by Brian Haig
“That’s it? Only ten percent?” Walters growled, as if that were nothing.
“Christ, Mitch, most are in very low-margin businesses. Ten percent is crushing. It virtually wipes out any chance of profit. They’re all in survival mode.”
Walters peered thoughtfully at the slide for another moment. All told, there were 120 suppliers spread across six slides, but he seemed fixated on this one. “You know what you need to do?” he eventually announced, tapping his broad forehead as if the idea had just come to him.
Yeah, find a new job where I don’t have to answer to a bullying prick like you, Dyson was tempted to say but obviously didn’t. “Not a clue.”
“An example, that’s what we need.” Walters raised a finger, shut his eyes, and brought the digit down on an apparently random target. He opened his eyes and bent down. “Arvan Chemicals,” he whispered slowly, as if sounding it out for the first time.
“What about it?”
“Cancel their contract. Today.”
Dyson gripped the arms of his seat and recoiled backward. “I can’t do that, Mitch. Just can’t.”
“Sure you can. It’s easy.”
“For one thing, it’s a one-year fixed-cost contract. We’ll be sued for everything we’re worth.”
“That right?”
“Yeah, and we won’t have a prayer.”
“Let me worry about that. What’s two?”
“Two, Arvan is our chief chemical supplier. Without those chemicals, we’re screwed. Totally shut down. Bombs and missiles don’t work without high explosives.”
“Is Arvan the only provider on the market?”
“No, there are two or three others. All farther away, not as cheap, not nearly as reliable.”
“So what’s three?”
“Three, Arvan is our best supplier. Perry Arvan runs a tight ship. I’ll show you the quality control reports if you like. Perry’s got the lowest defect rate of any of our suppliers. His on-time delivery is perfect.”
“Is there a four?”
“Only this. If we pull the rug out from under him, Arvan will surely go bankrupt. We’re Perry’s biggest contract. He’s signed up for sixty-three million this year after he willingly took a seven million cut from last year. It will destroy him and a very fine company.”
It seemed to Dyson that Walters was biting back a smile. “You’re about to make me cry, Dyson.”
“Mitch, it’s bad business, and a bad decision.”
Walters snorted and shook his head. “Who pays you?”
Dyson took a deep swallow. “Take it easy, Mitch.”
“Do I pay you to worry about other companies?”
“No.”
“Remember that. In fact, you just convinced me Arvan’s the ideal candidate. What a great message to send to the others. Don’t tell me you don’t see that.”
“I don’t. Explain it.”
“As good a job as Arvan has done, it’s not good enough. It failed to dig deeper, share more of our pain. Provide an even higher level of quality service.”
Dyson felt like he was going to be sick. He couldn’t believe what he was hearing—his best supplier, about to be sacked, totally without cause, all because that’s where Walters’s finger landed on that page. He liked and greatly admired Perry Arvan, considered him a friend, in fact. The idea of kneecapping him, out of the blue, was revolting. He glanced at the cold blue eyes of the man seated to Walters’s right, hoping vainly for support, a mild nod, a squint of disapproval. Come on, his look was screaming, help me out here, tell the big jerk on your left what an outrageously stupid idea this is.
Must be one of Walters’s bloodless lackeys, another of the squad of yes-men at corporate headquarters, he concluded unhappily: the man glanced away and pretended to be studying the white walls.
“You mean, execute your best soldier to make the other soldiers better?” Dyson asked, hoping Walters would see the insanity of this approach.
“Don’t knock it till you’ve tried it. And if we drive it into bankruptcy, all the better.”
“I don’t understand your thinking.”
“ ’Cause it’ll scare the crap out of the rest. The other suppliers will line up at your door begging to offer more concessions.”
Dyson cleared his throat and struggled to clear his conscience. With two kids in college, and nearly two million in CG stock that wouldn’t vest for two more years, there really was no choice. None at all. “Exactly what justification am I supposed to use?” he asked, an abject surrender.
