have to offer them to all of their customers."
"What about our other customers? Aren't they going to be angry if they hear that we've been selling at a discount without offering the same price to them?"
"My response will be that the offer only applied to excess inventory that we acquired in the buyout," Matt said, "and that it was offered to the previous loyal customers of Plymouth as part of out buyout arrangements. We don't have to say that it was not stipulated by the former owner, and that the arrangements were decided at this table. If anyone seems angry, I'll offer them an opportunity for a one time purchase at the same price if they promise not to tell anyone. I'm the only one making the deals. The rest of my crew only works from the price lists."
"Okay, Matt. Thank you. Bob, how are we doing with the four-color printing situation?"
"We've made arrangements to have the work performed by another firm until we're able to take over. There's a performance clause in the contract that carries stiff penalties for failure to meet specified output levels. Our cost is actually 3 percent above what we will be collecting so we want to get the new equipment in place as soon as possible. Tom?"
"The order for the equipment has been placed," Tom Harris said, "and the company has promised us a ship date of less than sixty days. We have all of the specifications, and the area in Greenfield will be prepped and ready to receive the equipment as soon as it arrives. Supplies will be ordered and waiting, and two operators have been selected to attend the manufacturer's next training session in a few weeks. As part of the purchase price, we get a company representative for one week to get the machine running and adjusted properly."
"Good job. Do we have any information on the wrapping paper, binding equipment, and bag making equipment that we discussed last week?"
Tom Harris had brought in number of sales brochures and we spent the next hour discussing the equipment and products that they could produce. When we had exhausted the subject, I thanked everyone and stood up to talk.
"I have an announcement to make. You've all worked tremendously hard over the past nine months. Piermont has grown very quickly, just ask South-Core if anyone doubts that, and I'm very proud of your efforts and accomplishments. As we have grown, so have your responsibilities. As a first step towards rewarding efforts, I want to announce that William Marshall is being appointed as Vice-President of Finance. Congratulations, Bill." I started the applauding and sat down so that Bill could stand up and speak.
I hadn't told Bill in advance, so it had caught him off guard, but despite that he was able to stand up and make a nice acceptance speech. Afterwards we broke up and everyone crowded around to shake his hand. When the congratulations ended, I said goodbye to everyone and they filed out. I had asked Bob and Bill to stay.
"Bill, Bob and I spoke to Ron this week. He'll be coming back to Brandon next week to take over your old job, which is what you had intended before you decided to stay with Piermont. You'll move into the office next to mine that used to belong to Matt's son Peter. Don't be angry with Ron for not telling you about the promotion. I told him not to say anything. Of course, along with the promotion comes a significant increase in salary."
Bob was still all smiles. "Thank you, DD. Thank you, Bob. I appreciate the opportunity that has been given to me to be a part of this team."
"You've earned everything that you've gotten Bill."
"I feel a little guilty about accepting this job. Tom, Ben, Matt, John, and Mike have worked really hard also."
"As I said at the meeting, your promotion was only the first step in rewarding the team. There will be other promotions over the next few months. For right now we have to look at your department. It's grown tremendously as we have added new plants, and as they have become more productive. It's about time that we looked at its structure to see if we should create some new mid-level supervisory positions. You and Ron can start working on that next week. As far as positions at the top, more promotions will be made. There's not much that I can do for Ben or Tom other than finding some nice gifts for them or giving bonuses since they're still officially attached to other divisions. We pay their salary indirectly by reimbursing the other divisions that send them their checks. Unless they request to be officially transferred, I can't change their job status. If you happen to be talking to them socially, you might want to drop a suggestion. I can't say anything because I don't want to be accused of raiding another division's employment rolls."
"I understand. Thank you for the promotion, DD. I'll do my best to live up to your trust."
"I know you will, Bill. I'll see you in a few weeks."
After he left Bob stayed to talk for a few minutes. "Bill really deserved the promotion. He's worked harder than two men since we came here."
"I know. That's why I choose to move him up first. And I didn't want to diminish the importance of the announcement by making more than one promotion today. I'll make another at the next meeting that I attend."
"Who do you plan to promote next?"
"Matt, to Vice-President of Marketing."
