[Got it!]
[By the way, my favorite beer is Yuengling.]
***
[Ralph Steinmark, it’s Walter Karnaugh. We’re all at the hotel. Can you meet us in the lobby? We’re having pizza for dinner. Is that OK?]
[Walter, it’s Ralph. I’m in the lobby now. Pizza is grand, just no anchovies, please.]
Chapter 9
(188th dawning of the 3,687th orbit)
3rd Planet
Laketa Godeswanger, Alizar el Shelamus, Claude Applebee/Paul Acacius, Elizabeth “Liz” Mosby/Jane Ceekundah, Ralph Steinmark/Mike Pakkeer and Walter Karnaugh/John Prymuus are all in the conference room.
Walter makes all the introductions. “Thank you for meeting with us. As you may know, I’m a major stockholder in your company. I’m also a big customer through one of my companies, Jupiter Mining. We’re going to visit your company tomorrow because we’re concerned about the delivery problems on some maintenance parts we’ve ordered for machines that we’re using in our mines. Ralph, how long have you been with Montana Mining Machinery?”
“Just a little over six months, Walter.”
“What’s your background?”
“Well, in this life I got my MBA from Penn State’ Smeal College of Business after an undergraduate degree in supply chain management. I’m certified CPIM by APICS. In a previous life I had an EE degree from MIT. I’ve been in manufacturing most of my last three lives.”
[Ralph Steinmark and those assembled, it’s Alizar. As I always say, it’s tricky giving your resume when you’re a beta.]
[Ralph Steinmark and those assembled, it’s Laketa. What, pray tell, are APICS and CPIM.]
“APICS is the premier supply chain professional society. Originally it was the American Production and Inventory Control Society. CPIM is Certified Production Inventory Management. It’s a certification awarded by APICS by testing.”
“Ralph are you aware of the spare parts orders from Jupiter Mining?”
“I sure am and I’m also aware that many of those orders are long overdue. The issue is the president, Ben Stoltzfus, my boss. Our manufacturing practices are all last century. I’m trying to make changes and bring things up to date but he resists.”
“Give us some examples.”
“Well, the lead time for new machines is 26 weeks and we’re usually late even then. Ben has 27 direct reports. All decisions must go through him. Nothing new can be tried. Our production control system is 5 clerks in an office making records on Kardex cards. We have no ERP system. Does that give you the picture or should I go on?’
“Do you think that something can be done to expedite the shipment of our spare parts?
“I believe so. Many of the parts that you need are in the factory being held for machines that we’ve promised for delivery 6 months from now. I tried to pull the parts from those jobs and ship them to you but Ben caught me and ordered me to not do that.”
There is a commotion at the door and in walks Paul Snyder followed by two delivery boys with pizza boxes. “Here’s the pizza in several varieties. No anchovies as requested. I’ve also got some salads and beer and sodas. I need some money, Walter. I had enough for the beer but didn’t have enough to pay for the pizza.”
“Excellent, Paul,” said Walter, handing money to the pizza guys. “We need to solve that kind of problem going forward. Claude, what would you think about getting some credit cards issued for Paul and perhaps a petty cash account funded with about $10,000.00 so that Paul has access to funds if he needs them?”
“Certainly, Walter, I’ll have my office take care of that.”
“Let’s dig in and we’ll continue our conversation. Paul this is Ralph Steinmark. Ralph, Paul Snyder.”
The food rapidly disappears.
Between mouthfuls Walter says, “I think tomorrow it’s necessary that we not mention that we’ve met before. I’ll insist that we talk with operations people to get you into the meeting. If Stoltzfus stonewalls me, then I’ll have a hissy fit. My plan after that, if necessary, is to take over control of the company. Ralph, have you met any of the board of directors?
“The only one I’ve met is the chairman, Charles Fitzgerald.”
“What’s your take on him? Does he have any special allegiance to Stoltzfus?”
“I don’t think so. He owns several businesses here locally. I think he’d like to see the company doing better but doesn’t know how to make that happen.”
“That’s a good input. Let’s talk about how the company is organized. Can you tell me about that?’
“Well, the organization is a circus. Ben has 27 direct reports. Everybody is busy empire building. Ben likes to play us off against each other. I thought maybe you’d ask about that so I brought this organization chart.”
“I think we can streamline that. Who’s the top engineering manager?”
‘Baker Anderson. He’s a Penn State grad with a master’s degree from Georgia Tech and a genius when it comes to mining machinery. He’s been with the company for about ten years. I understand that he’s been looking for a new job.”
“How about Human Resources?”
“Betty Rodriguez is good people. She had some ideas about changing the sick leave structure so that manufacturing workers could take sick days in the same way that the office people do but Ben shot her down. She’s been certified SHRM-SCP by the Society of Human Resource Management.”
“Interesting, how about quality?”
“Alice Schmidt is the top person. Last year she talked to Baker Anderson and Scott Hughes about instituting a quality system based on ISO9000. She saw it as a way to help us solve problems. We’ve lost business because we’re not ISO9000 certified. That’s required by many companies and in many countries, especially in Europe.”