Walters wrinkled his forehead and pretended to ponder this perplexing issue. His corporate counsel at headquarters had studied the contract the night before and cooked up the perfect response. “Failure to perform,” Walters announced, as if the idea had just popped into his brain. “Leave it vague. No particulars, no examples. Don’t give him a legal target. If he decides to sue, leave him punching in the dark.”
“I see.”
Walters stood, as did his younger colleague. An entire half hour, and the younger man had not said a word. Never introduced himself, never so much as acknowledged Dyson.
Walters began easing his way to the door. “I want a call the second it’s done,” he barked on his way out. “Call by close of business, or don’t bother coming into work tomorrow.”
9
The fax arrived at 4:00 p.m. As death notices go, it was entirely lacking in warmth, detail, or civility. It read simply, “Notice effective upon receipt: For failure to perform, Globalbang hereby tenders cancellation of contract number UA124-990, said contract pertaining to all business arrangements between Globalbang and Arvan Chemicals. All future deliveries will be returned to sender, at sender’s cost.”
Perry’s secretary, Agnes Carruthers, took one long and horrified look and with a shaking hand yanked it out of the tray before scampering in the direction of the cramped conference room where Perry was in his weekly meeting with his section chiefs.
She banged the door open and stood, breathless and terrified.
Perry stopped in midsentence. “What is it, Agnes?”
“I…” It suddenly struck her that perhaps she shouldn’t mention this devastating news in front of everybody. Her face was ashen, her mouth hung open. It was just so horrible. Maybe it was a mistake—yes, that’s what it was, what it had to be. Or maybe somebody was playing a joke, a very rotten one. She clasped the paper to her chest and just stared at her boss, uncertain and speechless.
Perry stood and took a step in her direction. “Are you all right, Agnes?”
“Yes… uh, no,” she stammered. “You and Mr. Belton better join me in the hall.”
Agnes was old and occasionally excitable: she had been known over the years to throw the occasional outburst. Her tizzies were rare but legendary around the insular company. She looked positively unhinged, though. Mat Belton stood, and he and Perry followed her out into the hall. “You might want to shut the door,” she murmured quietly.
Mat did and the three of them ended up in a tight huddle. Agnes drew a heavy breath and tried to compose herself. “This just came in,” she whispered, unable to get the tremor out of her voice. She held up the fax so the terrible words could be seen.
Perry quickly read the paper. He yanked it from her hand then slowly reread it, searching line by line for a mistake or some clue that this was a joke, a forgery, a farce.
Nope: it looked dreadfully real. And quite final.
“Jesus” was all Mat could say. He repeated it, then again, and with each repetition the word grew weaker, becoming a faint whisper. If this was true, they were beyond even heavenly salvation. Mat knew what he was staring at, a certain sentence of bankruptcy.
“Failure to perform?” Perry slapped the fax in obvious disbelief. “Ridiculous. No, it’s completely outrageous.”
Mat insisted, “Our deliveries have always been on time. Always. Our reject rate is below a tenth of a percent. The past three years, they gave us the trophy for best supplier. This can’t be r
ight.”
Perry and Mat fell silent and contemplated the ugly situation. Frankly, there was little to think about. Either they convinced Globalbang to rescind this hideous order or inside a week the banking vultures would be picking over Arvan’s corpse.
Perry lurched away in the direction of his office. After a moment, Agnes and Mat scampered behind him. Perry was already on the phone when they entered, seated behind his old, scarred desk, hollering into the mouthpiece at somebody to put him through to Timothy Dyson right away.
After suffering an interminable moment on hold, an assistant coldly informed him that Mr. Dyson wasn’t available at that moment, likely for weeks, maybe months, or possibly ever. At the very least, not until they stopped calling.
Perry slammed down the receiver, clasped his chest, and recoiled back into his chair.
“Are you okay?” Mat asked, moving quickly toward his boss, who appeared to be experiencing a heart attack.
“I think I’m going to be sick,” Perry moaned before he lurched over and hung his head over the trash can. “We’re ruined, Mat. Screwed,” he mumbled.
Mat so badly wanted to contradict his boss, to offer some reprieve, some way to calm him, anything to remove the pain.
