How many 'Covers' have experienced a buy out or a merger?

[Jim Howe]

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?

[SteelWoman]

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.

[Govind]

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.

[Randy]

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)

[Bill Pflanz]

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

[Claes Gefvenberg]

Originally Posted by Jim Howe

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

[AllanJ]

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.

[Mike S.]

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.