“How about in the finance area?”
“The CFO is Peter Hunter. He and I talked about putting in some ABC accounting to give us some useful costing information that could drive management decisions. We were never able to gets Ben’s attention to get anything started in that area.”
“How about sales and marketing?”
“Scott Hughes is our top guy there. He’s been with the company forever. He’s well known and respected in the industry. He’d like to standardize and modularize our product offerings. What we do now is essentially custom design every order. The sales people run wild. They promise anything and everything to get an order. This is one of the factors that contributes to the long lead times.”
“That’s great input, Ralph. Our remaining agenda item now is to make sure that none of this beer goes to waste. After we accomplish that, we’ll adjourn and then we’ll see you tomorrow and we’ll see what happens.”
Chapter 10
(189th dawning of the 3,687th orbit)
3rd Planet
Laketa Godeswanger, Alizar el Shelamus, Claude Applebee, Elizabeth “Liz” Mosby, Paul Snyder and Walter Karnaugh arrive at Montana Mining Machinery factory for their meeting with Ben Stoltzfus.
Shown into a conference room they’re soon greeted by Ben Stoltzfus. “Welcome to Montana Mining Machinery, ladies and gentlemen. I’m sure it’s a first here. We’ve never had visitors bring their cats with them. What can we do for you today?”
Walter leads off the conversation, “First of all let me introduce you to everybody. Claude Applebee and Elizabeth Mosby are attorneys with Woodward, Woodward and Leumond in Philadelphia. You may remember Liz from three years ago when Jupiter Mining purchased some mining machines from you. Paul Snyder is my assistant. The furry ones are Alizar and Laketa. I’ve got three missions today. Foremost, I need to get the status of several orders my companies, Jupiter Mining and Satellite Mining, have open with you for some replacement and spare parts. Next, I understand we sent you a request for quote last week for some additional machines. I’d like to discuss that, if we can. Finally, as a stockholder, I’d like to have a tour of the facilities and I’d like to meet some of your people, especially people in operations.”
/> “Excellent, I’ve asked Ralph Steinmark, our Manufacturing Manager, to join us to give you an update on your orders.” Introduces Ralph to the assembly. Pointedly doesn’t introduce the cats.
[Alizar El Shelamus, it’s Ralph. How are you this morning? How come you weren’t introduced?]
[Ralph, it’s Alizar. I’m wonderful. It’s good to see you again. My guess is that your boss isn’t used to dealing with alphas.]
“Good morning, Mr. Karnaugh. My records show that we have 50 orders from Jupiter Mining and Satellite Mining. 10 of these will be shipped this week. Here a list of all the orders and their status. You’ll see that the deliveries on the remainder of the orders range from 2 weeks to 13 weeks on the remainder.”
Walter looks at the list. “I’m amazed that you don’t stock any of these parts. Aren’t all of these standard components in machines that are currently in production?”
“Yes, they are. We don’t stock any components. We treat all orders as make-to-order,” Stoltzfus explains.
“Well, this report is a disappointment. Do you understand that my mines are shut down because the machines I bought from you need repair and I can’t get the repair parts I need from you? “
“I understand your situation, Mr. Karnaugh, but I’m not sure I understand what you want me to do about it.”
“What I’d like you to do is expedite the shipment of the parts that I need to keep my business running.”
“Actually, I never understood what your business is. I can’t find any reference to where exactly your mines are located.”
“The key issue is that my operations are shut down waiting for repair parts from you for machines we purchased from you. I can’t understand why you don’t stock these parts. Other customers must have the same concerns. Where my mines are located are not relative to any discussion. What is relative to me as a stockholder in this company, is how you are able to stay I business with customer service like this? I think we can skip the review of any quote you have for me for new machines. Let’s get on with a tour of your facilities.”
Chapter 11
(189th dawning of the 3,687th orbit)
3rd Planet
The whole gang returns to the hotel and gathers in the conference room.
“Where do we stand on stock holdings in that company?”
“Here’s the list of the betas that are stock holders. You can see that in addition to the 17% that you hold, we have about 20 different individuals that together hold another 47%. In effect, we hold a majority of the stock in the company.”
“As I understand the makeup of the board, the chairman and two others form an executive committee that’s authorized to act between board meetings. Why don’t we call that chairman and see if we can get him to act?”
“That’s a good idea.” Applebee dials the speaker phone in the conference room.
“Mr. Fitzgerald, this is Claude Applebee. I’m a partner in the law firm of Woodward, Woodward and Leumond. We represent a group of shareholders in Montana Mining Machinery. I’m calling you today with Walter Karnaugh, who is the largest stock holder in that company. Our intent is to take over the company. We’re wondering if you would be interested in continuing as an outside director and chairman, when we accomplish our aims. “
“Well, this is a surprise but I’d certainly be willing to talk about it.”
