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Texas Gal
Chapter Thirty It's Official!
"The court has decreed," Grandma continued, "with the consent of all parties, that effective immediately, I am the legal parent of Elizabeth and Katherine Fallon, known now by their wedded names of Elizabeth Drake and Katherine Bliss."
Mother and Auntie smiled but the rest of us were too stunned. Grandma wasn't adopting us, but was adopting Mother and Auntie. It took a few seconds but I collected myself, jumped up, and ran over to Grandma and gave her a big hug. Susan, Judy, and Mary quickly followed. Grandma smiled and tears started running down her cheeks, and that started us all crying. Mother and Auntie joined us and we all hugged, and kissed, and cried.
There were a lot of questions that we had, and after we had hugged and cried, we sat back down to talk about the adoption. I didn't even know that you could adopt another adult. Anyway, by adopting Mother and Auntie, we all legally became Grandma's family. She was my real grandmother now. It was wonderful.
Grandma stayed until almost ten o'clock and we all hugged and kissed again when she left for home. Charles was smiling widely as he carried out the pile of pies and cakes that we had made for him. We knew that he would share them with the others in Grandma's household, but also knew from past experience that he would eat most of it.
We spent a lot time reviewing for our final exams during the last week of the year, but we still found time for riding every day. On New Year's Eve we opened a bottle of Champagne and toasted the start of the New Year. We were each allowed to have a full glass of bubbly.
On January 3rd the plane arrived to take me to Vermont. Susan debated for a couple of days whether or not to come with me, and then decided to forgo the pleasure of a New England winter. I didn't really blame her. We had grown rather accustomed to the milder winters at home. If we had been going on a skiing holiday, it would have been different.
I arrived in Vermont around 5 p.m. local time. Earl was waiting for me when I stepped off the plane. The cold winter wind blasted me in the face and swirled around my legs and up my skirt. I pulled my coat closed as tightly as I could and hurried to the car, pulling the door closed quickly to preserve the warmth. I had only been out the cold for a few minutes and yet I felt chilled to the bone. Thankfully, the heater was blasting out hot air and I warmed up again almost as quickly.
When Earl had stored my bags in the trunk and gotten into the car, he told me that the wind chill was minus 44 degrees F according to the radio station. It felt it.
The manager of the Holiday Inn welcomed me back as I signed in. I said that it was nice to be back, although I could do without the severe cold. His response was that the temperature was supposed to rise substantially in the next few days, possibly reaching as high as the freezing point by Friday afternoon.
Although the weather was still sub zero the next morning, I was greeted warmly when I got to the office. Nancy had a pot of tea waiting for me, and I fixed a cup and stood staring out at the swirling snow and wind in the rear yard.
My phone rang and upon answering it I found that it was Bob Warren.
"Hi, boss. Welcome to the Santa's icebox."
"Thanks, Bob. Did you come by car or sled team today?"
He chuckled. "I managed to get the car started, thanks to the garage. There're a lot of frozen engines out there today. Are you busy?"
"No, come on in. Bring your coffee. All I have is tea."
A couple of minutes later he knocked and walked in.
"Merry Christmas and Happy New Year."
"Thanks, Bob. You also. How's everything going?"
"Great. Things couldn't be much better, but it's been getting a little dull. We've been anxiously awaiting your return."
"Don't expect much from me. I don't have anything planned."
"You say that every time you come, and then we wind up acquiring a new company."
"Not this time. I'm just going to relax and stare out the window at the pretty snow."
"Okay, boss. The money for the Owosso timberland and sawmill arrived via bank transfer from Ameri-Moore. We sent them the paperwork and they've taken over the properties."
"Good. We want to pay off our note with the bank right away. We should have more than enough to cover it now. Then we want to request that the bank increase our line of credit to 100 million."
"100 Million?" he said questioningly.
"Yes."
Smiling, he said, "Just sit back and look at the pretty snow, huh?"
"Yes, I just want to be prepared should something come up."
"Okay, boss. I'll wait until you're ready to tell me."
"There's nothing to tell, Bob," I protested. "How is everything going with the cafeteria?"
"Fantastic. The employees love it, and they sing your praises every time they use the warm and dry tunnel. The cafeteria is paying its own way, and should pay off its construction costs by the end of this new year."
"Great. Give me a rundown on the plants, please."
"Okay. Brandon is doing fine. Nothing has really changed since you returned to school. We're running two full shifts and shipping it as fast as we can make it.
"Greenfield is running two shifts now in the paper plant. The data processing forms sales are rising steadily, as is the demand from Danbury for more paper. The four-color box machine is getting more and more business. Our bigger customers loved the samples that Matt sent out and are willing to pay for the specialized boxes. We completed the removal of the partitions for the offices that we no longer use, and the space can be used to increase the boxing operation when we need it. We're running a small third shift now in boxing and will either have to keep putting on third shift personnel or add new machinery to increase the first and second shifts.
"Danbury is still ramping up the second shift. Sales are brisk thanks to the gorgeous catalogs that Matt puts out. They make you want to buy forms even if you don't need them.
"Glens Falls has the second shift going great guns. Ed Tivollo may be a lousy salesman but he's a terrific shift manager. John has them on a good maintenance program and the equipment is running fine.
"Concord is running two shifts on the Kraft Paper machine now, and one with bleached paper. We've gotten a lot of the old customers back. It seems that they just weren't happy dealing with South-Core. South-Core plays a lot of games with discount dates and such. The bagging process is picking up steam faster than a locomotive. Matt found some big grocery chains to buy bags, plus we're selling in small quantities through the catalog.
"The three plants in the Midwest Region are doing well. Gerard has told them about our production here and they seem determined not to be the weak link in the company. I think that the sales team in Owosso is trying to make sure that their jobs don't disappear. They've been bringing in new orders like never before. Gerard suggested that we hold off on any reductions there as long as they continue to produce like this and Matt agreed. We've got all three plants using our reporting forms and procedures, and most of the accounting functions from Owosso have been moved here to Brandon.
"I guess that's it."
"I know that we've completed the sale of the one parcel by the highway, any interest in the others?"
"We've had a few inquires, but no offers yet. A couple of the people called back a second time but then we didn't hear again."
"What's happening on the piece that we sold?"
"They're building a hamburger stand there. Something called a McDonalds."
"Let's hope that they're successful. It'll make the other parcels more valuable."
"True. They've gotten all the approvals and they'll start building as soon as the ground unfreezes."
"Okay. Thanks, Bob."
"I'll get started on the note repayment. How soon do you need the 100 million?"
I smiled. "I don't have any plans, Bob. We just want to be prepared if a good deal appears."
"Whatever you say, boss. We'll be ready if the bank approves the increase. Oh, by the way, thanks for the Christmas bonus. My wife put it away to use for our vacation this year. She wants to take the family to Hawaii."
"You're most welcome, Bob. You and the others really earned your bonuses."