But it was simply impossible.
Indeed, they were, without question, beyond doubt, totally screwed.
The call from Jack Wiley came out of the blue at nine the next morning. Agnes tried her best to ward him off, unloading an array of contrived excuses—Perry was feeling ill, indisposed in the bathroom, expecting a conference call that would last at least an hour, and every minute of every hour of the rest of the day was overbooked.
Truth was, Perry was hiding in his office, planted firmly behind his desk, aimlessly shuffling papers and avoiding his workers, still trying to come to grips with the disaster. He had arrived at work as always at six, left strict orders not to be disturbed, and hibernated in stony silence ever since.
Agnes quietly pried open the door and poked her head in. “It’s a Mr. Jack Wiley. He insists on talking with you.”
“I’m busy,” Perry replied. He shoved a few more papers from one place on his desk to another, anything but busy.
“He says you definitely want to talk with him, now. Says it’s very important, very urgent.”
“Don’t know him. Tell him to call back later.”
Agnes crossed her arms and studied her boss. He was in a deep funk, cranky and surly, trying stubbornly to ignore her. She wouldn’t budge, though. She’d never seen him this way, and was determined to make him snap out of it. His eyes glanced up occasionally. She crossed her arms and coughed a few times.
“Oh, all right,” Perry said in a reproachful tone, and lifted up the phone.
Jack quickly introduced himself. “You might not remember me, Mr. Arvan. I was seated in the back of the conference room when you briefed my partners at Cauldron a few months back.”
“I recall the meeting.” He paused very briefly. “But you’re right, I don’t remember you.”
“I thought you and I should get together. I have a business offer you’ll definitely want to hear.”
“I’m busy right now, Mr. Wiley.”
“Please, call me Jack. I’m nearby. An hour of your time is all I ask. Sixty minutes, and if you don’t find me interesting, you can leave at will.”
“Well… what time?”
“Noon. Lunch at the Princeton Inn, my treat.”
“Look, I—”
“And please bring your moneyman. Mat Belton, right? He’ll want to hear this offer, too.”
At noon, Perry and Mat entered the upstairs restaurant of the Princeton Inn amid a loud and rowdy crowd of locals, parents of university students, and Tiger alum, arriving early in a swirl of orange-and-black tones for the weekend game against dreaded Yale. Their mood was festive. Princeton was heavily favored by the Vegas crowd; the idea of putting it to the uppity Elis was almost intoxicating.
Perry and Mat, with their dour expressions, looked dreadfully out of place.
A cheerful young waitress awaited them at the entrance; they were promptly welcomed, then ushered straight into a small private dining room in the back. Perry and Mat had thrown blazers over their usual office apparel of tennis shirts and blue jeans. Jack, in a fine gray suit and stiffly starched shirt, was standing by a window, looking anything but casual, and gazing out at the usual midday bustle of Palmer Square. The second they entered he turned around and approached them.
Handshakes were cordially exchanged and a waiter appeared out of nowhere, hauling a tray with a scotch on the rocks for Jack, a cold beer for Mat, and a diet Pepsi for Perry.
“How did you know I like diet Pepsi?” Perry asked, narrowing his eyes, suddenly suspicious.
“A good guess,” Jack said, an obvious lie. “Incidentally, I preordered. You’re busy and I thought it would save time. Everybody okay with steaks?”
“Fine,” said Perry, and Mat nodded.
They sat around a small table, unfolding their napkins and studying their knives and forks. Jack barely waited until they were comfortable before he came to the point. He looked at Perry, who was sipping his Pepsi. “I hope this doesn’t sound presumptuous, but I want to buy your company.”
Perry choked so hard his face turned red. He pounded his chest and caught his breath. “What?”
Jack leaned back in his chair and crossed his legs. “That probably sounds a little abrupt, doesn’t it?”
“Abrupt… no, not at all. You got it right in your opening sentence—presumptuous. Who do you think you are?”
“All right, let me explain. Until a few days ago, I was a partner at Cauldron. Like a lot of financial guys, I’m bored with investing in others, tired of watching from the sidelines. I make plenty of money, but I produce nothing. I’m ready to run my own business.”
