I keep reading articles about people who take over dying companies and revive them -- turn them around, to use the lingo. The stories are in Fortune, Time, Venture, and a half dozen other magazines which write about corporate heroics. Smart, young entrepreneur puts together a leveraged buy-out of a company on the verge of bankruptcy. Smart, young manager closes one of the firm's three plants, discontinues unprofitable operations in the other two, limits product lines, lays off one-third of the featherbedding work force, and makes a bundle by selling the newly streamlined company to a larger one in the same industry.
It isn't working that way for us. My partners and I bought a company called Reading Industries six months ago. Ours was a leveraged buy-out. Our company was not merely on the verge of bankruptcy; it was bankrupt. We're smart and young, more or less, and we have three plants, too.
But unlike the mythical deal-makers in those magazines, we surely didn't know what we were getting into. We were consultants with entrepreneurial ambitions. We should be able to run a business; after all, we had been telling other people how to run theirs. This company was a bargain. Its principal creditor, a bank here, wanted desperately to avoid liquidating it. But even we sophisticates didnot anticipate the slowdown with which the workers angrily greeted us, and which brought me here.
So while my partner, president of the company, runs the business, worrying about sales, margins, hovering bankers and the Environmental Protection Agency, I am managing one of the plants in Reading, a depressed city with 14 percent unemployment. I don't want to close a plant or fire people. I certainly don't intend to sell the company. And I find that the whip-'em-up, shape-'em-up management being glorified right now in the business schools and the business magazines is utterly inconsistent with the needs of the battered employes of "The Tube," as our plant is known, because we make copper tubing.
One of the millwrights here sometimes comes to work in costumes. False nose, false glasses, a homburg, and a shirt with "FOOL" written on the front. "I'm a clown," he says, "a fool to work here. I might as well look the part."
The culture of this company, to borrow another theme popular aong those currently writing about business, is one of self-hate. It just won't tolerate a quick turn-around. The employes won't have it. Many of our workers have been here since the plant opened in 1969. They have been part of a long, slow deterioration of a company which apparently was once truly the envy of the other workers in the city. "You had to know somebody to get a job here," someone tells me at least once each week. Now the employes are hostile and distrustful, wisely suspicious of cures and promises.
One of the hooks fell this morning. There are 110 hooks which move slowly around the plant, each carrying an 870-lb. coil of copper. The hook fell, the coil fell. Mercifully no one was killed. But I learn that the hooks, which used to be checked for structural weakness every couple of months, have not been checked for a year.
The Tube was built 14 years ago. Fourteen years, four owners, nine plant managers. Four profitable years, and 10 losers. This company was owned for years by a family which took pride in the craft. The old man died, and the son took over. He died, and the son-in-law managed the business. It passed to a family friend who sold it to an owner who couldn't make the business work.
His were the grand ideas fashionable in big-business circles -- increasing market share, divesting marginal operations, expanding rapidly. As employes watched, several million dollars were squandered by hired-gun engineers on feats which turned out to be useless to the company. Good employes were punished for protesting the waste. The workers of this plant were encouraged to share the goodies. Finally, they concluded that cheating was fair and honesty stupid, and the company was wrecked.
Of course the economy didn't cooperate. This company is dependent on the housing market; and as everyone knows, the housing market has hardly been the mother of prosperity. But it wasn't really the economy that killed the company. It was the management of the company that killed it.
What is left are worn out plants which only years of profitable operations can restore. We are impoverished. We are polluters, and can correct our environmental offenses only slowly because we can't afford the millions which will be required. Money is the issue. Machinery breaks down every day. Office workers must cover their desks at night with plastic because the roof leaks. The plant is filthy with grease, floors caked with hardened oil; and everywhere coffee is thrown against the walls and cigarettes and paper are thrown on the floor by people who don't care much about the condition of the plant or the company.
Why should they? They were promised profit sharing, but there were no profits. They were given a pension plan, but -- as as common before passage of the pension act of 1974 -- it wasn't funded. They were told that their company would dominate the market, but it narrowly averted liquidation. Then we who wanted to buy the company coerced them into a pay cut we believed was necessary.
They are angry, but they work; perhaps not at full speed, but they work. And in spite of themselves many of them like the place. Brownie has a refrigerator next to his machine, and sometimes he brings three or four of his sister's pies to share with anyone who happens to come along. Cadillac, whose job is to drive a little truck around the floor, stops shortly before break time, and pulls a hunk of wood against a grey electrical cabinet. There he peers over the edge of an electric fry-pan and cooks catfish or gizzards (in lard).
