How many covers have experienced a buy out or a merger? I have been through one in the past and found nothing good came of it despite the flowery promises of the new CEO. In fact, I read a few weeks ago, that the company that bought my old company is now on the verge of bankruptcy. Of course many lost their jobs under the term "synergysium" (hope I spelled it correctly) which appears to be a term to mean "sucking out the life blood of the company and disposing of the remains".
I am now entering another buy out. It was announced just yesterday that the company has been sold.
What experiences have you had with such maneuvers? What impact has it had on your life (job, pay, benefits)? Any impact on established quality programs?

Jimbo, I'm in the thick of one, but in our case it's a "partial buyout," with a competitor buying MOST of what used to be "our" company. We went from having about 260 employees down to a company of only about 75 people. There's stress enough to go around on BOTH sides of the buyout, from the employees like me who stayed with the company and those who went with the company that bought out a large part of the place. Grass isn't real green on either side right now, and every week brings more people turning in their notices. It's difficult to tell how much of this is just "transitioning" pain and how much is a sign of worse times to come.

My sister works for an industrial coating company that broke away from the company she USED to work for. That original coating company went through 4 different buyouts over 6 years! They're now on the verge of bankruptcy. Sounds like your experience with buyouts.

Whenever Merger, Acquisition happen, there is also considerable stress and strain in the Quality functions.Intent is to achieve synergism of the strength. Unfortunately some merger and acquisitions happen to just to prevent the other becoming a threat to the existing business. This is a survival game.

While the entire focus is on the getting the merger and acquisition done, Organizations may not pay enough emphasis to do due diligence that cover the Quality Management systems as well. This will put a lot of stress on the Parent Organization to absorb all the Quality issues,liability along with the M&A.
Quality issues range from (but not limited to):
Previous field returns rate and Quantity in the field- Cannot plan return rework as this may vary drastically,
Lack of Quality records and no traceability to products on the field- will be in trouble during recall,
Lack of end of life cycle planning on the products acquired with the M&A- Unprepared for the transition,
Legacy Product issues that were never documented and corrected- No knowledge to correct the field returns and reliability issues,
Hidden Rework Cost -(as M&A folks may be impressed with the high yield and it turns out it is not their First pass yield)
Specialized "patented" process that are held secret by 1 person in the Organization,-what if he/she wins a Lottery?
and more..

My point here is during M&A both organizations should look more than direct financial impact. A thorough due diligence by a season Management Auditor is strongly recommended.

Regards,
Govind.

I was with Lockheed when the Martin-Marietta merger happened. We all saw the stock split 3 times in a short while and experienced some re-vitalization of the company. (Norm Augustine made about $60 million in the deal)

I am also in the midst of a merger. The resume postings could not have come at a better time since I want to review mine again. I will need to find another job within the company by the end of the year or its out looking again.

Mergers have an uneven impact on lines of business, departments and employees. Some lose out totally, some get mixed in with the merged company but at reduced size and some survive okay. If the quality department goes than there was probably no real interest in it anyway. Engineering, Training, Purchasing and other staff groups usually get hit hard too.

I remember seeing a statistical study done on mergers. It was determined that companies that go through mergers generally perform worse than their peer groups in profit, ROI and stock value over the long term.

Bill Pflanz

What impact has it had on your life (job, pay, benefits)? Any impact on established quality programs?I have been through a number of these situations, and they have always impacted all of the above to some degree. Sometimes good, sometimes bad enough to make me jump ship...

/Claes

I have seen a number of M&A's of clients. In every case, the maxim has been "to the victor go the spoils". The acquirer generally shakes out staff of the acquired company and puts in its own "trustees" in key positions. The culture of the acquired is often viewed as inferior - after all if it was so good, how come THEY are the ones being acquired, is the argument - and is (therefore) dismantled or undermined. And quality always suffers because of the insecurity felt by the acquired's people, fearful for their jobs. Good people tend to see the best positions higher up are more likely to be filled by the acquirer's people, that their career prospects could be in doubt: so some inevitably leave.

A good M&A considers carefully how to avoid these situations - but they are more the exception. I recall there was an article in Barron's several years ago discussing how M&As are planned carefully before they are started. I think they said Cisco was good at effectively managing their take-overs, but I am not sure.

