Texas Gal
by C. Sprite

 

Chapter Thirty-Four      SouthCore loses again!

We went to the conference room and took our seats as John went to tell Mr. Nedermyer's secretary that we were ready whenever he was free. We only had to wait a few minutes before Mr. Nedermyer and his comptroller came in.

"Well, Miss Drake, what do you think of my plant?"

"Your maintenance is slipping, but the equipment is in good condition."

"It should be. It's almost new."

"What price are you asking for the plant, Mr. Nedermyer? Please realize that I know the complete situation. This inspection was only to confirm what I had already learned."

Mr. Nedermyer started to speak, then paused as he looked at me. He looked at his comptroller who just nodded, grimaced and then turned back to me. "The plant is valued at 12 million."

I just looked at him with a blank expression on my face.

"With the timberlands included, I'd like to get 16 million."

I continued to look at him without saying anything. Finally, I said, "I'm sure that you would, but that's a quite a bit more than South-Core has offered you."

He looked like I had slapped him. "How do you know about that?"

"I know how they operate, and I made the assumption that they had already been here to visit you. I would say that they offered you about $250,000 and agreed to assume responsibility for the bank note and all other debts."

Mr. Nedermyer just looked at me for a minute, gritting his teeth, as he tried to formulate his response. "They offered $400,000. I kicked them out of my office."

"They probably figure that they can pick it up from the bank for less than a million over the note amount once the bank forecloses in a couple of weeks. And that way they won't have to pay the $380,000 that you have in A/P, so it will only cost them a little more than they're offering you now."

"You know about the bank?"

I nodded once.

"Then you probably also know that I have a party willing to take some of the timberland. It will enable me to bring the bank payments up to date."

"No, you don't."

Mr. Nedermyer didn't have much of a poker face. It registered all of his emotions. "And just what makes you think that I don't?"

"Two reasons. First, you're in your present position because you've depleted all your assets trying to keep your plant going. If you were about to get your finances straightened out, I doubt that you would still be looking to sell. Second, the note at the bank uses the plant, equipment, and land as collateral. You can't transfer any of the timberland, legally, unless you first pay off the $2,051,256.37 owed on the note, in full."

Mr. Nedermyer just glared at me.

"Mr. Nedermyer, I told you that I know the complete situation. I want you to start being truthful with me. I'm not your enemy. I'm here to make you a much better offer than you're ever going to get from South-Core. You've been trying to sell your company for more than a year without finding any takers. You haven't made any noticeable headway on retiring your note because most months you've only been paying the interest, and not even that consistently, which has resulted in you being four months past due. In a couple of weeks you lose the whole shebang to the bank because you're so delinquent on your payments and the bank has lost its patience. I'm sure that South-Core will still be willing to pay you $400,000. They might even sweeten the offer a little, if you seem cooperative."

Mr. Nedermyer's face had softened a bit as I spoke. I felt that he might be ready to listen now.

"I'm here to offer you $2 million, less the amount of the accounts payables and back taxes, and I'll assume the responsibility for the balance of the note. You'll be out clean, with a decent bank account."

"You're going to pay $4 million for a plant that you may be able to pick up for 3 in a month? Why?"

"This way I don't have to get into a bidding war with South-Core. Remember, if the bank forecloses, you're left out in the cold without anything at all while South-Core and Piermont square off. My way, you wind up with about $1.5 million, payable over two years, and your creditors all get paid, leaving them with better feelings towards you in case you decide to continue somewhere in this industry."

"What do you mean, payable over two years?"

"One-half million when we have the formal transfer, plus one-half million more on the first anniversary, and the full balance on the second anniversary."

"Plus interest?"

"I think that the deal is sweet enough now when the alternative is $400,000 from South-Core."

He grinned. "It doesn't hurt to ask." He looked at me for a few seconds. "Okay, Miss Drake, you have a deal."

I took two copies of the Letter of Intent, that I always carried when looking at possible acquisitions, out of my briefcase and filled them out using the amounts and payment schedule that we had agreed on. When I was done, I attached the timberland maps to our copy and gave both copies to Mr. Nedermyer to sign. I also had him initial the maps showing the timberlands. Then I signed both and gave them to Bill to notarize.

When he was done I gave Mr. Nedermyer his copy and put mine in my briefcase.

Mr. Nedermyer smiled and said, "You know, I would have settled for a lot less."

I looked at him and said confidently, "I know. Your back was firmly against the wall and you were looking at complete dispossession within a matter of weeks."

He looked astonished. "Then why did you pay so much?"

"Because Piermont isn't South-Core. We're very happy with the deal, and you don't feel too resentful towards us since I'm paying you almost four times what South-Core has offered to pay you, so you'll help us with the transition. You are satisfied, aren't you?"