After Bob left, I fixed another cup of tea and sat down on my sofa with some trade magazines, even though there were new employee pages to review, and four months worth of letters. I ignored them as long as I could, and then went back to my desk and worked on them. I went through all of the employee forms first. There were hundreds, with most being from the Midwest Region. It took me until almost 11 o'clock to look through them all. When I was done, I filed them away and turned to my next task, looking through the offers.
Following the system that I had developed, I separated the letters into two piles. All the very small businesses went into the rejection pile first. I didn't understand why so many people thought that we would be interested in tiny print shops or weekly newspapers that mostly sold classified space. Perhaps they were desperate.
When I had done the first cut, I brought the forms out to Nancy so she could start preparing the letters. There were over forty so it would take her a while. Instead of going back to my office, I took the elevator to the basement. It was a little before noon and I wanted to have a look at the cafeteria before the crowds came in, if crowds still came in.
There were already about two dozen people in the cafeteria when I walked in. I nodded to those that made eye contact as I walked to the food line. I took a tray and slid it along the stainless steel tubes that formed a counter along the front of the food serving area, taking a piece of cherry pie, and a small salad, then stopping at the hot food area. Today's special was roast beef. I got that, along with mashed potatoes, and corn nibblets. I slid along until I came to the cash register.
The woman at the cash register rang up the sale and said, "ID badge?"
I hadn't thought about how I was going to pay for it. My purse was upstairs in my office. "Sorry. I don't have one."
"That'll be $1.90 then."
"Uh- I left my wallet upstairs. I'll have to send someone down with it."
"I'm sorry. You can't take the food until it's paid for."
"I understand Beatrice, but we can't put it back now and I'm good for it."
She was startled that I knew her name. "Do I know you?"
"No, we've never met, but I know that you just started last week. I'm Darla Anne Drake."
"Oh, Miss Drake. I'm terribly sorry. I didn't know it was you. Of course it's okay for you to take the food."
"Thank you, Beatrice. I'll send my secretary down with the money later. Just make a note that I owe."
"Of course, Miss Drake."
I took the tray and carried it upstairs. Nancy saw me and said, "I would have gotten you food if I knew that you wanted it, Miss Drake."
"That's alright, Nancy. I wanted to see the new cafeteria in action. I forgot my money though. Would you bring $1.90 down to Beatrice later?"
"Of course."
"Thank you, Nancy."
I took the tray back to my office, confident that Nancy would take the money down to Beatrice using petty cash funds. I preferred to use the silverware in my kitchen to the silverware that was available in the cafeteria.
The food wasn't of the quality that we got from the B&B but it was tasty and was a lot better than bringing a cold sandwich from home. I began going through the other letters that rated a second glance as I ate.
By the time that I was done reading, I was also done eating. I washed the dishes and my silverware and put them in the dish rack to dry.
I sorted the remaining letters and proposals into two new piles. I was very surprised to see how far away the proposals were coming from now. Originally, they were only from New England. This latest batch had proposals from Canada, Europe, Brazil, and even Southeast Asia. I knew that we weren't ready for international operations so I put those letters in the reject pile.
I sat and looked at the pile of remaining letters. I didn't know why I was doing this. I didn't want to buy anything, but something was driving me to read through them anyway. I should just put them all in the reject pile and forget about it. Then I could sit and look out the window and watch the snow as I had told Bob. Instead I resumed working on them.
I narrowed the selection down to ten proposals and took a break by taking the additional rejects down to Nancy. She wasn't at her desk so I gave them to Caroline who was covering for her, and explained that they were rejects. I told her that Nancy would understand. I had paper-clipped them into groups with a brief note explaining why they were being rejected.
The proposals that were left included one from a company with four paper plants, two cardboard manufacturing plants, three sawmills, and extensive timberlands in Georgia, Tennessee, and North Carolina. This was by far the largest company that had approached us yet. The other proposals were from two companies that printed wrapping paper, a paper producer in Maine with two plants, a paper producer with one mill in New York, a formed paper products manufacturer in Pennsylvania, two companies that printed business forms, and two cardboard producers.
I used the bathroom and then fixed myself another cup of tea, all the time thinking about the proposals. We had just gotten our own operations healthy. A feat of no small measure and thanks to the hard work of my dedicated executives. Could I ask them to take on another failing business and turn it around? Did they really mean it when they said that they enjoyed the challenge, or were they simply acting like loyal employees?
In any event I couldn't buy them all so I began to eliminate companies. I moved the wrapping paper manufactures to the reject pile, followed by the formed paper products company, and the two cardboard producers.
That left the three paper manufacturers and the two printing companies. We currently had plenty of excess capacity at Danbury, so I added the two printing companies to the reject pile.
With just three proposals left in the folder, I closed it and set it aside. I left the reject pile in the center of my desk and went to sit on sofa, taking another trade magazine with me. Nancy came in about and hour later with the letters to be sent to the companies looking for a buyer. I signed them, so that she could send them out, and gave her the pile that I still had.
I read until six o'clock and then called Earl to tell him that I was ready to leave. He replied that he had warmed the car up already in anticipation of my call, and we could leave at any time. I said that I'd meet him out front in five minutes.
Nancy brought me the remainder of the reject letters in the morning and I signed them so that they could be sent out. Bob stopped in early to tell me that he had completed the transfer of funds to pay off the note. He also told me that he had requested that our line be increased to 100 million. The bank manager appeared surprised by the request, and said that it would be taken up at the next meeting of the loan committee. Bob said that if the bank refused our request, he knew of a couple of insurance companies that might lend us money.
"Bob, I told you that I don't have any plans to buy anything."
"How many of the proposals are you holding back from sending rejection letters?"
I hesitated for a few seconds. I didn't want him to think that I was going to buy more plants, but I didn't want to lie to Bob either. I answered. "Three."
He just nodded slightly.
"I haven't contacted any of the principals, or even asked Bill to look into their situations."
"I could do that for you. It wouldn't hurt to make a few discreet inquires. It doesn't mean that we're going to buy the properties."
I hesitated again for a couple of seconds. Bob seemed eager to do it, so I gave him the folder. He opened it and read the proposals while I sipped my tea.
"All paper producers. This one on the top, from Appalachian Paper, looks interesting. I've heard of them. I don't know anything about their paper plants but I know a fellow who managed one of their logging sites. He works for Ameri-Moore now. You know him also. In fact-- I think that you promoted him. Peter Sloan, Supervisor of West Coast Logging Operations."
"Mr. Sloan worked for Appalachian Paper?"
"Yeah, I think so. I could give him a call and check, if you like?"
"No, that won't be necessary. I haven't spoken to him in quite a while, and it will give me an excuse to call him. Thanks for the information."
"I don't know anything about these other two companies, but I will by tomorrow."
"Okay, Bob."
After he left I looked at my watch. It was just before 9 a.m. so I couldn't call Portland yet. I would have to wait until 11 o'clock, so I took my tea over to the window and looked out upon the winter scene for about five minutes and then returned to my desk.