"Good choice. He deserves it also."
"I'd like you to create some rewards for our employees as well. Let's set up some kind of an 'employee of the week' honor in each of the different areas. The groups to be selected from should be at least 15 people in size, and no more that 30 so that everyone has a good chance during the year. For smaller groups we can make it an 'employee of the month' award. For the winners on the first shift, we can get them a meal from the B&B on Friday's when we have them cater the weekly meetings, unless you have some other ideas. You can discuss it with Ben and the others if you wish."
"I'll give it some thought."
"I have to get going. I'll see you in a couple of weeks, Bob."
"Okay, DD. Have a good trip."
After calling to let the pilots know that I was on my way, I left to go to the plane.
I thanked James for driving me around while I was in Vermont and wished him a good trip back to West Virginia. As the plane lifted off, I sank back into the seat and thought about going home. Such a nice word, home.
We landed at the ranch just after dinner. Rosa warmed up some food for me as I told everyone about my trip.
"You bought another plant?" Susan said.
"Yes. It was another case like Piermont. South-Core had forced them against the wall and was squeezing them out. I paid the owner five times what South-Core was offering and we still got a modern plant with equipment only a year old at a bargain price. We got a twelve million-dollar plant for less than seven and a half. We just have to get it profitable again."
"How many more plants do you need?" Mary asked.
"This is it. At least for a while. We have too much excess capacity now. We need to expand our markets before I even think about acquiring another paper plant."
For the next hour we talked about all of the different uses of paper, and it's amazing just how many different products there are. Then we switched to talking about Mary and Susan's graduation ceremony the next day. Mary had prepared the speech that she was going to give as Hillock's valedictorian, and Susan had prepared hers as the school's Salutatorian. Each stood up and gave their speech while we listened. Both had done a wonderful job on her speech and neither hesitated nor flubbed a single line. I learned afterwards that Judy and I had missed the afternoon photo session with the cap and gowns. I fondly remembered Judy and my fooling around last year and couldn't wait to see the pictures that Mother had taken today.
It would have been nice to go for a ride in the morning after having been away for two weeks, but there wasn't time. But as was still our custom on weekends, when we were at the ranch, we enjoyed a communal bath in Auntie's enormous tub. At breakfast I wondered if Rosa knew about our bathing practice.
As soon as we were done eating we started getting dressed and ready for the graduation ceremonies. We had to be at Hillock by noon so we planned on leaving at ten. Judy, Mary, Susan, and I all dressed in our shortest mini-skirts. We had always had to wear the school uniforms while attending Hillock as students so this was quite a change. It was only a few minutes after ten that we began the descent to the ranch exit in Auntie's big Cadillac, and we arrived at Hillock by eleven.
I had only been away from Hillock for a year but it was great to come back again for this visit. I knew all of the students except for the newest girls, and most of them were very young. There would only be a few new girls in the higher classes. As we roamed around the campus, we kept meeting my former classmates and their families. Only a few of the girls from other than the graduating class were there, and then only when they had a sister or cousin graduating today. It was strange to think that most of the class graduating today was entering their tenth year when Mother tried to enroll me in sixth grade at Hillock.
Julia, the girl that had given me a hard time when I first entered Hillock, was graduating this year also. Susan and Mary had both told me that she had mellowed considerably. I had tried to become friends with her while I was a student at Hillock but at best we had achieved a cordial relationship. At my own graduation from Hillock she had surprised me by coming up to me and wishing me good luck, so when we happened to meet on the campus I went up to her and wished her all the best for the future. She surprised me again by hugging me and thanking me for being her friend. I was even more surprised when she said that she would be a freshman in Austin in September and hoped that I would help her get adjusted to the new school. I told her that I would do anything that I could to help her. She hugged me once again as we said good-bye and continued on with our stroll.
Susan was the first to speak. "That was so freaky. I didn't know that you and Julia were such good friends."
"I didn't either," I said. "I tried to be friends with her but she always pulled away. I think that she was afraid of you, Judy, and Mary since the first day of school when you confronted her in the hallway."
Mary giggled. "That was funny. She'd looked like she was going to shrivel up and die when Judy laid down the law."