"I'd be a lot more satisfied with 5 million, but I'm satisfied, Miss Drake."

"Good. A team will be here on Monday, headed by Mr. Warren here, to take responsibility and begin making this plant a part of Piermont Paper. The document that you signed effectively transfers ownership of the property immediately, so you can no longer sell any of the assets of this plant, other than normal paper sales, nor create any debt for the company. The company lawyers will begin working on the formal transfer documents and we'll complete the sale as soon as they're ready. It normally takes from ten to 30 days."

"Very good, Miss Drake."

"Thank you, Mr. Nedermyer. Good luck."

"Thank you, Miss Drake."

"You're welcome. Could you have your drivers take us back to the airport now?"

"They're your employees now, but I'll tell them. Goodbye."

The cars were still parked out front and we got in to wait. The drivers showed up a few moments later to drive us to the airport. I asked our driver his name as I got out of the car.

"It's Frank. Frank Bonner."

"Thank you for driving us around, Frank."

"You're most welcome, Miss Drake. Did I understand Mr. Nedermyer correctly? Did you just buy the plant?"

"Yes, Frank. I bought the entire company."

"Then it's pleasure to be working for you, ma'am."

"Thank you, Frank."

The pilot had done the preflight and was all set to go when we got into the small plane. Because of the noise, we couldn't talk until we were back in Rutland. Earl was waiting at the airport when we touched down. He had spent the day napping in the car at the airport, despite the fact that I had told him he could leave, as long as he was back by 4 o'clock.

As we pulled out of the airport grounds, Bob smiled and said, "I was hoping that you weren't serious about not buying any more plants for the next 2 years."

I smiled back. "I was serious, but I said that for the right deal I would make an exception. This was such a deal. A plant with two, almost new, paper manufacturing machines in a new building, and 68,000 acres of land for 4 million was a deal that I couldn't possibly pass up. The land alone is worth that much so it's like getting the plant for free. Bob, let's use half a million from our reserve account for the payment to Mr. Nedermyer. The other million should cover the payment arrears, unpaid taxes, and accounts payable. Let the bank holding the note know that we've purchased Gorham, and that the arrears and all interest will be paid up as soon as we can finalize the transfer."

"Okay, DD. I'll also get Tom Harris working on notifying the creditors that they'll be paid as soon as we can get the accounts straightened out."

"I'd like to be a fly on the wall," John said, grinning maliciously, "when South-Core learns that we bought Gorham."

"There's going to be a lot of screaming and teeth gnashing in South-Core headquarters tomorrow," Bill said smiling. "I bet that they thought we were still so busy with the Maine acquisitions that we wouldn't see the Gorham deal."

"What kinds of problems are you and Larry going to have, Bill?" I asked.

"Nothing too bad, DD. Their accounting system is pretty well organized. The hardest part is always making the decision about what employees to retain and which ones to let go. We'll go up there next week and start packing up the records for shipment back to Brandon."

We had reached the hotel so we agreed to finish our discussion at the regular Friday meeting tomorrow and we all said goodnight.

 

This Friday's meeting was the monthly meeting that both Gerard, from the Midwest Region, and Ron from the Southeast Region, attended. After everyone had gotten their coffee or tea, I opened the meeting, "Good morning, everyone. Thanks for coming. Let's get through the status reports first, then we'll talk about Gorham.

The status reports confirmed that everything was going well. The Midwest sales were up again. It was due in part to the greater variety of products that we offered now, and in part because the sales department personnel were still in fear for their jobs. They knew that we had intended to close the sales department, and they were trying to justify their continued existence. I wondered how long they could keep up the pace, and I was perfectly content to leave the office open as long as it performed well.

The Southeast sales were way up again also, but they had been so low when we assumed control, that the increase was almost expected. Like the Midwest sales department, they were fighting to keep their jobs from being transferred to Brandon. Another incentive in all three divisions was the commission system that had been established. The sales teams were now able to make higher salaries than they ever had before, and the higher sales were the direct result of their efforts.

"Thank you, everyone. I'm really happy that things are going so well, especially since I keep spending money faster than you're making it. As I'm sure you all know, we added another plant yesterday. The former Gorham Paper of Gorham, New Hampshire, is a manufacturer of newsprint paper. We acquired the plant and 68,000 acres of timberland, of which 30,000 acres are available for harvesting. Part of the plant was rebuilt after a fire and the two paper forming machines are only a few years old. We acquired the plant at the bargain basement price of 4 million. If you listen closely you will probably be able to hear the screaming over at South-Core. They were poised to takeover Gorham within the next month.