I took a copy of the master plan that Susan and I had developed, and started reading through it. When I was finished, I saw that the only goal that we hadn't reached was the very long-term goal of getting a computer for the company. It seemed like a very long-term goal when we had one plant, but now that we had eight, it didn't seem like such a far-fetched idea.
I called Tom Harris, our Purchasing director, and asked him to come to my office.
"Good morning, DD."
"Good morning, Tom, please sit down. Tom, we've met all of the goals that we laid out in our original business plan, except one. We don't have a computer."
"That's an enormous undertaking, DD."
"I realize that. Any ideas on how we should go about starting the process?"
"I guess that the first thing to do is to hire a DP Manager and let him create an RFP, or Request For Proposal, to be sent out the computer companies. While that's going on, you hire a staff of programmers, and start writing the programs. When you make a decision on the proposals, and your equipment arrives, you're ready to start testing."
"That sounds reasonable. Where do we find a qualified DP Manager?"
"I don't have a clue, but Ben would."
"Okay, thanks Tom. Is Ben in?"
"Yes. I saw him earlier."
"Thanks, Tom."
After Tom left I called Ben Phillips, our Director of Personnel and asked him to come in. When he arrived, I told him what I was after and he said that he'd start looking for someone right away.
"What do you think the job title should be?"
"I guess that we'll start off with 'Data Processing Supervisor' and upgrade it as the department and responsibilities grow."
"Okay, DD. I'll get started on it."
"Thanks, Ben."
I checked the clock and saw that it was a little after 11 o'clock, so I called Portland. As soon as Mr. Sloan's secretary heard who was calling, she put me right through.
"Miss Darla?"
"Hi, Mr. Sloan. Yes, it's me."
"It's great to hear from you. I thought that you had forgotten about us up here."
"I haven't forgotten. I've just been real busy with the paper products division."
"I was just kidding. I know how busy you've been. We've been making plans to integrate the timberlands in Michigan and Wisconsin that you bought. Congratulations on your success with the new division."
"Thank you. How have things been going with you?"
"Wonderful, as you probably already know."
"I know that Mrs. Moore is very happy with your job performance."
"And I've been very happy with my job. I haven't forgotten that I owe it to you."
"You earned it all by yourself. I'm glad that you're happy in the position."
"I am. So, to what do I owe this phone call?"
"I was speaking with Bob Warren earlier and your name came up. It is true that you worked for Appalachian Paper?"
"Yes, about eight years ago. That was my last job before coming to Ameri-Moore."
"Can you tell me anything about them?"
"Sure, lots. What would you like to know?"
"Oh, anything about their corporate structure. Are they having financial problems?"
"I don't know anything about their current financial condition, but I didn't think that it was a place to build a career."
"Why not?"
"It's a family business, and I mean that in the worst possible way. The current management is the fourth generation to manage the company. The management team was made up of brothers, sisters, aunts, uncles, sons, daughters, nephews, nieces, and cousins. It seems like all they did was point fingers at one another and try to shift blame when problems came up. A lot of the management team didn't even make it into work before noon, and then left right after lunch. I guess it's understandable. They were born into a life of wealth and affluence, and they never had to work for a living, so it would be unreasonable to expect them to embrace a working career once they finished their schooling. As family members, they were just handed their management positions on a silver platter."
"Thomas Paine said, 'What we obtain too cheap, we esteem too lightly; it is the dearness only that gives everything value'."
"They certainly didn't value their jobs when I was there. Are you negotiating to buy one of their paper mills?"
"Not at this time, but they've sent me a proposal."
"Which one?"
"All of them, plus the sawmills, two cardboard plants, and their timberland."
"The entire company?"
"I guess so."
"Wow. They must be hurting. I thought that they might just be looking to sell off one of the plants to raise some cash."
"Do you still have any friends down there?"
"Yeah. I think that a few of my old buddies are still working there."
"Could you maybe give them a call and feel them out. Try to find out what the inside scoop is, but don't give them any hint of our real interest. You could tell them that Ameri-Moore just acquired large holdings in Michigan and Wisconsin and that you're looking for a few good men. See how they respond."
"Okay, Miss Darla. It may take a couple of days."
"That's no problem. I don't intend to move too quickly on this, if we even move at all."
"If you do this, you'll have to be prepared to replace ALL the management at ALL the plants and mills. If you don't sweep out all the relatives, you'll have a never ending river of problems."
"There aren't any that are worth keeping?"
"None that I'd care to have working for me. Of course I didn't know them all. I was just a lowly foreman at a logging camp. I knew some of them though, and the rest was rumor."
"I see. Thank you, Mr. Sloan."
"My pleasure, Miss Darla. I'll call you in a couple of days. Good-bye."
"Good-bye."
I replaced the handset on the cradle and thought about the call. I mentally estimated the number of manager and supervisor positions at a standard paper producing plant and at a sawmill. Extrapolating out, and adding in corporate positions, I arrived at a range of between fifty and seventy. I sat back in my chair. My executives here in Brandon could handle corporate management roles, but that would only reduce the needed replacements that I was estimating, by ten. Sixty management positions would be impossible to fill overnight, and since they were all key positions, the plant or mill wouldn't function properly without them. Taking the low figure of forty made the task seem a little more possible, but still difficult. It was also possible that Mr. Sloan's analysis was wrong. After all, he hadn't been with that company in years.
Since the Owosso plants were so new to me, I didn't know how many managers I could temporarily pull from there. The same was true of Concord, which was still gearing up. I could possibly get twenty people from Greenfield and Brandon, but that was a long way from sixty. It seemed an impossible hurdle.
There was little I could do about it right now, so I went back to work on the new master plan. I treated the data processing department as a real entity that would be developed over the next five years. It was impossible to predict the growth, given our growth over the past year. I knew that it couldn't continue like this, but I also had no idea on what our growth would be, so I limited myself to listing products that we would produce, including newsprint paper, that I had so far avoided. I also greatly expanded the types of Data Processing forms that we would produce. Danbury was capable of producing most forms that we needed, but its capacity was limited by its size. I included adding another large printing plant, or building one, into the plan.
I continued to work on the plan until it was time to go back to the Holiday Inn.
On Wednesday morning I resumed work on the new master plan. Bob called and asked to come over, so I put it aside. A few minutes later, he entered my office with Bill.
After we'd exchanged greetings, Bob said, "I've got some information on those companies. Bill gave me a hand by providing the current financial information from D&B. The situation with Appalachian Paper down south seems to be one of a very slow, but steady, decline. Each year's numbers are just a little lower than the previous year. About a point or two each year, and it's been going that way for 10 years. I've learned that the company is an old one. They opened their first sawmill back in 1898. Their newest plant is about 15 years old. As it says in their proposal, they own almost 200,000 acres, but they get much of their wood from independents. I guess that they're saving their own timber, for some reason. I learned that the matriarch of the family recently passed away, leaving the path open for the heirs to sell out. Unfortunately for the family, her will stipulates that any sale must only be to another paper company who will guarantee to use the land only for lumber harvesting and replanting. The old lady wanted to ensure that the timberland didn't get turned into vacation home lots. That means that the sale is limited to the thousand or so paper manufacturers in the world, but realistically, only about a hundred are even in the league to handle such a large buyout.
