Domestic Case Study
day in the life of a company in crisis is like a month in a healthy company.”
Harvey Kibel, Kibel Green, Inc.
Resources Corp. United States
AG, a Luxembourg based holding
company, formed Bridgewater
commercial farms and real estate property in the
The acquisition of Connor Forest Industries, Inc. transformed the
group from passive investments into a major manufacturer with logging operations,
lumber and flooring mills, furniture and kitchen cabinet manufacturing facilities
and a toy business. Management was
not up to the challenge and large operating losses soon developed.
had twenty manufacturing, forestry, real estate and farm subsidiaries. The forest
products group, Connor Forest Industries had four mills (union and non-union)
and 159,000 acres of timberlands. Thornburg
joined Bridgewater as a Director to develop a
comprehensive strategic plan for restructuring
Bridgewater focusing on core manufacturing businesses;
became CEO. Over the next five years the emphasis moved from restructuring
to improving industrial operations, information systems, product development and
marketing. The sports flooring division
captured 40% of the U.S.
market and productivity was improved by 50
to 200% in key subsidiaries. The remaining non-industrial assets, including the
toy company, were divested. A large
chain manufacturer with an excellent niche market was acquired and its business
expanded by 50%. By the end of year five the goals were achieved.
addition to directing operating improvements at each subsidiary, there were significant
changes made at the holding company. For
example, the corporate staff initially numbered 100 employees, four years later it was four.
The bank lines were re-negotiated and all bank debt was repaid over the
next four years. The corporate structures
were modified to minimize state sales taxes and effectively use federal and state
tax loss carry-forwards. Employee
health, pension and corporate insurance programs were consolidated and the costs
reduced or contained through the adoption of innovative flexible benefits programs.
management information systems including EDI and supporting distribution facilities
were developed for each BRC subsidiary. Customers included Sears, K-Mart, Toys
"R" Us and Wal-Mart (where BRC maintained its sole supplier relationship
for chain products).