"The new plant will, of course, become part of the Northeast Region under Bob, bringing our number of plants in this region to eight. We'll need the cooperation of all three regions to sell its products. We already had excess capacity at the two Maine plants, so now we have a glut of newsprint capacity. Any suggestions on ways to improve our sales?"

"Sales of newsprint," Gerard said, "are beginning to pick up a little as our salespeople make new contacts among the newspaper and printing industry people, but I think that our problems are rather more fundamental. We used to rely on salespeople that called on every customer, personally. More and more, the salespeople have taken to never leaving the office. They feel that they can contact twenty customers by phone, for each one that they can visit in person. I'm not knocking telephone and catalog sales, but I think that face-to-face meetings with big accounts such as newspapers and printing companies are vital. I've been doing a little research, with Matt's help. Virtually all of our largest customers were customers at one of our plants when Piermont acquired it. We've substantially increased the business that we do with most of them as we improved production, lowered prices, and expanded our lines, but we're not picking up more major accounts. New accounts are generally the smaller companies. We send them nice sample books and pretty catalogs instead of a salesman, and that seems to be enough for them. Since we expanded into the Midwest and the South, a lot of discussion has been devoted to closing down the sales offices and consolidating efforts in Brandon. I think that we need more sales offices, not fewer. We should have sales people personally calling on every major user of paper in the U.S."

The room was dead quiet as everyone thought about the idea that Gerard had put forward. I broke the silence by saying, "What do you think, Matt?"

"Gerry has a good point. Sales were doing so well that I didn't realize that we weren't picking up any new accounts from the largest paper buyers out there. We do have some, but they were acquired years ago, and then we built up our business with them. As we acquired new plants, we acquired new customers, so we didn't realize that the new major clients had been buying from one of our acquisitions for years. The large companies that Brandon was supplying were mostly brought in by me, but I realize that some purchasing managers like a visit."

"As a purchasing manager myself," Tom Harris said, "I can tell you I enjoy meeting the people that I talk with on the phone. I don't need to see them all the time, but I like to have an image in my mind of what the person at the other end of the line looks like."

"Could the same thing be achieved by sending a picture of the salesperson with the samples package?" I asked Tom.

"It… could help, but I think that a yearly visit for smaller accounts, and quarterly or monthly visits for large accounts, might make a big difference."

"Then the proposal is that we set up sales offices around the entire country?"

Gerard nodded.

"How about if we just hire salespeople that operate out of their own homes. Is there really a need to have a staffed office? Or perhaps we could just add a couple of sales offices, on a regional basis, linked by the new Telex system? We already have three regional offices, we could add two or three more."

"I sort of thought that we were headed that way anyway," Bob said. "A few more purchases like the last few and we'll cover the country."

His comment brought a chuckle from everyone at the table, including me.

"It's a good idea, but we're running low on acquisition money," I said. "We probably shouldn't wait for new plants if the lack of salespeople is restricting sales. We'll give the sales people a place to report to later."

We spent the next few hours discussing the salesperson issue. We worked through lunch served by the B&B and through breaks. Someone went to get a map of the U.S. and we set up territories based on perceived sales opportunities. Matt would coordinate the efforts to hire outside salespeople with Ben Philips and each of the Sales Managers. Salespeople who called on large accounts would be paid strictly by commission, but at much higher rates than in-house sales people who received a base salary and used the phone for contacting smaller customers. I would check with our other divisions to find out if we could get office space from which the sales people could operate. The Logging and Forestry Products division had the large office building in Portland, and the Textile Division had their main building in Fort Worth and a smaller building near San Diego.

We had exhausted the topic by 2 o'clock so we wrapped up the meeting, and I said goodbye to everyone as they left. I phoned Earl to let him know that I was ready to leave. Then I packed my briefcase and, after saying goodbye to Nancy, I left the building.

The plane was waiting at the airport when I arrived. The pilots had had instructions to return for me today and I climbed on board, after saying goodbye to Earl, and settled into my seat. I was glad to be going home. Without something to buy, I would just be sitting around and reading if I stayed any longer.

It was after five o'clock when we reached the ranch. Judy, Mary, and Susan were all away at their jobs, so only Mother and Ricardo came down to meet me and help me with my suitcases.

After I had put my things in my room, I washed up and changed. Dinner was almost ready when I went back downstairs. Auntie arrived home in time to sit down to dinner with us.

"Darla Anne, I was surprised to see you here. I thought that you'd be up in Vermont for a while," Auntie said.

"I finished up everything that I needed to take care of. I can do the work on the division's master plan from here. If anything comes up, Bob Warren will call."

"What, no companies to buy?"