Next item. The plant in New York has been hanging on by their fingertips for years. They sell just enough paper to keep from having the books splashed monthly with red ink. Their equipment is old, and the plant is very run down.
Last item. The two plants in Maine are in excellent mechanical condition, but the word is that the owner is looking for top dollar and more. The asking price is twenty-two million. He's ready to retire and has had the mills on the market for almost a year. No one has heard of any offers being made yet. I'm surprised that he hasn't contacted you before now. There's one more thing. The mills produce newsprint."
"It doesn't sound like any of the deals are particularly appealing," I said. I told Bob what I had been told by Mr. Sloan, and my estimate of the positions needed to be filled in management.
"Wow, that puts a whole new wrinkle on the deal. I agree that sixty positions would be impossible to fill overnight. Forty might be possible, assuming that Gerard could come up with twenty people from the Midwest Region, and we could come up with the rest from the Northeast Region. But— there's another factor to be considered here. If the management is all family, and if they do, in fact, arrive late and leave early, then that means that it's the middle-management who are actually running the plants."
"The middle-management? You mean the job foremen?"
"Exactly. The supervisors of the specialized functions, such as chipping and pulping operations foremen, paper-forming machine foremen, warehouse foremen, shipping foremen. The people who actually get their hands dirty working right alongside the regular employees. They know that their jobs are on the line so they manage to work together to get the job done, even in the absence of higher ups. You can be sure that few, if any, family members are among their ranks, unless they're the 'outcasts' that have been given a place just to ease the conscious of the family hierarchy."
"So you're suggesting that a full management group could be created from the foremen?"
"That's where managers normally come from. At least outside family owned businesses. So if we buy Appalachian Paper, we could move our 40 people in temporarily, while we identify people within each plant that should be promoted."
"It's true that it's where managers come from, but it's usually a gradual process that gives the person time to learn and grow into the job. You're talking about dumping them into the positions like throwing someone into a lake to see if they can swim."
"It won't quite be that bad. We'll still be around to watch and guide them as they find their way. For the most part we're only talking about moving people up one level above their present job."
"This project would be a massive undertaking, Bob. It would probably require most of your attention for several months, and would involve a lot of traveling."
"The way that I look at it is that it would practically double the size of the company overnight. We'll have a few difficult months for sure, but it should be under control after that. Unless there's a precipitous drop in paper and lumber prices, which is highly unlikely, we'll be fine after the initial organization troubles are resolved."
"I'm only afraid that we might be biting off more than we can chew," I said.
"I never thought that I'd hear you say that."
"We've never taken on a project like this before. We don't even know if we can get the financing."
"Oh, I forgot to tell you. The bank called today to tell me that they've approved our increase. We can now draw up to 100 million for new acquisitions, so there's nothing holding us back from doing this deal."
I sat back in my chair. Until now this had been like an academic exercise. Since we hadn't had the money, it didn't even make sense to contact the company and go for a look. "The deciding factor then, would seem to be the price and whether or not the plants can make the loan payments on their own so as not to drag down the rest of the company. We haven't discussed price yet, but I would think that a ceiling would be 60 million. Based on what we learned about their situation, it's more likely going to be 40 to 50 million, but let's assume 60 just for argument's sake. Can Appalachian Paper net 4.8 million a year to pay the interest on the loan that we would need?"
Bill said, "Based on 4th quarter numbers, we should realize over 9 million net this year from the Northeast and Midwest Regions based on estimated sales. There should be enough left, after making the payments on the loans for Owosso, Ladysmith, Merrill, Concord, Danbury, and Glens Falls, to cover the payments for Appalachian Paper, even if it doesn't make a penny."
"How about if it loses money?"
"Well… as long as it doesn't lose more than 3 million per year, we'll probably be okay. Their financial statements indicate that they're still operating in the black, barely. They probably want to sell out before sinking, permanently, into the minus numbers."
"Okay," I said, "we suspect that we'd have replace one heck of a lot of people and try to rebuild the management structure. We can assume that with a 10-year decline in profits, that morale is extremely low. We can also assume that the equipment is not being maintained properly if they're trying to cut expenses. I realize that that's a lot of assumptions, but we've been down this road before, although not on this scale. If we do this deal, you two would bear the major burden for the reformation effort. You know what that means?"
"We do," Bob said, "and we're prepared for the burden if you approve the purchase."
I stared down at my desk for a minute while I considered Bob's words. "Then I guess that the next step is to contact Appalachian Paper and see if they want to meet with us? I'll request that we meet at their headquarters on Monday morning, so let's plan on flying down Sunday. Bob, call Gerard and find out if he can accompany us to Asheville. If he can, I'll have the plane pick him up in Owosso. There're nine facilities to inspect, plus the timberlands, so we could use the extra eyes. Ask him if he can bring his chief engineer. Bill, can Ron get away to join us?"
"I believe so, DD. I'll confirm that today."
"Bob, can you arrange for someone local to go look at the county records immediately, and do a thorough search for loans, liens, unpaid taxes, and whatever?"
"Will do."
"Okay, I'll call Appalachian Paper and arrange for a meeting. Thank you, both."
After they left I had Nancy place a call to the person who had sent the proposal, a Mr. Zachary Ian Thorehill, the Executive Vice-President for Appalachian.
Nancy rang me when she had him on the phone. He, at least, wasn't one of the ones that came in at noon since it was only 10 a.m.
"Good morning, Mr. Thorehill."
"Good Morning, Miss Drake. May I call you DD as they do in the press?"
"Yes, of course, Mr. Thorehill."
"Call me Ian, please."
"Okay, Ian. I received your proposal and I'm calling so that we might discuss it."
"Great. What would you like to know?"
"Well, first, I assume that the company is still being offered for sale?"
"Yes, absolutely. We've had one offer, but we turned it down."
"I see. Well, then I guess that I should come down to look at the plants before making any kind of an offer. How's Monday morning for you?"
"Fine. What time?"
"We'll fly in Sunday night and be at your headquarters at 8 a.m. Is that okay?"
"Fine. Is there anything that I can do in advance."
"Well, you could recommend a good place to stay in your city."
"The Southern Comfort Hotel. It's only a few blocks away and it's the finest in the city."
"Okay, we'll also need transportation to the timberland sites from the nearest airports. Hopefully in a Jeep so that we can get a close look at the trees and land."
"I'll arrange that."
"And we'll also need access to your books. I'll be accompanied by two accountants who are a part of my evaluation team."