Whatever - they are never 100% happy events. Synergy often turns out to be a euphemism for "downsizing" - and guess who generally ends up the smaller.

Been there, done that. In my personal experience, if you are the one being bought you are gonna get screwed. I know that is not always the case, but it has been for me. Pay, benefits, employee satisfaction, quality, and company performance has always suffered in the end. Hope it is different for you.

I was with Lockheed when the Martin-Marietta merger happened. We all saw the stock split 3 times in a short while and experienced some re-vitalization of the company. (Norm Augustine made about $60 million in the deal)

If I remember correctly it all started when Goodyear Aerospace Corp. (GAC) was owned by Goodyear Tire and Rubber. A wealthy finacier from Britain (Goldsmith, we called him Goldfinger) raided Goodyear. Goodyear paid him $93 million to go away. To finance this 93 mil they sold GAC to Loral and it became known as Loral Defense Systems. The Arizona and The Wheel & Brake division's were spun off as the CEO's private portion. Defense systems went thru the "synergy" thing and thats when I lost my job. Eventually Martin Marietta bought out Loral Defense Systems and shortly after that Lockheed and Martin Marietta merged. It is now known as Lockheed-Martin. Whats left of the original Loral corp. is what I understand to be in Bankruptcy. I am sure all CEO's made several Fortunes along the way. As for me I was 'synergized"! :nopity:

I have been through a couple of buyout. Neither was good for the employees at the plant.
I'll never forget the first buyout I experienced. I had worked for that company for about 17yrs. and was looking to make a move into the auditing area of quality. Well an auditor left and I was told he would not be replaced. So there went that chance. Then a short time later our CEO told us we were in good shape and he wouldn't compromise all the principles the company was build on as long as he was there. A couple of months later I got a job at a different company and within that month our CEO left to start a new company. :bigwave: How was that for a confidence builder for all that remained? :ca:

Mooser

I've been through two of these acquisitions with smaller mfg companies. I was in a quality management position for each time. There were big impacts within a short time frame, about half of them positive. The negatives were things like loss of seniority for vacation, and changes to some benefits like insurance and 401K.

However, when profits started to decline in 2001 for one of the companies, the CEO quickly cut improvement initiatives that were not deemed imperative to survival. As you can guess, several quality improvement initiatives were scaled WAY BACK. That burst my bubble, and certainly reduced the effectiveness of my job. I did all kinds of financial analyses to try to get the funding back, but was told we only had money for "blocking and tackling". If I ever hear that term again, I will probably have to sign up from primal scream therapy!!

My advice: always be ready with an updated resume and call all your favorite headhunters and tell them to keep their eyes open for you!

Count me in on the list of members who have been through a buyout. AK Steel purchased Armco in 1999. I was managing a mechanical testing laboratory within the mill independently certified to ISO Guide 25 and also functioning as an internal lead auditor. My immediate supervisor retired within a year of the buyout. They replaced him without putting the job up for internal bid as required by the HR procedures. After one year, it became apparent that they were interested in establishing an adversarial relationship with the local union - it had been fairly collaborative, and of finding a scapegoat for any problem that arrose. With the tenor of the change firmly established, I polished up the resume and emphasized the quality assurance aspects of my experience and got a job with an iron powder producer as a QA engineer for a greenfield plant. I've heard nothing but negatives from anyone I've talked to who still works at the plant, or wh has friends or relatives who work at the plant.

Been through them myself. In one case, I lost my job due to downsizing - granted, it was all I could not to skip out of the building, laughing hysterically at my good fortune.

In the more recent case, it has broadened the scope of my responsibilities, allowing the me opporutnity to work with my counterparts from North and South America.

It can be frightening as it often feels like the right hand and the left don't know what the other is doing, but it can also be amazing to watch as almost-dead companies come alive, like a pheonix rising from the ashes.

Our VP showed the psychological chart of employees after a merger and pointed out where he thought our facility was...we promptly took his finger and moved it down and back a bit. We weren't as "happy" or "adjusted" as he thought, but we were well on our way. All members of new family are still shifting, trying to figure out what the end result of our recent mergers will be...never a dull moment. But, our Customers are still buying from us...are complaining less...and we're making money...so the whole merger idea can't all that bad.