"She never gave me a problem after that but I also couldn't get close. It wasn't until graduation last year that she actually talked to me."
"Freaky," Susan said again.
"Now, girls," Mother said, "Julia has made a move to be friends. She's growing up and showing a little maturity. Maybe it's time for you to forget past differences."
We all said, "Okay, Mother."
As noon approached, we walked to the athletic field area behind the gymnasium where the ceremonies would be held. Susan and Mary went inside the gym to put on their cap and gowns while the rest of us found seats in the audience area and waited. At 12:30 the graduating students filed out and took their seats in the front rows. The faculty and administration members who would be on the stage had led the way. Mary and Susan went up onto the stage also and took their seats. We listened to several speeches before Mary spoke, and then Susan followed with hers. Both Mary and Susan did a wonderful job, and didn't appear to be a bit nervous, but I knew how that worked. You can look calm on the outside and be quaking on the inside. When all of the speeches were done, the students filed up onto the stage to receive their empty certificate holders. Mrs. Milner made a few closing remarks after the last student had left the stage and then the ceremony was over.
The graduating class let out a chorus of screams as friendly pandemonium broke out for a few minutes. Parents, family, and friends mingled in with the graduates to join in the celebration. Since I had spent one term with this class, I knew everyone and joined in with the hugging and kissing. Judy had spent one term with them also, and felt a part of things as well. Slowly things settled down and groups began to fan out, and then began leaving the field.
Mother had been shooting pictures since we arrived and must have shot 5 rolls of film during the ceremony. With the pictures that she had shot yesterday she would be able to fill a small album.
As we began to leave the field we met Mrs. Milner and several faculty members. We stopped to talk to them and thank them for our time at Hillock Academy. They all said that it was a pleasure to have the Drake girls with them and invited us to come back and visit at any time. Mrs. Milner congratulated me on my recent business successes so I assume that they are still subscribing to Log Views. After twenty minutes of chatting we said our good-byes and closed another chapter in our lives. The Drake children were all college students now.
Rosa prepared a large 'graduation celebration' meal for dinner. As on New Year's Eve Mother opened a bottle of champagne and we all got a glass to toast the new graduates. The wine must have gone to our heads because by the end of the meal we were talking about having a ceremonial burning of Hillock Academy uniforms in the back yard. I don't think that we would really have gone through with it but Mother stopped our talk about it by bringing out the graduation presents for Mary and Susan.
The new clothes that each received put all thought of the uniforms out of our minds. After dinner we had a small fashion show as Susan and Mary showed off what they had received.
We spent Sunday preparing for our trip to France. We used the earlier part of the day to pack and then spent the rest of our time practicing with the French language records that Mother had bought for us before our last trip. We hadn't had very many occasions to use the language since our last trip so we were rusty, but after going through the entire set of records we began to reacquire the basic skills that we had developed. No one was going to mistake us for natives but we would at least be able to understand somewhat and make ourselves understood.
We were excited as we went to bed and we couldn't wait for the new day. I tossed restlessly for a while and then finally drifted off to sleep.
Monday morning was hectic as we made our final preparations to leave. With Rosa there to cook and Ricardo to care for the horses we were able to devote our time to our packing.
Grandma arrived with Charles, and her personal secretary, just before eleven a.m. and the plane touched down about five minutes later. We had moved our luggage out to the ramp in front of the hanger and the pilots loaded the cargo compartment while we said goodbye to Rosa and Ricardo. Mother gave Rosa some last minute instructions and we boarded the plane. We were rolling down the runway only minutes after we had settled into our seats and fastened our seatbelts.
Several hours later, we landed in Nova Scotia to top off the fuel tanks before embarking on the next leg of our trip that would take us over the Atlantic Ocean to Ireland for another refueling. It was during the very early morning hours, local time, when the plane landed in France near the Mediterranean Sea. Charles found the limo, sans driver, that had been arranged for, after we had gone through customs, and he drove us straight to the house. We took the same rooms that we had each used in the past. The house had been opened a week before by staff from the local management company that was retained to look after the property, and everything smelled fresh and clean. We had managed a little sleep on the plane but we were all still tired, so we changed into our night clothes and went to bed.
(continued in part 27)
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