Southbound Ch. 01-02

"Sure, no problem. Thanks, Leo. I think I will take the rest of the week off. I need to get some things done."

Carla had pre-empted me and told the boys about our split. She was pretty vague about the reasons, but didn't trash me in the process. Both of them were surprised and had a hard time understanding what it would mean to our family. I got the feeling that if they were going to pick sides, they might choose mine, although I always felt Phil was closest to his mother.

Talking to my parents was difficult. I tried to be honest with them and assure them that no one cheated, we just grew apart and Carla had decided to end it. I didn't talk to Carla's parents. We were never that close and I was sure Carla would let them know what was happening. I didn't expect to hear from them.

Taking a week off seemed like a good idea at the time, but when I got out of bed the next morning, I had no idea what I was going to do with myself. There were no extreme financial measures necessary to protect myself. I simply cancelled the joint credit cards, keeping my business card and applying for a separate personal card in my name only.

I sat in the secure room at the bank and went through our safe deposit box and did an inventory. Carla had already removed any personal items of her own, but had left the insurance policies and other important papers. Nothing was missing that should not have been. I made a note to change the beneficiaries on my policies and will. Then I remembered that I would need to change next-of-kin notification on a number of items as well.

The house seemed like a tomb first thing in the morning. Phil was up and gone before me. The silence was spooky. I turned on the TV news just to have some background noise. At least Phil was here in the evening and slept here each night. I could hear him stir at night now and then and was glad for the faint noise. By mutual agreement, we did not talk about the impending divorce or his mother. I wasn't ready for that yet.

By the end of the week, I was ready to go back to work. I had done every home repair and maintenance project I could think of and still couldn't keep myself busy enough. I worked hard to keep my mind off what had happened to me, but it was difficult to resist going over and over her words in my mind. We were nothing alike, she said. We were opposites and after a while she got tired of trying to find common ground.

"Hi, Andy, it's Ruth."

"Hello, Ruth," I replied sullenly. "How are you?"

"Fine, thank you. Carla has gone to spend a couple of days with our parents. They aren't very happy with her and she wants to try and make peace."

"Oh ... that's a surprise," I said, wondering why her parents would feel that way.

"Andy, I wanted to talk to you about Carla and what she's done. I'm sure it must have caught you completely by surprise. I know it did for me when she first mentioned it."

"What's there to say, Ruth? She made it clear why she was getting rid of me. Bored, she said. Nothing in common, she said. Christ, when she was done with her little speech, I wondered why she married me in the first place."

"Don't be so hard on yourself, Andy. I think there might be a reason for all this. It's possible she entering early menopause. The brain can paint some ugly pictures for women when that begins."

"You're her sister. Wouldn't she tell you?"

"I don't think so. I don't think she wants to admit it to herself. I might be wrong, but both of us are getting near the age when menopause begins. I can assure you there is no other man in her life. But listening to her over the last couple of weeks, she's not sounding or thinking like the sister I know."

"Ruth ... if you're right ... what are you suggesting? Reconciliation?"

"Would you consider it?"

"I don't think so. I'm not anxious to be single again, but I can't see us trying to put the pieces back together. It would have to be a pretty big attitude change to get me to consider it. The last year or so with her is something I don't intend to repeat."

"Are you telling me this had been developing for over a year?" she asked, clearly surprised.

"Yes. In fact, almost two years. She has been systematically shutting me out of her life."

"Oh ... Andy ... I didn't know. I'm sorry. I wish you'd said something sooner."

"Would it have made a difference?"

"I don't know. I thought I was close to Carla, but now I'm beginning to wonder."

"Now you're sounding like me. I thought I knew her too."

"Let's stay in touch, Andy. I'll let you know if I learn anything."

"Sure ... that's fine Ruth. Take care," I said, hanging up.

I sat in my office chair, thinking about Ruth's call. I had always liked her and felt I could confide in her. If she was caught unawares by Carla's action, then what did that say about their relationship? And why were her parents upset with her? My recollection of them was that they were reasonably contemporary people and wouldn't view a divorce as unacceptable. They certainly wouldn't be objecting on religious grounds. And their attitude toward me was one of tolerance for the most part. Curious.

I was more than grateful for the project Leo handed me. The target company turned out to be Statewide Converting, a pretentious name for an operation that was barely recognized in the marketplace. Their plant was in Tracy, just off Interstates 5, 580 and 205, a strategically central location. Our team consisted of myself, senior accountant Dave Charles, and Ralph Rubens, our very experienced production manager. Our task was to get inside Statewide and see what it would take to integrate it successfully into Flex-Tek.

For the next three months, I spent my time working on the Tracy project. I spent a good deal of time out in the marketplace, looking at how we could take advantage of a great location and service our existing and future customer base. Dave, Ralph and I would huddle almost daily to discuss what we knew and what was required to make this acquisition work. I surveyed our clients and potential clients regarding our locating in California without revealing who we were targeting. The Statewide management people kept the acquisition as quiet as possible, but we were sure some of the employees must have known what was going on.

Ralph came to the conclusion that almost all the equipment was obsolete for the products we wanted to make. Some of it was saleable on the used market while the rest was, as he put it, boat anchors. That put the burden on Dave to put a budget together based on Ralph's selection of new equipment and my direction when it came to product needs.

There was only one person we had to convince and that was Leo. It was his business, his family's money, and therefore his decision. The financial condition of his company was such that he could borrow enough to create a modern medium sized plant capable of quality laminating, printing, bag and pouch making. Essentially, what Statewide had to offer was land, building and importantly, people. Its current customer base was of dubious value.