Well, our new owners have held two meetings with us to date. The following changes are noted in benefits.
a) Hospitalization-stays the same until Dec. 31, 2004 will advise!
b) life insurance is dramatically increased to annual salary(was $15000)
c) 401k is immediately 100% vested (was a 6 year plan)
d) Company contribution is increased to 3% of employee contributions up to 6% of employee contributions. (was capped at $500).
e) long term disability at 60% of salary till age 65.

These changes are welcomed by most employee's. The new owners seem to be going out of their way to achieve a smooth transistion. So far i must applaud the new owners! :applause: I hope the honeymoon doesn't end!

Jim, Thats great, my experience is it usually goes to the negative side.
Glad things are better.

Further update:
The new owners have offerred each member of the Executive team a new contract. All but one has accepted the terms. The one refusal was the CFO who was offerred a promotion but had to relocate, he refused. another promotion into the new company was accepted as Exec. VP.
This plus the benefit package posted earlier has given us all hope, but I must admit there are those of us waiting for the other shoe to drop. On the bright side so far all is positive!

My employer, a surface mount electronic manufacturer, was bought by the competition in 2001. They promptly closed the plant and over 800 workers were let go. :( I left during the first round of layoffs about a year before the closure.

My employer, a surface mount electronic manufacturer, was bought by the competition in 2001. They promptly closed the plant and over 800 workers were let go. :( I left during the first round of layoffs about a year before the closure.
Jennifer, how sad! :( Did you ever determine what the competition wanted that caused them to pay so much money for? Patents, Copyrights, Technology? Just curious.

I have been informed that the new division manager will meet with me in a few weeks to discuss our current QMS and how to blend LEAN into it! This may prove to be an interesting meeting. We have worked on our QMS for about 2-years now and are currently in the thick of internal audits. Our original plan was to become ISO! Looks like that is now in a holding pattern.

I have been informed that the new division manager will meet with me in a few weeks to discuss our current QMS and how to blend LEAN into it! This may prove to be an interesting meeting. We have worked on our QMS for about 2-years now and are currently in the thick of internal audits. Our original plan was to become ISO! Looks like that is now in a holding pattern. They aren't mutually exclusive!

I have been informed that the new division manager will meet with me in a few weeks to discuss our current QMS and how to blend LEAN into it! As Al says, not mutually exclusive. This could be a great opportunity

for you to be in on the ground floor of something exciting
for the merged company to pick up a few steps on the competition.

The important thing is to ensure Division Manager is really willing to buy into "blending Lean and ISO." You've got a couple weeks. Time to start boning up on lean! Don't hesitate to ask questions here in the Cove as you go along.

I envy you the thrill of being in on something cutting edge and pray that "Lean" is not "double speak" or "gobblespeak" code for "bloodletting of employees."

Went through 2 mergers with the same company. When I worked for Chemical Bank they merged/bought Manufacturers Hanover, my job was not affected, then when Chemical and Chase joined at the hip our whole center was shut down as they could do it "cheaper" elsewhere only to have it all transfered back to the area about 2-3 years later. I was actually happy it happened as it forced me to get out of Banking and in to the wonderful world of medical devices. :bonk:

How about a military base closure - does that count?

It's sort of like the head office deciding they want to close 5% of all plants and these are the places we're going to volunteer for the experience, thank you very much - and you found out about it on the evening news. Film at 11. To placate the congresscritters they go through a show of allowing the "volunteers" to present data and arguments as to why they should stay open and some other volunteer should close instead. It's futile, of course and everyone knows it, but it's lots of fun to gather all kinds of data to throw at a moving target and then see it vanish in the abyss of pre-ordained bureaucracy.

When the base I was at (Charleson Naval Shipyard) closed, we were fortunate to have a commanding officer who believed that "total quality leadership" starts with personal Leadership - and he walked the talk to the extent of actually teaching many of the quality management classes. (As I have mentioned in other places, when the big boss is teaching the class, you truly believe it is important to him/her!) Once the descision to close was final, his attitude became "OK, folks, now we're going to do the best **** quality job that has ever been done of closing down a major Naval industrial and nuclear facility." It was done ahead of schedule, under budget, and most importantly to the workers ...