“Go on.”
“I’ve been searching for the right opportunity for about a year.”
“Have you now?” Perry asked, slightly amused.
“Yes, and after you briefed my partners, I became intrigued about Arvan Chemicals.”
“Glad you find us interesting.”
“So I did a little digging. You’re public, and it wasn’t hard. You have a fine company, Mr. Arvan, a very impressive outfit.”
“We’re quite proud of it.”
“And you’re in deep trouble.”
Perry and Mat exchanged looks. How much did he know? the looks said. Maybe nothing, maybe he was throwing darts in the dark.
Straining to look relaxed and unconcerned, Mat spoke first. “There have been a few minor setbacks. Nothing we can’t handle.”
Jack let that incredible statement rest unchallenged on the table for a moment that felt like an hour. The silence said everything—had he screamed “bullshit” it would’ve been less cruel, and less revealing.
He knew a lot.
Eventually, and in a matter-of-fact tone, Jack confirmed their worst fears. “Two years ago, your sales were four hundred million. Last year sales sank to two hundred. And unless my research is flawed, the military munitions market is even slower this year.” Jack’s eyes shifted to Mat’s face. “I assume that’s what you mean by minor setbacks.”
Trying hard to mask his surprise, Mat said, “Times are hard, Mr. Wiley. What’s new? Survival of the fittest, and we’ve been around forty-five years. Believe me, we’ll be standing when the dust settles.”
“Don’t view me as the enemy, Mat. I’m not.”
“Oh, you’re our friend?”
“No, but we’ll get there.”
“Don’t bet on it, pal.”
“Look, you have good people, great products, an admirable reputation. I’d like to keep it that way.”
“We’re not for sale,” Mat insisted, scowling and trying to stare Jack down.
Perry was casually nibbling a breadroll, allowing his younger, pushier CFO to carry the battle. But in fact he did not look like there was any fight left in him, hunched down in
his chair, shoulders stooped, neck flaccid. He looked ancient, spent, and for a man who was inveterately neat, slightly unkempt: unshaven, hair unwashed with a large cowlick at the back, shirt hanging out of his pants.
Mat thought his boss had aged a dozen years in the past twelve hours.
But Perry ignored the bread for a moment and commented, “You know, running a company isn’t the same as investing in one.”
“Believe me,” Jack said, “I know that.”
“Takes strong people skills. Customer relations, management expertise, technical knowledge. How much you know about chemicals, son?”
With a timid smile, Jack replied, “I took a course in college.”
“And how’d you do?”
“I’m a fast study,” Jack said, ducking the question. It was an inane claim anyway, speaking as he was, to a man with a doctorate in thermochemistry. “Look, I’ve done or participated in over a dozen corporate turnarounds. I understand business, Mr. Arvan.”
“Good for you, Jack. We like to think we know a little about it, too. We’re not selling insurance or breakfast muffins, though. We deal with highly volatile chemicals. One small mistake and there’s a large crater in the middle of Trenton.”
“We can spend all day discussing my lack of qualifications. But why don’t we first focus on what I bring to the table?”
As if on cue, two waiters barged in and began laying down steaks. “Rare, right?” one asked Perry, who nodded vigorously. Evidently, Jack Wiley had done an impressive amount of research.
Perry grabbed his knife and fork, studied his plate a moment, then tore into his steak. “Go ahead with your pitch, I’m listening.” He hadn’t eaten since the night before and was famished.
“After fifteen years in investment banking, I can tap into plenty of deep pockets. Yours is a cyclical business, up one year, down the next. You need access to capital to get you past the rough patches.”
Perry stuffed a big piece of steak between his lips. No use denying it. “True enough,” he mumbled between bites. Well, what the hell, he was getting a free meal along with the lecture.
“Also I have an array of contacts.” Jack went on a bit, smoothly reeling off names of companies in the industry he was confident he could appeal to for business. He recited from memory. If nothing else, he exposed an impressive mastery of the automotive and munitions industries.