"Team?"
"Yes, there will be about 8 of us. Given the number of facilities to look over, we'll be able to wrap it up more quickly this way."
"Fine, I'll look forward to meeting you on Monday then."
"Okay, Ian. We'll see you then."
I called Bill and told him that we were set for leaving on Sunday afternoon, and we'd stop in Owosso to pick up Gerard and his engineer. Then I swiveled my chair around to stare at the snow-capped mountains of Vermont and wonder if I was making the right decision. I usually felt so confident when buying, but this time I was nervous. I couldn't quite put my finger on it. I guess that I felt as though I was getting in over my head."
I worked on the business plan on Thursday. I realized things might change dramatically if we acquired Appalachian Paper, but I needed something to keep me busy and my mind occupied.
Just before noon Mr. Sloan called.
"Hi, Mr. Sloan."
"Good morning, Miss Darla. I wanted to let you know what I learned about Appalachian Paper."
"Something positive, I hope."
"I'll let you decide. The company sent out sales proposals to twenty of the larger paper producers. Only Alliance has responded so far. I learned that they made an offer of 28 million for the company. The family took a week to think it over before rejecting it."
"I see. Piermont isn't in the top twenty largest producers. I wonder why we were included? Any idea on what they'll settle for?"
"No, but the fact that they took a week to think it over might mean that the offer wasn't too far off. Or it might simply mean that the family is splintered on the amount that they'll accept. They probably sent you a proposal because of all the buying that you've done lately. I can't seem to pick up a trade magazine without seeing your name in it."
"Has the situation with family management changed?"
"No. Family members are still occupying all the top positions."
A thought suddenly occurred to me. "Mr. Sloan, did you leave Appalachian Paper under friendly circumstances?"
"Yes. The manager of the logging site there told me that I always had a job there if things didn't work out at Ameri-Moore."
"What are you doing next week?"
"Just the usual."
"Could you join us on the evaluation tour?"
"Me?"
"Yes. You know how to evaluate timberland, and you know the sites. I can't think of anyone better to value the land, and your division will probably end up with the land if we make the deal."
"You're right about me knowing the sites, and we will probably wind up with the land if you buy the company. Okay, I'll be there."
"I'll have my secretary make a reservation for you at the Southern Comfort Hotel. We're flying down on Sunday. If you want to fly into Chicago, we can pick you up."
"Thanks, but it'll be faster if I fly directly to Knoxville. I'll rent a small plane and fly over to Asheville. I'll need the plane to get around to the various timberland sites anyway, and I can do my initial inspection from the air."
"Okay, Mr. Sloan. We'll see you at the hotel on Sunday."
"Right, Miss Darla. See you then."
After lunch I sent letters to the two other companies that had sent proposals, thanking them and explaining that we weren't interested at this time. Then I worked on my notes for the regular Friday meeting.
We met at the hotel on Sunday and went to the airport. The plane was all ready to go and we headed west. Gerard and his chief engineer, Lenny Burke, were waiting for us, and as soon as they were aboard, we headed south to North Carolina. After exchanging greetings, we relaxed and talked about the procedures that we would follow.
We arrived at an airport a few miles south of Asheville a little after 7 p.m. We called for two cabs to take us to the hotel and waited on the plane until they arrived. After we got to the hotel, I sent one of the cabs back to pick up the pilots. They had wanted to refuel and secure the plane before leaving.
We had discussed our plan for tomorrow and eaten dinner on the plane, so we went to our rooms. The accommodations were very nice. I left a message for Mr. Sloan, who hadn't arrived yet, that we'd meet in the restaurant at 7 a.m. for breakfast.
We arrived at Appalachian Paper headquarters a few minutes before eight a.m., and Ian Thorehill came to the lobby to welcome us. After shaking hands all around with the men, he just stood and looked at me.
"Are you all right, Ian," I said.
He seemed to come out of his trance. "Yes… yes I am. I'm sorry for staring. It's just that I'm a little shocked. I mean I've read about you, but seeing you in person is quite different. And I thought that you were only thirteen."
"Not any more. I'm 14 now, and I'll be 15 in four months. And yes I do look a little older than my years. Most people say that I look about 17 now."
"I see. And I agree. I would have said about 17 or possibly even 18. It might be your demeanor as much as anything else that gives that impression."
I smiled. "My student advisor in college says that I'm 14 going on 40."
Ian chuckled politely and then showed us to a large conference room where at least a dozen people were waiting. I introduced my team and Ian introduced everyone else. I noticed that everyone from the company was a Thorehill or a Thorehill hyphen something.
After we had taken our seats, I said, "You understand that this is only a preliminary meeting prior to our beginning our assessment. We aren't prepared to make any offers today."
"We understand," Ian said. "I just felt that it would be best for you to meet the people that would be making the decision if you choose to tender an offer. Where would you like to begin?"
"Tell me about the history of your company, for say- the last eleven years."
"An interesting choice of years. You know, no doubt, that that was the last year that our company's profits increased."
I nodded once. Ian looked around at his family and then proceeded to give me a brief history. Everything that he said confirmed what we had already learned. One fact was clear, although unstated, 'They didn't know why profits continued to dip'.
"Thank you, Ian," I said when he had finished. "I think that we have the basic information that we need to begin our assessment work."
"Uh, one more thing that the family wants me to tell you. Any sale of the company will require that all management people retain their positions."
I became upset upon hearing this and I looked at him and wondered if these people were related to the three clowns in Greenfield, or if it was due to generations of inbreeding, or both. I didn't lose my temper but there was no mistaking the edge in my voice. "I wish that you had included that fact in your proposal. I could have saved us the trip down here. There's no way that I, or any other interested buyer, is going to agree to that. For the past ten years, your management has sent this company into a downward slide. Now, you expect me to come in here and finance this operation while the same people continue to mismanage? My appointments are based on effort and ability, not family heritage. I guess that it's time for us to fold our tent and return to Vermont."
He spoke up quickly as I stood up. "That requirement was only voted on this morning, but…" he paused while he looked at his family, "I think that I can say that the requirement is open for discussion."
"No, no discussion. It's either dropped right now or we head for the airport."
Ian looked towards the company president, Edgar Thorehill, who simply closed his eyes and nodded once.
"Okay. The requirement is dropped. You can handle the matter of personnel retention any way that you choose."
"Very well. Then we'll get started on our assessments. Here's our schedule."
I gave Ian a copy of the schedule that I had worked out for the teams. Bob and Mr. Sloan would assess two of the sawmills and all of the timberland. Gerard and his engineer, Lenny, would assess two of the paper plants and the remaining sawmill. John and I would assess the other two mills, beginning with the one here in Asheville, plus both of the cardboard plants. Bill and Ron would use the proverbial fine toothed comb to go through the books here at the headquarters building.