Every civilian worker who wanted another job got one - either a transfer to another government activity or a job in the private sector.

Once the schedule was set and there was no more major work coming in, it officially became the main job of each worker to find another job, including getting any necessary training or education for it. The main responsibility of every manager was to mentor and help their people find other jobs. WOW! I had never heard of such a thing before -- or since.

Anyway, just one person's experience of something that might be similar to a merger or buyout.

Our original plan was to become ISO! Looks like that is now in a holding pattern.They aren't mutually exclusive!Exactly... It may even make your task less daunting, and will probably be beneficial in the long run. As Wes says, you have a couple of weeks to prepare. The key is that he said he wants to discuss it. If that holds true things should work out well.


And Jim: Good luck :agree:

/Claes

One closing and one merger.
The closing was a small oil field mfg. for which I was a design engineer. They had been in business for 50 years prior to the shut down due to the '83 energy "crisis".
The merger happened when Arvin Industries bought out Purolator,an automotive filter manufacturer. Six months after they decided they didn't need the Tulsa, OK plant.
And I was off looking .... again.

I've been through one outsourcing and one closure.
In the outsourcing we were offerred a pay reduction and graveyard shift hours (pay reduction even with a shift differential) in another department or we could quit. You could not apply for unemployment benefits because they had offerred you a position. No layoff, no effect on their bottom line, it's just (forced) attrition as our jobs wandered off to Chile.

On the other hand, I worked at a small start up that ran out of money. That was a lot more emotionally draining, because you didn't have an opportunity to get mad before you looked for another job.

LSL

:topic: Graeme, just a quick side note. I was in Charelston/Mt. Pleasant area back in June for our 43'rd USS Independence CVA-62 (Interior Communication Electrician's) reunion. We found the experience to be extremely pleasant, visited Patriots Point, walked the surf at palm beach and we even hugged a few palm trees!
What a great place! Thanks for the reminder! :thanx:

My understanding of the buyout is this. NEP (Norwest Equity Partners) bought out ATI (Attachment Technologies Inc). NEP (bankrolled by Wells Fargo) authorized ATI to corner the market for attachments in the heavy construction industry.

ATI purchased Badger and then C&P. My company, JRB Co. was then purchased. These three companies now form a new division of Paladin Brands. Paladin Brands also owns other companies and is continuing to look for new acquisitions with a war chest valued at $1.2 billion!

My company is now known as JRB Attachments LLC. The whole concept is to present "ONE STOP SHOPPING" to the heavy construction OEM's. The OEM's that have been introduced to the concept so far seem to be in love with the idea!

Meanwhile growth at JRB Attachments continues to be above the bar.

As Al says, not mutually exclusive. This could be a great opportunity

for you to be in on the ground floor of something exciting
for the merged company to pick up a few steps on the competition.

The important thing is to ensure Division Manager is really willing to buy into "blending Lean and ISO." You've got a couple weeks. Time to start boning up on lean! Don't hesitate to ask questions here in the Cove as you go along.
I envy you the thrill of being in on something cutting edge and pray that "Lean" is not "double speak" or "gobblespeak" code for "bloodletting of employees."

Thanks Wes, Good advice! I spent the last several weeks reading all I could on Lean and its tool bag. It proved to be beneficial in todays meeting with both corporate and divison managers.

From where I sat I gleaned four things.

1) Lean is a life time journey of common sense changes towards continual improvement.

2) Because Lean champions continual improvement it fits write in with any good QMS or ISO.

3) The QMS that we have been developing for the past two years will be used as a model for the rest of the divisions in the company.

4) Absolutely and positively no lost jobs as a result of Lean implementation. The plan is to redeploy through growth!

It was a good meeting. Next on the agenda is the training called Lean-101.

3) The QMS that we have been developing for the past two years will be used as a model for the rest of the divisions in the company.