But what am I doing here? The last thing I managed was the Oberlin College Mock Convention. A committed Washingtonian, an organizational consultant, here I am in this violent, gross, noisy building larger than a football field. In the winter it was cold here; people beat their hands to keep warm. Now the temperature rises to 115 degrees, the ugly smoke stays in the mill, and oxides settle on the skins of all who work here.
I am here trying to touch the remnants of humanity, teasing the big men who cook hamburgers on top of their machine 30 feet in the air, laughing at the men who use the public address speakers of the plant to demand attention to their problems.
I am a politician holding office, but spending all my time with the constitutents. I am a worker priest making pastoral visits all day long. I am a social worker, a marriage counsellor, a trainer, a teacher.
I am called on the telephone Friday afternoon by a man who operates one of the largest machines in this plant of heavy machines. He wants to complain about maintenance. I take notes on his complaints; after all, he knows the machine. Although not all the problems he mentions are important, they are all real. When he finishes, I say, "Alright, I'll speak to maintenance, and see when they can get to these."
Silence. After a few seconds he says, "I guess I'll come to work tonight."
"You weren't planning to?" I ask him. He tells me he expected me to say "what every other plant manager has said" when lists of complaints like his were delivered. "Run the machine anyway," is the reaction he expected. Telling him instead that I'll get to work on his problems seems to make him feel he ought to work, too.
The furnace crew complains of gas escaping. I go to smell for myself. Before going, I call the maintenance manager, saying jokingly, "If I'm not back in 15 minutes, come get me." It's not funny in a plant where two people nearly died a few years ago because of carbon monoxide poisoning; it's no joke today because the smell of gas is strong.
The maintenace manager comes out with a flashlight. The foreman is on top of the machine. We sniff and poke, looking for a leak, and feel slightly sick. We call the gas company, and an arrogant man comes with a meter. The crew refuses to work. Althought I am angry enough to send them home without pay, I contain it, and assign them to other jobs for the rest of the shift.
I am everywhere in the plant, from 5 or 6 a.m. when I meet the last hours of the night shift until 7 or 9 at night -- poking, asking questions, inspecting, encouraging. A machine breaks down, and I go out to check the progress of its repair. A worker needs a few hours off to deal with marital problems. A maintenance foreman is upset about the attitude of production workers. Someone's pay check is too low by $1.21. A shipment comes back from a dissatisfied customer. The environmental consultant wants to talk about progress in cleaning up our seepage. A formerly hairy worker wants to show off his cleanly shaven self.
I am spending most of every day trying to persuade people to whom all this is routine that it is not routine at all. I am really trying to convince them that this time it will be different; but I can't say that. They've heard it so many times before from all the previous, discredited owners.
Besides, they believe that we are hot, rich entrepreneurs from the big city who bought the company when it was bankrupt, forced them to take a pay cut, and negotiated an 18 month contract with a weakened union. After 18 months, they believe, we'll take our profits, sell the company, and move on to some other acquisition.
They believe that because it's what others are doing, and because they cannot believe that anyone would want to own this company just because it is a good company in a good business. They are so contemptuous about the company and so angry with themselves for being here that they cannot believe in the judgment of people who would buy the company simply because they want to run it.
Why, if they hate the company so much, people ask me, do they continue to work there? Because there are no jobs in this city. And because only Ronald Reagan, as far as I know, believes that people "vote with their feet" by moving from the city in which they have grown up, leaving their roots, to move to Los Angeles or Houston or some other alien planet where they can live in relative prosperity but absolute unhappiness.
The people I know here decided to stay until the final judgment because "I've been here sine I was 17;" because, "There weren't any jobs to go to;" because, "I'm too old to find another job;" because, "I'm used to being here and this is where my friends are;" because, "I thought I'd stick around and see what happened."
It is that stubborn, even perverse attachment to the company on which I am trying to build now. We're in a contest. We're trying to give enough hope to the people in the company so that they will work hard enough to keep the company in business until the economy improves.
So we revive old traditions discontinued in recent years: the summer picnic, the Christmas gift baskets, the Easter Egg roll. We rename the golf tournament which used to honor an owner, to be held now in the memory of a fine employee who is vigorously remembered at the Tube.
But all the good intentions and good deeds don't keep the neglected machines from breaking down; and every breakdown means loss of production. The furnace is out for a shift today; the gas leak must be stopped. The hooks are being repaired one by one; nearly two thirds of them are worn. Everything in the plant is decrepit.
