Tuesday, April 6, 2010

Day 84 - On the Cuff

          I got a call today from a recruiter in Colorado about a controllership with a juice packing company here in Orlando. We talked for a brief time. The recruiter asked all the usual questions, and decided that he would submit me to the company. The job actually sounds pretty good. This is surprising and encouraging given the paltry number and dismal quality of the job postings I have seen lately. I am not optimistic, but I have to say that this development has lifted my spirits some. Before the call I was feeling bad about passing on Henry’s offer. Scoundrel though he has been to me, I hated to disappoint him. I know that seems ridiculous, but it’s true nonetheless.

                                           Ivan tries to strike a deal.

Albatross was a wonderful place at first. Everyone was happy to have me. I was there about a month when the HR director told me, “Everyone who has taken a meeting with you has told me that we hit a home run when we hired you.” I felt pretty good hearing that. I felt like I had found a home at last.
Toward the end of my first year at Albatross, Ivan came to visit from Quilnutz. Ivan had been building trawler yachts along the St. John’s River in Florida. They built their own hulls, and had several models based on either a 45 or 60 foot length.
By this time Ivan had tanked Henry’s company and closed it up. I had predicted to several of my friends there as I was leaving that Quilnutz would probably shut the Arkansas facility down in six months time. In spite of many emotional protestations to the contrary by Ivan’s henchmen in the interim, Quilnutz had finally announced they were closing the Arkansas plant, making my prediction come true almost to the day. Now he was looking for another smaller and less expensive hull to build on—something to fill the place in their product line that had been occupied by the Henry’s Arkansas boats.
He thought it would be a good idea to buy these hulls from Albatross, since we had excess capacity, and to finish them out in Florida. Everyone at Albatross thought that I ought to weigh in on the decision. If this were an e-mail, I’d be writing “LOL” right now. I love it when someone else’s bad karma looks like retribution and vindication for me.
I didn’t even have to stretch to make Ivan’s idea a non-starter. This wasn’t purely vindictive on my part. It was a bad idea from Albatross’s perspective, at least to the extent they wanted to stay in the boat business. It wouldn’t have made any sense to sell hulls to Ivan knowing that he was then going to be competing directly with the Albatross boats for retail sales in an already shrinking market. It seemed for a while though that I was the only one at Albatross who fully understood that. Executive management was anxious to try anything that might boost unit sales in the short term, and, to them Ivan’s proposal represented just such an opportunity. That we would find ourselves competing with our own hulls was not the only problem though.
The other problem had to do with Ivan’s solvency. I knew that Ivan was in hock up to his eyeballs. I knew the market for Quilnutz yachts was stagnant. I knew that Ivan’s floor plan lender was putting pressure on him to pay curtailments on his older boats, that they had refused to bump up his line of credit, and that there was significant risk that he was going to default.
Ivan wanted us to provide him hulls on the cuff—that is he wanted us to ship him hulls consignment that he wouldn’t have to pay for until he had sold the finished boat. In effect he wanted us to extend the credit that his floor plan lender would not. If we did a deal like that we would not only be assuming the considerable risk that he would default on us as well, but we would actually be increasing that risk by putting his balance sheet further under water.
The solution was pretty simple. I suggested we tell Ivan that we would sell him hulls, but that we price them high enough to make him choke and make the terms cash on delivery. Ivan went away. I haven’t seen or heard from him since.

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