“We understand that you and two others constitute the executive committee of the board that are authorized to act between board meetings. Is that correct and do you think that they would also want to continue on the board.”
“You are correct about the executive committee. I’d have to check with the other two to be sure but I believe that they would go along with whatever I decide.”
“Excellent. We visited the factory today to try to expedite the shipment of some spare parts that Mr. Karnaugh had ordered for his Jupiter Mining, Inc., and Satellite Mining, Inc., operations. We’re very much concerned by what we saw. Deliveries are way behind schedule and the operation systems that are in place are from the middle of the last century. When we take over, we plan to terminate the president and replace him with Mr. Karnaugh.”
“The president is the great-grandson of the founder of the company and a stockholder,” Fitzgerald offers.
“We understand that. The group we represent has 64% of the stock. What we’d like you to do is meet us at the factory tomorrow and terminate the president. What we’d propose is that we make him an offer for his stock and pay him a termination bonus plus whatever terms exist on his employment contract. Do you think you can get the executive committee to go along with that?”
“First of all, I’d like to know why you think you can run the company better.”
“That’s a fair question. We toured the business today. We saw two main problems. First, the operating systems in place were outdated 30 years ago. That’s a problem that’s easily fixed. The methodology is well known. We discovered that there are personnel in the company that have solved these problems at other companies and are not[O1][O2] being allowed to do so. The second issue is management organization. The president has 27 direct reports. That’s unwieldy to say the least. We can fix that is a few minutes by streamlining the company’s management with a reorganization. Finally, Walter Karnaugh has extensive experience and is the owner of a number of very successful companies. The main issue is that we’re going to do this in any case.”
“That satisfies me. I’ve been concerned for some time that the company wasn’t doing as well as it should nor was it growing as fast as it could. I can check with the others but I think I can persuade them. If you’re going to take over anyway, this would cause the least disruption. Let me make some calls and get back to you in a couple of hours.”
“OK, thanks, we’ll be waiting for your call.
“That’s taken care of for the moment,” Walter declares. “Let’s go over the other items on out agenda.”
“We need to form a company to explore asteroid mining. We need to be in contact with SpaceX about launching out space ships. We should start by hiring a beta to be the general manager and another beta to be the chief engineer. We could finance it by making a private offering to betas that we know would be interested. It would be helpful in that regard if we had a spaceship drive design. Do you think we could get some engineers from the Home World to help with that?”
“We’ll have to be alert to opportunities to open that subject.”
“We also want to visit companies that are active in seabed mining. If we invest in a company in this area, we might get a delta to help with operations. Deltas were the 4th species designed to exploit this star system. I don’t remember ever hearing about any contact with deltas. That might give us a technical advantage.”
“We also need to explore the situation with Polycorp. We need to see what price level we would need to operate at that will allow that operation in Mountain Pass, California, to be profitable. Before we bring that about we should explore buying the company. Claude, can you put somebody on that project?”
“Yes, I’ll put together a team on that. I take it you didn’t want Liz to handle that.”
“That’s right. If we take over Montana Mining machinery, I’m going to want her to come on board that operation. That is, if that’s something that interests you, Liz, what do you think?”
“Sign me up,” says Liz smilingly.
“We need to explore a recycle company. Many of the metals we want are used in electronics. If we had a company that recycled electronics, we would have a source for the metals that we need to ship to the Home World.”
“I’ll take that project personally. It could be a worthwhile investment for me.”
The phone rings. Claude puts in on speaker.
“Hello.”
“Mr. Applebee, this is Charles Fitzgerald. I’ve spoken to the other two directors on the executive committee and they agree with your proposal providing we get additional stock options as part of our director’s co
mpensation package. We can meet you tomorrow morning at the company. If you’ll draw up a board resolution appointing Mr. Karnaugh as President/CEO and nominating him as a board member, I can sign that in the parking lot before we go in to see Ben Stoltzfus.”
“Excellent. If you give me the particulars of his employment contract, I’ll prepare a termination letter and a letter offering to buy his stock as we had discussed.”
Fitzgerald provides the necessary details.
“See you tomorrow at shall we say, 9:00 am? Do you want to contact Stoltzfus and tell him you’re coming for a visit tomorrow morning?”
“I’ll do that. 9:00 AM it is. See you tomorrow.”
“Paul, contact Ralph and tell him we’re coming in again tomorrow and that he’ll want to be there”
Chapter 12
(190th dawning of the 3,687th orbit)
3rd Planet
The whole gang meets in the parking lot. Their meeting is on the hoods of their various cars. Fitzgerald introduces the other board members. He and the board members sign the letters and board resolution that Claude has prepared.
Fitzgerald takes Stoltzfus into his office. “Ben, the board’s executive committee met last night and decided to replace you as president. We’re going to offer you a nice buyout on your contract and we’re also going to offer to purchase your stock at a nice premium. All of that’s detailed in these two letters. These two offers are contingent on each other.”
Alizar and the Crisis: An Alizar Adventure (The Adventures of Alizar Book 2) Page 3