"Well- I bought one small one before I left. That's enough for now. I really want us to get ourselves organized and reduce our debt."

"A small one?"

"One paper plant and 68,000 acres of timberland. I got it all for the bargain price of only four million, with one million of it in non-interest-bearing deferred payments to the owner, and two million in bank structured debt. It was an exceptional deal, and the owner made out okay since he was facing foreclosure and a complete loss in a couple of weeks. I learned about it from the investigator that I hired to keep an eye on South-Core. He told me that they were expecting to acquire it very soon."

"Oh, Darla Anne," Mother said. "You're not getting involved with those awful people again, are you?"

"No, no involvement," I said smiling, "but they're going to be quite upset when they hear about the deal."

"You're not deliberately goading them are you?" Auntie asked.

"No, of course not. I learned about the plant's availability and I used the information to acquire it. The owner had already sent me a letter offering to discuss the sale with me before I made contact with them. With this acquisition and the last, we now have more paper producing plants than South-Core, so I don't think that there's much chance of them mounting a frontal assault anymore. Our total capacity is about 30 percent greater than theirs; we're more diversified, and better geographically distributed."

"I'd keep a wary eye out anyway," Auntie said. "Gabby always said, 'Never turn your back on a rattler; even when he ain't shaking his tail'."

"Our investigator is still on the job and he'll let me know if South-Core starts cooking up any trouble. We're way too big for them to try a take-over now, so the most that they can hope for is to cause us a little grief. We'll keep watching them."

"What are you going to do with yourself this summer if you're not going to work in Vermont?" Mother asked.  "And what about your company picnic?"

"The company picnic will be handled by a small committee of junior executives in each region."

"Each region?"

"Yes, each region will have its own picnics this year, following the rules that I established last year of no hard liquor, and everything else free. I turned the job over to Ben Philips, our new Vice-President of Personnel and Employee Relations, after the first one last year; the two regional V.P.'s have each assigned the task to the personnel director in their regions. We've gotten too spread out to have a single picnic, or even just a single picnic per region, so we're actually having seven picnics this year. Five of them are on Piermont property and two are at rented picnic areas. All picnics are within ninety minutes driving time of one of our plants.

"I haven't made any decisions about my own time yet. I thought that I might spend a little time here at the ranch, and then go to work with Auntie for a couple of weeks, or perhaps travel up to Portland to help Susan with inspections of the logging operations."

"You're welcome to come along with me, honey," Auntie said. "You're going to be a junior at college this year and the experience might help with your studies in petroleum engineering."

"Thanks, Auntie."

"Maybe your grandmother could use your help elsewhere," Mother said. "She keeps saying how upset she is with the textile division's poor performance."

"I'll be happy to do whatever I can, but Judy is the textile division expert in the family. I didn't turn up anything important in my round of inspections last year and I feel like I'm out of my depth there. I think it's just one of those things that have to be worked out in the new lab that Grandma is setting up on one of the farms."

"I'm sure that she'll ask you if she wants your help. Have you told her that you're available?"

"No, not yet. I call her tomorrow."

Mary arrived home about 7 o'clock. Kevin had helped her get her driver's license while at college and Grandma had arranged for a company car, in this case a Chevy Suburban. She was working in the Abilene office this year, but she was prepared if she had to go out to one of the ranches.

Judy didn't get home until after 8, even though she only had to come from the Fort Worth headquarters where she was working now. She too had a company car, a big baby-blue Buick LeSabre. She said that she was late because of a quarterly report due on Monday. Grandma was still holding everyone's feet to the fire in the Textile division.

"Everyone is running around like their jobs depend on it."

"Maybe they do," I said. "Grandma's been very unhappy with the performance of the division. I sat in on an executive meeting last June. Grandma had them quaking in their boots. If they haven't improved their act since then, I wouldn't be surprised to see a few job vacancies appear. Grandma is very generous with salary and benefits if you work hard and work smart, but she can be equally ruthless if you're not doing your job."

"The division's numbers haven't improved. We're still lagging way behind the industry in general. I don't know why."

"I bet that Grandma has some action planned. Be prepared for anything."

 

In the morning we went for a long ride around the ranch. Susan was noticeably absent because she was on an inspection tour in West Virginia and hadn't returned for the weekend. Even so we enjoyed the nice day and excellent company, arriving back at the house about noon.

Darla Anne – 15 going on 40

After cleaning up and changing, we had lunch and then sat out on the porch to relax. About 2 o'clock I went inside and called Grandma. She wasn't home so I just asked her secretary to tell her that I had called and that I'd be at the ranch if she wanted to talk to me.