Ian arranged for a car to take Bob, Mr. Sloan, Gerard, and Lenny to the airport. They would use the two planes to get to their first sites. The jet would return for John and me, to take us the next city after we were done here this afternoon. We wouldn't all be together again until we had completed our inspections.
Ian drove John and me to the paper plant. It was only a few miles away in an unpopulated area on the river. They had their own chipping operation here and the noise could be heard from a mile away. Chipping is the process where logs are de-barked, and then chipped into postage stamp sized pieces. It's these 'chips' which are used to begin the pulping process. In Brandon we get our chips from the former Highland sawmill that Ameri-Moore acquired.
Ian gave us noise protection headsets and hardhats as we went to look at the chipping operation. John immediately went to work and began an up-close examination of the equipment. Ian and I stood by as John worked because it was too noisy for conversation.
Once we were inside the plant, Ian and I talked as John inspected the pulping operation. I told Ian that we would be here for hours and that he could leave to take care of his regular duties, but he waved his hand and remained by my side.
John took his time and did the inspection right, so we didn't finish with the plant until almost three o'clock. As Ian and I talked, I watched the people involved with the various processes to see how they performed their jobs. I couldn't find any fault with their procedures, although I noticed that they didn't hustle as our people up at the other plants did. They seemed to have two speeds, 'very slow' and 'is he still alive?'
Ian drove John and me to a nearby restaurant after John had completed his inspection at the plant. I know that he was anxious to pump us for information about our impressions so far, but he wouldn't get very much. I kept changing the subject in an effort to keep him off balance and perhaps get him to divulge something that he didn't intend to.
After lunch he drove us to the airport and I thanked him for his time and considerations. He had arranged for a car to pick us up at our next stop and take us to the hotel where we had made reservations. The plane would continue on and pick up Gerard and Lenny if they were ready, and ferry them to their next destination. The pilots would stay there overnight.
We completed our last inspection late Wednesday afternoon. The pilots had done a good job of ferrying everyone around and Gerard and Lenny were already back at the hotel when we arrived. Bill and Ron arrived at about the same time as Mr. Sloan and Bob, and we all went to dinner in the hotel restaurant. Afterward we went to my room for a meeting to discuss our findings.
I took notes as each member of the team reported what he had found. I went last, letting everyone in on my observations.
As everyone filed out afterwards, Mr. Sloan stayed behind. "I was wondering if I could ask a favor of you," he said.
"Of course."
"I noticed that you call everyone, except me, by their first name when we're not with people from outside the company. I understand that they all work directly for you, but I was wondering if you might call me Pete."
"Okay, Pete."
He smiled. "Thanks. And may I call you DD as all your people do?"
"Of course."
"Thanks, DD. Will you need me tomorrow?"
"No. You can head back to Portland whenever you want. I really appreciate your coming down to give us a hand."
"My pleasure, DD. I'm going to take a couple of days off and look up some old friends in Knoxville before I head back to Portland. I hope that I'll see you again soon. If you need to reach me, I'll either be at the Weary Traveler Motel or the Sunset Motel, in that order."
"It's always a pleasure, Pete. Enjoy your mini vacation and have a good trip back."
In the morning, Bob, Bill, Gerard, and I went back to the headquarters for Appalachian. We were escorted into the conference room where the same dozen family members greeted us.
After renewed greetings and introductions, Ian said to me, "Have you completed your assessments?"
"Yes, we have. We find that your plants are in fair condition, although it's obvious that regular maintenance has slipped somewhat. Bill has observed that you've reduced your equipment maintenance staff, so it's understandable that the work isn't being done. The timberlands are in good shape right now, but you haven't been taking the proper steps to prevent soil erosion recently and you're going to have problems with the spring runoff unless you do something now."
"Bottom line," Ian said. "Are you interested or not?"
"We wouldn't be here today if we weren't. I'm simply informing you of our findings so that you can take corrective measures should we not come to an understanding."
"We're aware of the problems."
"I see— then we'll cut to the chase. After careful evaluation of all of the assets of the company, and a thorough examination of the accounts, I'm prepared to offer you 32 million dollars for Appalachian Paper." This was 4 million above what Alliance Paper International had offered, according to our information.
Ian looked over at Edgar, the president, then back to me. "That's not acceptable."
I paused for a minute to make a note, and then said, "You didn't put any asking price in the proposal. What do you feel is acceptable?"
"The family feels that a fair price is 60 million, but we'd be willing to accept 50 million for the company because of our declining profits."
I made another note in my notepad. "That's significantly more than we're willing to go. We're concerned about the viability of the company. I found it interesting that you haven't paid the taxes on the timberlands for the past two years. If you had, then you would have had to post losses, instead of the small profits that you did post. The tax debt is also missing from the ledgers."
Ian gave me a strange look, then looked to Edgar. I suspected that they were trying to figure out what other secrets we might have uncovered.
Edgar said, "We expected to have the taxes paid up to date by now, but we didn't make it. I wasn't aware that it wasn't included in our statements. It must have been an oversight. It's perfectly legal to postpone tax payments."
"Yes, it's legal to postpone tax payments, although the tax debt is supposed to be reported on the statements. If you were a publicly traded company, you would be in trouble for failing to report that information." I paused for about ten seconds. "We might be willing to go to 35 million if you can assure us that there aren't any other 'forgotten' obligations." Our investigator hadn't found any record of other liens or loans.
"Except for those taxes, we'll guarantee that the books represent the true condition of the company," Ian said. "Gram didn't believe in borrowing money and refused to let us take out any loans. She said that the company should be able to support itself after 72 years. The last loan that we had was when we built the plant down in Rome, 15 years ago. That loan was satisfied about eight months ago." Ian paused to take a breath. There was dead silence in the room. "Alright," he continued, "we'll come down to 45 million and guarantee that there aren't any other outstanding monies owed, except for the recorded Account Payables."
"If you'll guarantee that in writing, plus the fact that the employee retirement fund is intact, I'll raise our offer to 37 million."
"Gram wouldn't let us touch the retirement fund either so we have no problem guaranteeing that as well."
Ian got up and walked around the room. The last bid change had been mine, so it was up to him to respond. He could accept it, reject it, or propose a different figure.
After several minutes of silence he said, "The family voted a few weeks ago, not to accept any bid below 40 million. The four paper plants alone are worth that much. You can buy our company today for 40 million. That's as low as I'm authorized to go."
Now it was my time to posture. I leaned over to Bob and whispered very low, "Would you like to get some food from that restaurant where we ate lunch on Monday, to bring with us on the plane? It'll take about three to four hours to get home."
Bob, who had been leaning over to listen to what I had to say, pulled away slowly, looked at me and nodded.
"Okay," I said to Ian, "I'll raise our offer to 40 million, less the unpaid taxes."
Ian looked at me in silence for a few seconds as he computed the amounts in his head. I had estimated the figure to be around $200,000, based on what Bill and Ron had reported.