4) Absolutely and positively no lost jobs as a result of Lean implementation. The plan is to redeploy through growth!That sounds absolutley brilliant, and must be considered a good pat on the shoulder. Good luck on the continued journey :applause:

/Claes

On Nov. 16 I completed the Lean 101 training. It was presented by CAMP out of Cleveland, Ohio. It was an excellent presentation consisting of:
1) lecture
2) visuals
3) hands on simulation
4) coaching
As we went through the course the instructor repeatedly stated or implied things like Customer Satisfaction, Continuous Improvement and make a Profit. In fact, If I had not known better, the same author that penned our QMS penned this presentation.
I see Lean Concepts complimenting our QMS on many sides and have reported same to my executive management. In my opinion it would certainly qualify as "objective evidence" of managements commitment to continual improvement (part of our QMS).
Lean 101 has been taught in 5 of our divisional plants so far. Some have actually begun some 5's events with good results.
It is my understanding that next up on the training table will be Value Stream Mapping (VSM).
I do wish to thank the covers for their heads up and their professional inputs to this buyout. I am convinced these people are serious about quality and lean and am looking forward to the next installment. :)

Seems like you feared getting a load of manure, but ended up smelling like roses.

Congratulations!:applause: Deming might be proud of this outfit!

Seems like you feared getting a load of manure, but ended up smelling like roses.

Congratulations!:applause: Deming might be proud of this outfit!

Exactly Wes! I might add the training was superb. We had four sessons of simulation (we were making electronic boards two varieties red and blue)

in the first sesson. our 21 manpower workforce was extremely bad.

1) we failed to make any red boards at all and all deliveries of blue boards were late
2) quality was very poor with many boards rejected for test failure.
3) stress was very high
4) the floor was in chaos

As we progressed through each session applying the lean tools as we learned them, things got better

The fourth sesson was a bonanza as we completed a Pull-Kanban manufacturing the same boards. The results were mind blowing!

1) We reduced manpower from 21 to 13.
2) reduced floor space from 1250 sq. ft. to 210.
3) completed the entire production in 10 minutes instead of the allotted 20.
4) every delivery was on time, no lates.
5) quality was up to 100%

I call that continuous improvement. :)

Any one contemplating a continual improvement strategy should look at lean and apply the tools. The best part is it seemed like common sense was working overtime.

Yep! Deming used to love the "AHA!" moment when suddenly folks would experience an Epiphany. For some, it really was like "a meeting with the Creator."

I was with a small consutling company when we were "bought out" by a hugh international firm. From our standpoint, it was not a buy-out, but something closer to assimilation by the Borg, "Resistance is futile"! Some bailed, others are still there after 6 years. As for me, they really didn't have a good place for me. They tolerated me and actually allowed me to look for another job on their time (I even had a project number for it).

The biggest differences was the culture shock. In the first company, the owners knew me by name. They knew my wife, my kids, etc. With the second company, we all had to make sure our ID cards were visible. If not someone would surely question you as to why you were in their building.

Glad I'm still not there!

I am also in the midst of a merger. The resume postings could not have come at a better time since I want to review mine again. I will need to find another job within the company by the end of the year or its out looking again.

Bill Pflanz

I wanted to update my fellow Covers on my posting about finding another job by the end of the year. I have been applying for internal jobs and interviewing since August. It has been an interesting journey but a successful one. I will be taking a new position within the company next week.

The job is Process Manager which may not have quality in the title but the job description includes problem and root cause analysis, performance measurement, process design and improvement and statistical data analysis. As many of you know by now, I have a diverse background (I have described it as a jack of all trades). The new job will be a first for me since it will be process improvement in an IT group. Although I have worked with IT many times over the years, this job will be my first opportunity to be directly involved with improving IT processes. I will need to use all of my previous knowledge since it will be making sure that we satisfy internal customers but also have effective systems in Purchasing, Financial Approval, Project Management and Resource planning so that projects are completed as efficiently as possible.

As a side note, my ISO 9000 background and Six Sigma black belt helped in securing the job but I still had to sell myself in the interview. Talking about what I did in the past was useful but much of the conversation was about what I could do for my new manager that was most important. Reading the postings on resume writing, job applications and interviewing techniques were useful while I was going through the process so thanks for everyone's contributions.

Bill Pflanz

I wanted to update my fellow Covers on my posting about finding another job by the end of the year.

I will be taking a new position within the company next week.

The job is Process Manager which may not have quality in the title but the job description includes problem and root cause analysis, performance measurement, process design and improvement and statistical data analysis.