 

Grandma called back on Sunday and we invited her over for lunch. She always had a standing invitation to come anytime, anyway. She showed up just before noon and we all relaxed on the front porch until Rosa had lunch ready.

"I heard that you snatched another plant away from South-Core," Grandma said.

"Just a single plant and 68,000 acres of land, but the major machinery and most of the plant building is like new. Who did you hear it from?"

"I was speaking to a wood products distributor at a political fundraising event in Austin last night. He asked if we had any interest in a plant that he had acquired when he purchased a window manufacturing company. He said that since we had just picked up a plant in Gorham, we wondered if we were still in a buying mood."

"Where's his plant?"

"In Pennsylvania somewhere."

"Pennsylvania? We don't have anything up there. What did you tell him?"

"I told him that he should talk to you because you made the decisions on all acquisitions within your division. He said that he'd call you."

"Okay, I'll talk to him if he calls. I wasn't planning on buying anything for a while though."

"Is it money, or organization problems?"

"Well, we still have fifty million available on our line of credit, and the organization is solid. Bob and the other executives that you set us up with originally are the best people that I could have asked for. We also got lucky and acquired a few top people on our own such as Matt Piermont, John Fahey, Ron Collins, and Gerard Deveraux, just to name a few. There's no problem with my top people. If anything, I have to rein them in. They love it every time we acquire a new property. It's an incredible amount of work but they can't seem to get enough of it."

"What's the problem then?"

"I just feel that we should go a little slower now. I've been steamrollering my way along, and it just seems like I've taken on too much, too quickly. Susan believes that I'm getting carried away with all my purchases, and the rest of the family thinks that I'm caught up in the wheeling and dealing. I'm not so sure that they're wrong."

"We didn't mean that we thought that you were doing anything wrong, Darla Anne," Auntie said. "We were just commenting on the way that you did it. It just seemed so- spontaneous, to us."

"I'm sorry if you thought we were criticizing you, honey," Mother said. "Your ability to make these million dollar deals is just so foreign to most of us— and a little intimidating."

"I've told you before, Darla Anne," Grandma said smiling softly, "that you have a real gift for making these deals. I need reams and reams of data before I can begin to make a decision, and then I have to think about it for a month, but you've shown that you can just cut through all the hooey and grab the prize while others are still trying to figure out what to have for lunch. I have to admit that I expected at least one bad deal by now, but every one has been a winner."

"You expected me to fail?"

"No, not at all, sweetheart. I just didn't expect a perfect record given the way that you operate. One bad deal would hardly make you a failure, or even have made a dent in your record, given your string of successes."

"You don't think that I'm moving too fast, or borrowing too much?"

"According to the financial statements that you're sending to me, every plant in your division is operating well in the black. The ones that carry notes are not only meeting the payments on their own debt, but are also bringing in considerable extra revenue for the division. The only good reason for a company to borrow money is to use it to produce additional revenue that wouldn't be available without it. I wholeheartedly approve of your borrowing practices, and perhaps even more importantly, so do the lending organizations. Your division has a top credit rating, both with lenders and suppliers, and you keep enough cash reserves available to meet whatever problems arise. I'm not suggesting that you just go out on a buying spree, but you should definitely continue with what you were doing. It doesn't matter if you owe 50 million, or 50 billion, as long as the financial management is sound. If you can make 8 million in pre-tax profits on assets that you secured by borrowing 67 million, then you can make 80 million by borrowing 670 million."

"We've been lucky to find plants that were struggling, or where the owners were looking to retire, while we were in a position to buy. There can't be that many more companies out there that have to, or want to, sell out."

"I realize that the right deals have to be present. I'm not suggesting that you pursue any deal that doesn't feel right for you. I just don't think that you should close yourself off to opportunities because of some artificial ceiling that you've imposed upon yourself. If you can't get more money from the bank, then I can get you whatever you need by borrowing through one of the other divisions. I can't imagine that you would have any trouble getting funds though. Lenders are always ready to loan money to a company rated as highly as Piermont. I'd be willing to bet that your bank would double or even triple your credit line in a minute."

"Okay, Grandma. I'll keep at it if you say so."

"Good girl. I wish that you were finished with college."

"Finished? Why?"

"Because I'd love to turn the Textile division over to you for a couple of years and have you work your magic on it."

"Judy mentioned that there hasn't been any improvement."

"After my little tirade last year, the gins and mills improved a little, but the farms have dragged the overall numbers down lower than last year."

"Have you set up the test farm that we talked about?"

"Yes, but they tell me that it will take a couple of years before they can make any real determinations based on information collected from the test fields."

"So what are you planning to do?"

"The quarterly report is due out tomorrow. I'm waiting until I see that before I decide. I have a meeting scheduled in Fort Worth on Thursday. Would you like to come?"