If there was a concern, it was finding enough of the right people to man the plant and run the sophisticated equipment that would be completely new to them. That meant training and it was Ralph's job to assess the quality of the production staff and decide who was capable and who was not. He befriended a senior operator and relied on him to give him unvarnished assessments of the hourly workforce.

There was another advantage to Tracy: its location in relation to the Bay Area and the Central Valley. People were commuting from Tracy to the two big Bay Area cities as housing prices continued to escalate in the late twentieth century. It seemed likely we could find some talent living in the immediate area if we advertised. We were going to need a total of about fifty people to run the operation when it was completely reconfigured.

Before I began the study, I had arranged for a housekeeper to look after Phil's needs during the week. I would be home on the weekends. The arrangement was for three months, the time limit Leo had set for our evaluation and proposal. Dave was the whip who made sure we stuck to the schedule. From Labour Day forward for three months, I was totally dedicated to the project. It kept me from dwelling on Carla and the end of my marriage. I know she had occasionally come to the house during the week to check on Phil, but by agreement, we didn't discuss anything beyond the odd note she left me about a dental appointment or other routine issues.

"All right you guys, how much money do you want and what am I going to get for it?"

That was Leo, straight to the point, no bullshit. The three of us laughed, since Dave had already predicted it would be his opening line. He handed over the slim booklet and we prepared to take our boss through it.

"Leo," Dave began, "we're going to convince you to invest almost twelve million dollars in this project and be confident that it is money well spent."

"Holy shit, Dave! Twelve million!"

Dave nodded. "Thereabouts."

For the next three hours we went through the proposal in detail, covering the market opportunities, strategic strengths and weaknesses of current competitors, types of products and equipment, and finally, the financial analysis detailing the costs and expected return on investment. I'll hand it to Leo. After his initial reaction, his only questions were about whether we had enough equipment or space or manpower to get this job done. At no time did he question my market analysis after I covered the interviews of potential and existing customers.

Those three months were the most fulfilling and productive of my business life. We had made a compelling case for buying a failing business and building it into a success based on our strategy. We were a mid-sized company who sought to avoid the big multinational competitors. We wanted the business they didn't want. We wanted to deliver high quality at competitive prices against the handful of mid-range converters already present. We had been successful doing this from Canada, and the numbers indicated we could be just as successful doing the same thing in California.

"Leave it with me, guys. It's a lot of money and I need to think about it before committing to it. You've done a hell of a job putting the proposal together, so congratulations on that. I won't be long in making a decision, I promise."

With that, the three of us left the office and headed off to our local bistro for a late lunch.

"So, Dave, what do you think the odds are?" I asked.

"Better than fifty-fifty, I think. I didn't get any feedback that he was contesting any of our suppositions or data. He trusts your market information, so he's okay there. If there's any concern it would be with our choosing Italian presses rather than German or American. I think he's concerned that the savings on cost will mean the quality and service won't be there. Ralph's follow-up on their installations indicated the Italian units are not going to be a problem."

"I got no negative feedback other than the occasional language problem when they phoned the plant," Ralph confirmed. "I think the two presses we're proposing will cover anything we want to print and then some. They are very much state-of-the-art."

"Well, there are considerable savings with the Italian units, especially compared to the German presses," Dave said. "My sense is that he'll probably go for it, but maybe not all at once. He may want to stage the equipment. One press and laminator, one pouch machine to start with. Bring on the second press and laminator when the business builds and go from there. The property allows us to expand in the future if we kept growing."

"So, I guess it's in Leo's hands then," I said, stating the obvious.

"I wonder who he'll nominate to run the show?" Ralph asked idly. "That manager they have is past his 'best before date.'"

That got a laugh, but recognition that Ralph was right. Both the owner and the production manager were of retirement age and the production manager was not up on current printing or laminating technology. There would need to be a replacement for both when the new equipment arrived. Luckily, the owner had been supportive of the sale and modernization and had not been an obstacle. It appeared he was ready and willing to retire when the time came. One less problem, I thought.

"What about the sales force, Andy," Dave asked. "Are you okay with them?"

"Not totally. They've got a pretty good performer in Ms. Fiona Alexander, but the father and son broker team in Los Angeles give me the creeps. I think I'd want to terminate them. Every time I tried to talk about quality markets, they switched the conversation to volume opportunities. I think they only see how much commission they can earn. I'm sure we can do better.

"I haven't come to a decision on the broker in Bakersfield, but the one we already have in Sacramento looks adequate. So, I may want to run a little light until I see how well we do with the people I have confidence in."

"Are you going to run the entire sales force?" Ralph asked.

"I don't know. That's up to Leo. If he asks me to, I'd accept. I think I can handle it."

"Why wouldn't you ask for the job?" Dave asked.

"I probably will if Leo gives us the go ahead. I'd sure want to be on the ground there to get things going in the right direction. Up here, I've got more confidence and we could appoint Mike as a local sales manager with a partial territory. That would make sense, considering his performance."

"How long before you think the Tracy operation would be where you wanted it?" Ralph asked.

"A year, I'd guess. Statewide doesn't have a lot of business we want to keep in the long term, so it will be up to me and the sales people to bring in some new business fairly soon. We'll move some of the business from Langley to Tracy to take advantage of the location and the better equipment. Langley is turning down some good business right now. I'm sure that's what got Leo thinking about expanding."

"I wasn't surprised that over fifty percent of our business was now south of the border," Dave said. I knew we had been growing there, but when Leo and I looked at the figures, I'm sure that got him thinking."

"It's our fit, Dave," I said. "We do the things the other guys don't want to do or can't do. That's what got us into the coffee business and the private label dried fruit and nut business. Look at that volume now."

"It's good business," Ralph agreed. "It'll be a natural for the new plant."

"If we get it," Dave grinned."

"Yeah," I agreed, "If."

To Be Continued