Looking at me, Ian said, "That should be between 190,000 and 210,000 dollars." He looked around at the family members and said, "The offer is 40 million, less what should have been paid, but didn't get paid. That means that the family will wind up with around 39.8 million dollars for the company." He waited while they digested the facts, then said, "Acceptable?" He looked directly at each one and waited until they nodded or shook their head. All but one nodded. Ian said to him, "What's the problem, Willie? This is 42% more than what Alliance Paper International was willing to pay."
"Zit, you promised that we wouldn't take less than 40 million, now you're going back on that."
"Look Willie, we're getting the full 40 million dollars, but we have to pay the back taxes on the land, that we didn't pay for the past two years. Instead of us getting the 40 million and then paying the taxes, these folks will pay the taxes and deduct it from what they pay us. Do you understand that we're only paying a past due debt?"
"I guess."
"Do you think that's fair, Willie?"
"Uh- well, I guess so, Zit."
"Then do you vote to accept the offer?"
Willie smiled weakly. "Okay, Zit, whatever you say."
Ian looked at me and said, "The vote had to be unanimous. We accept your offer."
I smiled and nodded. I opened my briefcase and removed two copies of a Letter of Intent that had been prepared by our attorney in Brandon. I filled in the amounts and the terms that we had agreed to and handed them to Ian. He in turn handed them to Edgar, who looked them over and then signed them. Handing them back to Ian, Ian signed it as well. Then I signed them and handed them to Bill, who notarized them.
With that done I gave a copy to Ian and stood up. "The formal transfer will take place as soon as the lawyers draw up the official papers, but Piermont Paper essentially became the owner of this company when those papers were signed, with payment required to be conveyed within ninety days. Except for normal sales of wood and paper products, no member of the former management is empowered to sell any of the assets of the company, or obligate the company for any amount. People from other Piermont locations, led by Mr. Warren here, will begin arriving here on Monday to assume full control. I hope that you'll give them your complete cooperation. For those Thorehill family members who are part of the workforce, and wish to remain so, please remember that this isn't the same company now. You will have to earn the right to retain your position, just as any other member of the workforce does. Some personnel realignment will be required, and some positions will be eliminated. It is our intention to turn the financial situation here completely around. Our success will have a major impact on this community, and the other communities where the plants are located. Thank you."
Ian stood up across from me and we shook hands while the family started to file out. I hung back with Ian to talk.
"Excuse me, Ian, but did Willie call you a zit?"
He laughed. "No, he called me Zit. Those are my initials. Zachery Ian Thorehill. I always hated the name Zachery, so when we were young, my friends called me Zit. I started using Ian when I went away to college."
"I see. Well, I may not see you again for a while so I want to thank you again for your courtesies. Are you 'retiring' or do you wish to remain with Piermont Paper?"
"Do I have a choice?"
"Well, there will no longer be any positions of President or Executive Vice-President down here, but there may be other positions that you and the other corporate members can fill. I know that it's hard to take a step down to a lower position after being near the top of the corporate ladder, but if you're willing to work hard, we'll find a spot for you."
"I'll have to think on it over the weekend. I guess that I just assumed that I'd be gone after the company was sold."
"We try to find new spots for any people who are displaced when we take over a company. The choice is yours."
"Thank you, and I hope that you can do better than we've been able to do during the past ten years. Poor Great Granpappy must be spinning in his grave, but we really tried to keep his dream alive."
We said our good-byes and left. Ian arranged for two employees to take us to the hotel to get our bags, and then take us to the airport. I got the driver to stop at the restaurant and I bought lunch for everyone, to go, including the pilots.
As we flew towards Michigan we ate an early lunch and discussed the plans to take control of the new company. We needed Piermont people in the top spots immediately. Gerard would send as many of his top people as he could free up, and they would report to Bob on Monday. He estimated that he could send ten top people right away, without severely impacting his region if they were only needed for a month or so. I told him to go ahead and make the arrangements for them to leave Sunday. We would arrange for air travel from Bishop airport in Flint, and accommodations in the cities where they would be assigned.
We stopped in Owosso and dropped Gerard and Lenny off. I thanked them both for helping out and then said good-bye. We would be back in Vermont in an hour and a half.
I had called Earl before we took off from Asheville and he was waiting at the airport when we arrived. He drove us all to the Holiday Inn where I was staying, and where the others had left their cars parked for our trip. I was very tired now that the excitement of the negotiations was over but I sat down and reviewed my notes and prepared for tomorrow's weekly meeting.
Before I went to bed I called Knoxville and found that Pete Sloan was registered at the Weary Traveler Motel, although he was not in his room. I left a message asking that he call me at the plant in the morning.
Everyone knew about the acquisition before the meeting started. In fact, I doubt if there was anyone in Brandon that didn't know about it. Still, I opened with, "By now you've probably heard about our latest acquisition. Let's leave that until everything else is taken care of, and then we'll spend the rest of the meeting on it."
It only took us about fifteen minutes to cover the old business and then I opened up the topic of Appalachian Paper with, "Yesterday, we took on a major challenge with the acquisition of the Appalachian Paper Company. For those of you not familiar with the company, we have now added 4 paper producing plants, 2 cardboard manufacturing plants, 3 sawmills, and roughly 200,000 acres of timberland at a cost of 40 million dollars. Of course we get an established customer base along with the purchase. The downside is that the company has been in a downward slide for the past ten years, and slipped into the loss column 2 years ago, although they played a little game of forgetting to report unpaid taxes, in order to conceal that fact.
"The main problem that we face with this acquisition is the fact that it's a family run operation. Management is there by virtue of their birth, rather than because of their abilities. I can tell you from personal knowledge that some of the managers are not the brightest bulbs in the lamp. We'll have to have at least one top person in each facility to act as temporary manager, and the temporary managers will be in place for at least a month. Bob has prepared a list of people that he would like to bring down there, and Gerard will also be providing people. These employees will temporarily form our core group of management. Its been suggested that we immediately replace all management related to the Thorehill family but indiscriminate firing might cause us to loose some valuable talent so we'll review each position on a case by case base before announcing any layoffs.
"I'm assuming that we'll eventually transfer the sawmills and timberland over to the Wood Products division, but that still leaves us with 6 new plants, making the Southeast Region the largest of the three.
"Those are my opening remarks on the new acquisition. Bob, anything to add?"
"DD already knows how excited Bill and I are about this acquisition. Until Ameri-Moore's Wood Products division takes over the sawmills, we have more than doubled our size. We have a huge nut to crack with this project and it's going to take a lot of hard work. Every person here is going to be impacted by the acquisition, including Mike, because I'm going to steal three of his top people." Everyone chuckled. "This will also give us an opportunity to evaluate some of our other employees because they'll be temporarily moved up while the senior people are down south.