"If you want me to, I'll be happy to come."

"Okay, we'll pick you up at 8:30 Thursday morning."

"Okay Grandma."

"Grandma," Judy said after listening to everything that had been said, "what can we do if the farms aren't producing the crops?"

"The farms are only one component in the division. Whatever we need but don't produce on our own farms, we purchase from independent farmers, or co-ops. If the gins and mills are not performing up to requirements then we have to take steps to correct the problems."

"What does that mean, take steps?"

"Whatever's required, dear. We can shift personnel, adjust pricing, hire new people, upgrade equipment, and even dismiss people who aren't doing what they're paid to do."

"You mean that you'd fire people?" Judy asked.

"If it's needed, yes. This is a business and you do what's necessary. Your sister knows that. She's had to fire a lot of people."

"Really? Is that true, Darla Anne? Have you fired a lot of people?"

"Well— yes." I said. "As Grandma says, sometimes it's necessary. We've had to lay some people off when we took over companies and no longer had a need for their particular skills. In most cases, we offer to keep them if they'll transfer to where the jobs are located now. I've also issued orders that specific people are not to be considered for employment, such as the sales people from Brandon and Concord that were lured away by South-Core. We had to fire dozens of people when we took over Appalachian because of indolence and incompetence, although I didn't do it personally. There have also been occasional firings at plants for absenteeism, trouble-making and fighting, drinking on the job, and even one for sleeping on the job after repeated warnings."

"I don't think that I could ever fire anybody," Judy said.

"Ask yourself this," Grandma said, "is it better to fire one person, or even several dozen people early, or watch everyone lose their job when the business folds?"

Judy was silent for a full minute. "I guess that it's better to fire the person or persons. I just couldn't do it."

"I think that you'll be able to do it when your time comes to assume a position in management. The first time is always the hardest."

Judy didn't answer. I could see that she was wrestling with the issue in her mind. I guessed that she was thinking about the people that she worked with and trying to visualize having to fire one or more. Rosa came out to tell us that dinner was ready.

 

I stayed at home on Monday, Tuesday, and Wednesday. I rode with Mother in the mornings, and then spent the afternoons working on the new master plan for Piermont.

 

Grandma and Charles arrived to pick me up on Thursday morning. I was ready when they reached the ranch and as we headed towards Fort Worth, Grandma gave me a copy of the quarterly report to read over. As expected, the numbers had declined again.

When we reached the headquarters of the Textile division, we went immediately to Grandma's office. I sat on the sofa in her 'casual' area while Grandma worked at her desk. About an hour before the meeting was set to start, her phone rang and she said, "Send him in," into the mouthpiece. Mr. Wickerham came into the office.

"You wanted to see me, Mrs. Moore?"

"Yes, come sit down."

Mr. Wickerham crossed to her desk. He looked in my direction and nodded. I nodded back. As soon as he had taken the chair across from Grandma, she began.

 "Mr. Wickerham, a year ago I spoke to you during an executive meeting about the productivity at the cotton gins. I expected you to take corrective action but there hasn't been any improvement. How do you account for that?"

"I've done what I can, Mrs. Moore. I've spoken to each of the gin managers and warned them that they had better get their act together, or else."

"How many have you fired?"

"Fired? Well— none. They all have families. I couldn't just fire them. I know that I can bring them into line this year."

"So you expect us to wait another year to see if you can get results?"

"Uhh, I'm sure that things will be better this year."

"I am also, Mr. Wickerham. Effective immediately, your position with this company is terminated. If you go quietly you'll receive the standard four-week severance package given to executives."

Mr. Wickerham's jaw dropped. "But why?"

"Because you've failed to do your job and the company is suffering because of it. Perhaps your replacement can get the gin people productive. If not, then he and they will also be looking for new jobs. That's all, Mr. Wickerham. You can go clean your personal possessions out of your office now."

Mr. Wickerham stood up. He looked like he was in shock. I guess the idea had never occurred to him that he would really be fired. He turned and left the room. Grandma sighed and looked down at her desk. I didn't do or say anything to disturb her. After a few minutes, she picked up her phone and told the secretary to have Mr. Edwards, the executive vice-president come in. A few minutes later he entered and come over to the desk. Grandma indicated that he should sit down.

"I just dismissed Mr. Wickerham."

"I heard. He's devastated. He came to my office right after he left here."

"He had a year to shape up his section. He didn't achieve any improvement over last year."

"He tried."

"Not hard enough. He got paid to make hard choices and take corrective action. He apparently couldn't handle the job. We've seen poor performance in each of the four years that he occupied that position."

"Is he the only one that you'll be terminating?"