As a side note, my ISO 9000 background and Six Sigma black belt helped in securing the job but I still had to sell myself in the interview. Talking about what I did in the past was useful but much of the conversation was about what I could do for my new manager that was most important. Reading the postings on resume writing, job applications and interviewing techniques were useful while I was going through the process so thanks for everyone's contributions.

Bill PflanzGlad to learn it's working out, Bill. Tell us more over in the thread about resumes and job hunting (http://elsmar.com/Forums/showthread.php?t=10169&highlight=resume) Resume and cover letter - how good is yours?

I'd be especially interested in learning how you secured the interviews in the first place. Was it a lock because you were an insider? or did you have to go through gatekeepers who decided to grant or deny interview based on your resume?

That's great, Bill. I'm very happy for you! :agree1:

Today, at our new monthly communications meeting the new company announced an incentive program (looks like a profit sharing program)! I am quite taken a back with the companies forward looking plans such as this. They explain that in order to obtain and maintain employee co-operation they felt this incentive program (awarded every quarter) would spur the effort faster.
Might I ask if any other covers have a profit sharing or incentive program? If so, what do you think of it?

We have bought out 5 companies in the last 7 years!!

Today, at our new monthly communications meeting the new company announced an incentive program (looks like a profit sharing program)! I am quite taken a back with the companies forward looking plans such as this. They explain that in order to obtain and maintain employee co-operation they felt this incentive program (awarded every quarter) would spur the effort faster.
Might I ask if any other covers have a profit sharing or incentive program? If so, what do you think of it?

We have a "piece work" process tied to production and quality output. WQe also have a year end bonus tied to profits.

I wanted to update my fellow Covers on my posting about finding another job by the end of the year. I have been applying for internal jobs and interviewing since August. It has been an interesting journey but a successful one. I will be taking a new position within the company next week.

The job is Process Manager which may not have quality in the title but the job description includes problem and root cause analysis, performance measurement, process design and improvement and statistical data analysis. As many of you know by now, I have a diverse background (I have described it as a jack of all trades). The new job will be a first for me since it will be process improvement in an IT group. Bill Pflanz


Another update on my job. As it turns out, the job was not as promised. Rather than try to make the best of a bad situation, I was able to take my original termination agreement and March 11 was my last day.

Now that I am semi-retired, it raises an interesting question. If you had no significant financial pressures, what would you do if you could do what you want?

Personally, I am open to suggestions except for going back to corporate life.

Bill Pflanz

I'd open a coffee shop so I could finally catch up on all the local news that I've never been able to follow while working full time. ya know? all those old gents that gather at the Duck Thru every morning to swap tales?;)

Bill,

I've given this a lot of thought and I will do the following:

Volunteer in my local town government. Possibly run for some office.
Audit on a part-time basis
Join a golf club
travel some
Remain on the board of Section 111 of ASQ
Spend more time with my kids and their kids (if that's possible)

Gerry

Another update on my job. As it turns out, the job was not as promised. Rather than try to make the best of a bad situation, I was able to take my original termination agreement and March 11 was my last day.

Now that I am semi-retired, it raises an interesting question. If you had no significant financial pressures, what would you do if you could do what you want?

Personally, I am open to suggestions except for going back to corporate life.

Bill Pflanz

Well Bill one thing you can continue to do is to "PAYBACK" (give back to the quality group here at the cove); something you have been doing all along! I certainly appreciate your contributions and sure hope you continue. That having been said, I would personnally travel to all the great fishing spots in the world, lean back, and cast out a line! I am told that the time you spend fishing is never counted against you!
Thanks for sharing! :applause:

Well Bill one thing you can continue to do is to "PAYBACK" (give back to the quality group here at the cove); something you have been doing all along! I certainly appreciate your contributions and sure hope you continue. That having been said, I would personnally travel to all the great fishing spots in the world, lean back, and cast out a line! I am told that the time you spend fishing is never counted against you!
Thanks for sharing! :applause:


Thanks Jim. I plan to visit the Cove on a regular basis. It may be hard to believe but I have never really fished much. When I was growing up, we spent most of our time playing football, baseball, basketball, or almost any other ball game you could think of. The local creek was too polluted to fish or swim in. Maybe I should give it a try.

Bill Pflanz