The chairman of the union's grievance committee comes to see me every day. He's a stocky man, a gentle, worried soul who always werars a hat to hide his balding scalp. When he walks slowly across the floor, he takes out of his back pocket a napkin which he carefully unfolds. He stops at the coffee machine outside my office, buys himself a cup of coffee, pokes his heada through my doorway, and asks gently, "Have you got a minute?" Then he sits down and unloads that day's treasure of complaints and comments.
I'm doing all the modern things advocated by organizaational consultants and business magazines. But still people are terribly unhappy. They seem to think I'm a nice man and they are immpressed that an owner is here with them spending as much time as I do. They like some of the strange management methods I use. But nothing makes any real difference to them except money.
They're right. The Tube is a filthy dark cavern, noisy beyond description. The work is purely repetitious and very hard. No one thinks about variety and intellectual stimulation, social contribution, and the other themes of my former lives. Here people think about their weekends, fishing trips, deer season, sex, beer. They worry about having enough extra money to rent a tux so that their sons can attend high school graduation without shame. There is truly no reason to work here other than the need to make money.
But we are not paying people $17 an hour or anything like the exalted wages of the malaigned steel and auto workers. No one here is earning $30,000, not even the top managers of the company. The workers in this plant earn a minimum of $5 an hour and a maximum of $8.16. That means, after withholding and car payments, a take-home check of $180 a week. And that's why men will do battle over a job which pays 23 cents an hour more than the one they hold.
People believe that the economy of this city is going to improve soon. So last month many of the millwrights and electricians applied to the few companies in the city that pay people more than we do. I suppose some would say that the free market is at work; it is as it should be.
But those who applied elsewhere include the president of the union who has worked here 13 years, an electrician who has been here 18 years, and one who is in his 30th year. The latter told me (on one of those rare occasions when he would speak to me), "Sure I'm putting my papers around. Wouldn't you? I've been here 30 years, and I can't afford to buy things for my family. Now, since you cut our pay, I'm going to have to sell things just to keep going. I don't want to stay here."
Joe did quit last week. He got a job at the brewery which pays $9 an hour, $1.06 more than he was making here. Some one in the mill yelled to me that night, "That's one for our side." I made a face, and he asked, "Aren't you happy for him?" The people I admire, I told him, are the ones like Stanley who say, "I've been here 17 years. I might as well stick it out for six months to see if you guys are for real."
I do like Stanley, but I don't really blame Joe. In six more months, we'll have to begin contract negotiations. If there is no money to finance major wage increases, all will be lost here.
We're really doing wonderful things. We're hiring back to the company people who have been laid off for two years. It is one of the most satisfying things I have ever done, to interview for rehiring a man whose supplemental unemployment benefits had run out, whose handicapped son is in a home, whose wife died last year, and who has no job. When we brought back to work a young man whose father also works here, the father told me, "My wife's happy. My daughter-in-law is happy. And my son! Nothing can make me angry today."
Still all that counts is money. We can't give it. We don't have it. It is impossible to motivate people here for very long without money.
What counts now is the willingness of people in the plant to give us enough time to turn the conpany around. That's why I manage the plant like some one running for office -- to buy time until the economy improves.
One of the angriest people in the plant came into my office the other day, and closed the door. After a few minutes of meaningless talk, he asked, "Are you leaving?" I said, "Do you want me to?" For several moments, he looked at the floor and rubbed his substantial forearms.s heada Finally, he said with a smile that was almost pain, "You have your ways. I don't understand you, but you have your ways."
I won another vote. That's the way I measure progress here. Two of the superb machine operators in the plant agreed to become foremen. Both are known as outspoken, tough men, the kind who would not become foremen before.
We produced more last week than we have produced in any week since I took over. One of the machine operators did more work than he used to do when he was paid by piecework production.
These are the measures of my life now; and when people in Washington (where I spend most weekends) ask me what kind of a week I had, I think about how much production the plant did or how much time was lost in machine breakdowns.
If we fail, most of the people in this company won't find other jobs. Many are too old to be employable. Most have no skills interesting to the job market. So if this company goes down, most of the people here will go down with it.
They are not nameless contributors to my bank account. They are real people; The shop steward who, in his 34th year here, is still with the company only because he loves being a leader in the plant; the plant prince whose special status is an outcome of his extraordinary skill with his machine; the characters of the plant -- Dirtball, the man who loves to clean; the unyielding, sullen electrician who stalks the plant; the men who balance lives between their wives and their "girlfriends;" people who, as one of them said to me not long ago, "don't want very much out of life."
That's what I don't understand about the company-saving efforts I read about in the business magazines. The people doing them, the tough men "turning companies into cash cows," playing tax games, writing off losses and laying off people must live in worlds entirely different from the world I am in.