"For today. If we don't see any improvement after this example, than I'll be forced to make another."

I could see Mr. Edwards visibly relax. He had been very tense since coming in. He probably thought that that his head was next on the block. "I think that this will certainly send a message."

"I hope it does, because I intend to cure the ills that are dragging this company down. I rely on you to run this company when I'm not here. You should have recommended terminating Wickerham a year ago. If you can't handle the job, I'll have to find someone who can."

"He's my friend."

"Would you like to join him on the unemployment line?"

"No, Mrs. Moore."

"Then remember that friendship is not a substitute for performance in the executive suite, or anywhere else in this company. If anyone else is failing to perform, it's your duty to inform me. If you don't, then you're not doing your job."

"Yes, Mrs. Moore."

"That's all. I'll see you in the conference room."

"Yes, Ma'am."

After Mr. Edwards left, Grandma asked the secretary to bring in two cups of tea and then came over and sat down on the chair across from mine. "Do you think that I was too tough on him?"

I thought for a few seconds. "No. If he knew that Mr. Wickerham wasn't doing his job, and let it slide because of friendship, then he needed to be reprimanded. Perhaps he'll stop letting friendship prevent him from doing what has to be done for the good of the company."

Grandma smiled. "I wish that I had a dozen more executives like you. I hope that Judy comes around. She's intelligent, but she's a little too soft. She needs to toughen up if she going to have a place in top management."

"Judy's tough. She just needs a chance to show it."

"You think so?"

"We called her 'Miss Bossy' when we were young because she was always bossing us around. As the oldest, Mother always left her in charge when she had to go out. She's up to the task of management, as are Mary and Susan. I think that because of my position with the lumber division and then the paper division, my assertiveness developed earlier, so they seem softer by comparison."

Grandma smiled. "Miss Bossy?"

I smiled and nodded. "We were small children."

"Next summer I'll see if I can find something a little more challenging for Judy to do." Grandma was thoughtful for a minute. "Maybe I'll test her supervisory skills in one of the mills. They're hard places at times, and that'll either bring her out of her shell, or show us that she can't do the job."

The tea arrived and we talked about the Textile division problems until it was time to go to the conference room for the meeting. Grandma again lambasted the executives with poor performance statistics and told them that Mr. Wickerham was only the first to go if they didn't shape up their operations.

I knew that their lunches wouldn't sit easily on their stomachs this afternoon and we left as soon as the meeting was over. Grandma took me to one of her favorite restaurants in Dallas and we had a great lunch. I wondered what it said about me that my appetite was fine. Of course I hadn't been the target of Grandma's wrath.

After lunch, Charles dropped Grandma off at the Dallas apartment and then drove me home. On the way back to the ranch Charles asked me about college and I told him about the courses that I was taking and about my first two years in Austin. For the first time I learned that he had graduated from Princeton.

"You're a Princeton graduate, and you're content to work as a chauffeur?"

"Yes. It's a good life. I took a part-time job, driving, while I was in school. I had lots of time to study in the car while I was waiting for clients so it worked out great. After I graduated I couldn't find a job right away so I returned to driving to support myself. I drove Mrs. Moore a couple of times and she asked me if I'd like to drive for her on a full-time basis. Her previous chauffeur had recently retired and she was using our agency temporarily. I accepted and that was that. I enjoyed the job so much that I never looked for another. I live in a mansion and get a terrific salary with full benefits."

"Don't you ever get bored?"

"Heck, no. I always have my books with me while I'm waiting. I love to read."

I had always appreciated Charles before then, but I hadn't understood him as well as I did now.

 

I finished up the new Piermont master plan on Friday. Like the first, it was intended to take us through the next five years. I had set our goals much higher than the first one, and fully expected that we wouldn't surpass them in our first year, as we had the last one. In the plan I included construction of a major new plant for forms printing, and expansion into other areas of paper processing such as formed paper products. I also included my intent to put a mini-computer into each of the two regional offices and link it with the mainframe in Brandon. I also hoped to upgrade the manufacturing operations to take advantage of new automation appearing on the market.

I put the plan into a large manila envelope to be sent to Nancy, my secretary in Brandon, for typing, and then I relaxed for the rest of the afternoon. The company plane arrived just before five o'clock, and for a change, it was me who went to greet Susan. The plane was already lifting off by the time that I reached the ramp and I helped Susan carry her things to the house. Ricardo had also come down to help and Susan gave him one of her bags to carry.

After Susan had washed up and changed, we sat on the porch and talked about her inspection trip. There weren't any problems that she could spot and things were moving smoothly. So far, she had completed about half of the inspections that she intended to do this summer, and the plane would be back to pick her up on Monday morning.