"Basically, we have to get the people in the Southeast Region working again, which is my take on why the company is failing. I never saw people move so slow without falling over. They will either start moving their backsides and get production up or we'll be hiring replacement people on a wholesale basis, and I won't hesitate to tell them that. They've taken their cue from poor management in the past, so hopefully they'll take their new cues from the new management. We're going to take a company that has been losing money, and turn it around over the next year. I expect the Southeast Region to have a pre-tax net profit of 6 million dollars for this calendar year. That's all I have to say right now."
"Thank you, Bob. Anyone else? Yes, Bill?"
"I'll be traveling down with the first group. Ron will remain here to look after things but I'll be taking several of our best accounting people with me. Like in the Midwest Region, everything is already consolidated in one place, so for my people it's like taking over just one company."
"Thank you, Bill. Yes, John?"
"The equipment is operational but we have to get them doing proper preventative maintenance. I'd like to go down and work with the engineers to get them on track with a proper schedule."
"Okay, John. Thank you. Ben?"
"I don't think that I can offer any assistance with personnel matters from up here. I'll go down there if you think I can be of help."
"Thank you, Ben. For right now we need you up here to continue filling the positions in Danbury, Concord, and Glens Falls. Bob will have to evaluate the personnel department down there to see if they're up to the task of staffing the region.
"Purchasing will be consolidated as soon as possible. We'll only need to have a purchasing coordinator down there.
"Sales will also be consolidated, but slowly, as we're doing with the Midwest Region. They'll be permitted to deal with their own customers but we'll also be taking orders for their products. Because we have so many plants now, we can start being a lot more specialized in what we're producing at each plant, rather than having the same products produced at several plants.
"Bob, I spoke with Pete Sloan this morning. He was staying over in Knoxville for a couple of days to visit friends before going back to Portland. I asked him to postpone his trip west for a few more days so that he can meet with you next week. I asked him to go through the personnel rolls and make whatever recommendations he feels are appropriate."
"Thanks, DD. His input will be very useful. Pete reads people very well and having worked with some of them is a major plus."
The meeting grew more informal from that point and we spent the next 6 hours talking about the various plants and mills. We worked through break times and lunch. Bob had made a list of people that he wanted to put in the top spot in each of the nine plants or mills and we discussed them before I approved of each.
My last act for the day was to sign the loan papers for the money needed to complete the transfer. With my work done, I headed for the airport. I had to be back at school on Monday morning, so I had to get back to Texas.
It was late when I arrived home. Judy, Mary and Susan came out to welcome me back and help me with my suitcases. Rosa fixed a plate for me of leftovers from dinner.
As I ate, Susan said, "Did you buy any plants while you were in Vermont?"
I didn't say a word. I just smiled.
"You did, didn't you? I thought that you weren't going to spend any money this trip. What did you buy, another paper plant?"
I just continued to smile as I ate.
"Did you buy more than one plant?"
I nodded.
"Two?"
I shook my head.
"Three?"
I shook my head again
"Four?"
I shook my head.
"Five?"
I shook my head.
"Oh my god. Six?"
I shook my head.
"Is this a joke?"
I shook my head. The rest of the family was just looking on incredulously.
"Seven?" Susan said with a trace of exasperation in her voice.
I shook my head.
"Darla Anne Drake, what did you do? Buy the entire state of Vermont?"
I stopped chewing and swallowed. "No, I bought Georgia, North Carolina, and Tennessee."
"You did what?"
"Actually, I bought a company that has plants in those three states."
"How many plants?"
"Nine all together. 4 paper plants, 2 cardboard plants, 3 sawmills, and 200,000 acres of timberland."
"Oh my lord," Susan said. "How much did that all cost?"
"I paid 40 million dollars. It's a good deal if we can turn the company around. A year from now the group could be worth up to 100 million."
"40 MILLION DOLLARS. You're crazy. I thought your last purchase for 19 million was crazy. This is insane. Do you know how long it'll take you to pay off 40 million dollars?"
"I estimate about 5 to 6 years if all of the company profits are applied to retiring the debt. Perhaps half that if Grandma wants the land and sawmills for the Lumber Division."
"Let me get this straight," Judy said. "You went back east for two weeks and during your visit, you found and purchased a 40 million dollar company with 9 plants and a fifth of a million acres of land?"
"Basically. We still have to have the formal transfer in about a month or two. Right now we only have the Letter of Intent, but that's a binding contract for the sale."
Mother asked, "Darla Anne, did you need the company?"
"We didn't need the company, Mother. I negotiated a decent price, so I bought it. If we can turn it around, as we have the others, we'll double our money. In business, you don't always buy things because you need them, you buy them to make money."
"Your deals have been getting bigger and bigger," Auntie said, "Are you doing it for the excitement it brings you?"
"I don't know. It's exciting to be negotiating multi-million dollar deals. I get a real thrill while I'm doing it, but then I feel a big let down after it's over."
Auntie nodded. "I've known oil people like that. They live only for the deal. We call them the wheeler-dealers. It's almost like the spell that gamblers fall under."
"Well, it's over now. I won't be making any deals for a while."
"Why not? As your Grandma says, you seem to have a knack for it."
"Knack or not, it takes money. I just signed for a loan of 40 million dollars. As Susan alluded to, it's going to take years to pay that off. If Grandma takes the land and sawmills for half, we still have to pay off $20 million. At the soonest, it will take two to three years to pay it off."
"You don't have any other funds available?" Auntie asked. "Didn't I hear your Grandmother tell you, during Christmas dinner, to apply for a line of $100 million?"
"Yes, we still have $60 million available. But I don't think that I'd use that."
"At least not until a good deal comes along; one that you can't pass up. You can still negotiate a lot of deals with 60 million dollars. If you really have the fever, you'll be making more deals before the year is out."
"How do the oil people you talked about control their fever?"
"They don't," Auntie said. "They just travel around, wheeling and dealing, buying and selling, making fortunes, and losing them again."
"I haven't sold anything yet. We worked too hard to get the companies solvent. I don't want to sell them."
"That puts you in the class of the original, major wheeler-dealers, like Rockefeller, Carnegie, and Getty. They just built and built. The current wheeler-dealers live for the deal. They don't try to add value. They're as happy selling and trading as they are buying. And they're not just limited to oil. On a much smaller scale, you can find them any weekend at the flea markets, or a slightly different breed on the floor at the stock exchanges. There they call them traders, but it's the same fever."
"It's beginning to sound like a pretty common problem."
"It is, really. You just deal in millions while others deal in hundreds or thousands."
"Then it's nothing to be ashamed of?"
"No, not as long as you maintain your perspective. At its root it's called Capitalism. You can buy all you want as long as you can pay the piper at the end of the dance."
I thought a lot about that conversation during the rest of the night, and I thought about the last deal. I wondered if the trepidation that I had been feeling before the deal was because I thought that it was the last deal that I'd be able to make for a while. Certainly the deal had gone fairly smoothly once we got into it.
But it was time to forget about deals and companies. Semester finals began in a week and a half and I would need all my time for studying.
(continued in part 31)
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