Mary and Judy didn't arrive home until after we had begun eating dinner. During the meal, Judy told us how tense things were in the textile division office building on Friday.

"Our manager was called into a conference this morning, along with all the other managers, and when he came out he was in the strangest mood. He worked through his lunch hour and was still there when I left tonight. Usually he takes a long lunch and is never there after quitting time. I also noticed that the manager's parking area was still almost full when I went to my car. Have you heard anything from Grandma, Darla Anne?"

"Grandma fired Mr. Wickerham yesterday. I was in her office at the time. Then she called in Mr. Edwards and laid down the law. Either the division improves or he might be next one leaving. During the executive meeting she laid down the law to the others."

"Really?"

"Really, but that's not for publication. Don't tell anyone at the office."

Judy got an indignant look on her face. "I won't tell anyone. At least now I understand the reason for the situation at the office. I bet that Mr. Edwards told all the managers that they might be the next ones out the door if things don't change."

"Might be. Mr. Wickerham lost his job because he couldn't fire the gin people that weren't performing properly. Firing non-productive workers may be tough but it's necessary for the health of a business. If you're not willing to do it, then you certainly don't belong in the manager's chair. I told you last week to be prepared for anything."

"You knew about this last week, didn't you?"

"I didn't know exactly, but I suspected that someone was on their way out. The numbers have been down for too long. Grandma had to take some drastic action and make an example to get people moving again. They had grown too complacent in their jobs. The fact that the managers are working late 'for a change' must mean that they got the message."

"Is this how you operate at Piermont?"

"No, but that situation is totally different. I've kept my executives involved and very busy with a rapidly growing company, where promotions, perks, and bonuses have been fairly frequent. Enthusiasm is contagious and keeping some of them enthused has helped keep the entire staff anxious to stay involved. Many of the regular employees at the various Piermont locations are grateful to still be working, or happy to be back to work, so they haven't become complacent in their jobs, yet."

"I think that I like your system better than Grandma's. Rewards, rather than the punishments, to keep people working."

"The system has to fit the situation. You know that Grandma pays good salaries to all her employees, so the rewards are always there. Mr. Wickerham knew what had to be done but couldn't bring himself to do it. That sent the wrong message to the people working below him and they lost respect for him. Once they lost respect, he lost control, and his effectiveness as a leader was gone. Any manager who can't dismiss an employee because of friendship has to go himself, or herself. Grandma had no choice but to take the action that she did. The other managers have a chance now to try and regain control. If they succeed, the company will come back. If they fail, then they'll have to be replaced by people who can gain control. The next few months may be a little unpleasant at times as the internal politics change."

"What's politics got to do with it?"

"Bureaucratic politics, not governmental politics. The message has to be that friendship won't stop reprimands and terminations. You know that we were able to acquire Appalachian Paper this year only because the family managers had run the company into the ground. If Edger Thorehill had removed the dead wood early on, the Thorehills would still own the company. The executives at your office have taken a positive first step by working through lunch and staying after the shift ends. You don't know this, but whenever I'm in Piermont I always arrive at the very start of the first shift and almost never leave until six o'clock. That's an hour after the shift has ended. I stay, even if I have nothing to do. I may only be reading trade magazines while relaxing on the sofa in my office, but don't think that my presence in the building goes unnoticed. No one is going to slap me on the back and congratulate my diligence, but everyone knows that I'm there."

"You're saying that you set a good example?"

"Exactly. What kind of example is set when a boss takes long lunches and never works late? Employees notice everything."

"Yes, I think that I understand. Who taught you all this stuff?"

"You know me. I read everything that I get my hands on. We have a dozen books on management right here in the library. I've read them all."

"You're too modest, Darla Anne," Auntie said. "Books can only teach theory. Some people are born leaders, while others will never be able to lead. But even great leaders may not make good managers. Management is a skill that people with some natural ability for leadership must work hard to develop. You've proven yourself to be a very effective manager."

"Thank you, Auntie. I do try."

"If your Grandmother can get her supervisors at the Textile division to try only half as hard, then the division will see a startling turnaround this year." Then, as if trying to change the somber mood at the table, she said, "I received a new movie today. Who's up for it?"

We waited until Rosa had finished with the dishes before starting the movie so that she could join us. We made a large bowl of popcorn to enjoy with the movie and brought in beverages. Ricardo was the first into the theatre and sat on the floor down in front, patiently waiting for the movie to begin. Susan loaded the first reel, I put on the second, and Mary loaded the third when it was needed.

 

(continued in part 35)

Author's note : I want to express my grateful appreciation to Teddie Sue for her proofreading help and story suggestions on this series.

 

 

 

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