Chapter 18 - Big Plans
The meeting with Jim Sweeney made Frank eager for action. His first call was to Al Crossman, but it was the Friday before Labor Day and he was out of the office for the day. He was able to get through to Agent Henderson, who was in his office at the Federal Building.
Frank: "I think you should take a look at a block of Western shares that traded at ten this morning."
Henderson: "What makes you say that?"
Frank: "Something came up in a meeting yesterday. If it comes true, it'll create a big demand for Western shares. The price is bound to go up from where it is now.
Henderson: "You'll have to tell me more to make me interested.
Frank: "You didn't hear it from me—there is a group who is said to be getting ready to take a position in Western. If they do, they'll have to buy any shares they can get their hands on. Only the people who were at that meeting know about it.
Henderson: "Do you think someone's cashing in?"
Frank: "More than that. The block that traded today would be just the right amount to cover those shorts that set off the trouble in the first place. To me, it looks like a defensive move."
Henderson: "I'm not following you."
Frank: "Whoever sold those short shares has got to cover them. If they don't, they have no profit. What happened at yesrterday's meeting made them make the buy to start covering.
Henderson: "I see. Who was at this meeting?"
Frank: "Alvin Warner, Al Crossman, Blake Hart and Tyler Smith. You know all of them. There were five directors, too: Jim Sweeney, Detlef Mueller, Simon Lambert, Barrett Dodge and Randall Trainer."
Henderson: "You left yourself out."
Frank: "I wasn't there. I was out of the office. One of the people filled me in."
Henderson: "You're kidding! You're telling me all this and you weren't even there? The credibility of your story just went to zero. And, don't forget, there's the matter of those put options."
Frank: "I knew you'd say that—but look, the facts speak. That was the subject of that meeting yesterday and there's no doubt about the block of shares trading. All I'm saying is to check it out. What've you got to lose?"
Henderson: "My credibility, for one thing."
Frank: "Have you got any better leads on this case?"
Henderson: "Well..."
Frank: "I didn't think so. Why don't you at least check it out? If it turns out to be nothing, so be it. I've got a feeling that it won't."
Henderson: "You've got a feeling... That's great! Alright, I'll check it, but it's not as easy as you think."
**********
Frank tried to make a few more calls. He wanted to speak to Murray Shoreham. He was gone for the weekend. He also wanted to speak to his contacts for the new R&D financing project. They were out of their offices, too. He switched on the intercom.
"Jeannette, see if Blake Hart has some open time on his calendar."
"Mr. Hart is right here," Jeannette answered. "He wants to see you."
"Send him in before he gets away," Frank yelled into the intercom. "Bring some fresh coffee, too."
Blake Hart wasn't much older than Frank. He was a Chemical Engineer by training and had an MBA, to boot. It had been quite a few years since calculus and thermo-dynamic equations were his stock in trade. He'd done stints in sales and plant management in addition to engineering before being called to work at Headquarters. His marriage to Brenda was number two for him—her first.
"I was just about to go out looking for you," Frank said as they took their seats at the conference table.
"I had a feeling," Blake said.
Frank had known Blake for a dozen years. They'd worked together many times. Every time they did it turned out well. Blake was like Frank in a lot of ways. One was that Blake was a quick study on Frank's point of view, but knew where to draw the line before he began to step on his toes.
"There are some forecast questions we have to straighten out. It goes beyond Aaron crunching numbers."
"Seems like old times," Blake said. "How many forecasts did we do together when you were Controller?"
"One more for old time's sake," Frank replied.
"You ought to hire yourself a new Controller to take your place. This is really his job. I've been watching you. You're gonna to drive yourself nuts before you get a chance to grow old and gray. That's why Tyler and I are taking you out for golf this afternoon."
"Golf sounds good, but I've gotta pass," Frank said, laughing off the thought of stolen liesure time. "I'd like to hire a Controller, but I've got to get this mess with the SEC straightened out first."
"Bad thinking," Blake said as he shook his head. "Get someone in here to straighten it out for you."
Frank sighed; he eased back in his chair and thought about what Blake said. Although it was said half in jest, Frank knew that Blake never gave advice in jest—and deep-down, he knew it was the right way to go. "You know," Frank said, "if I hadn't been Controller before this job, I would have done it already. I think you're right."
"Besides, if the new guy is any good, you can take credit for whatever he does, and if he screws up you can fire him," Blake said, as he laughed.
"Now, that's a real MBA talking," Frank laughed back.
They finished their coffees and set the cups down at the same time.
"Aaron told you about my plan for the Bayonne and Texas City Plants?" Blake asked.
"That's good as far as it goes," Frank answered. "I think this downturn might have longer legs than that. We need a plan that stretches out farther."
"How is the forecast shaping up? I know that all the units aren't down."
"It looks better than you might think," Frank said. "Sure, we'll be down, but I think we'll ride it out better than the industry average. We have some bright spots. In some ways, it's a balancing act."
"What're you trying to balance, Frank?"
"We're going to be generating positive cashflow because of inventory drawdown and our stock price is depressed. That's a combination I don't think we want to live with. It makes us a takeover target. Someone could leverage the buyout and then pay off the debt with our own cash."
"So you're looking for ways to spend some money? What about Jason's R&D?"
"He'll get some of it, but his needs go way beyond that. At the same time, we don't want to build up a lot of excess inventory.""
"I'd like to make a complete conversion of Texas City and Bayonne," Blake said. "Right now, they're carbon copies of one another. I want to specialize the plants and narrow their products; make them state of the art equipment-wise. We'd get a big cost advantage on our closest competition. It would take some money—and time."
"That's perfect," Frank said. "We can capitalize the whole thing. We just have to get the tax abatement agreement in Texas City renegotiated. I can talk to Tyler about getting that started."
"Of course, we'd have to sell Alvin on the idea," Blake reminded him. "That won't be easy. You know how he likes the eggs in different baskets—not relying on one plant for producing everything."
"We'll have to show him some numbers that will convince him," Frank said. "You get your people working on it and I'll loan Aaron to you to help with the financials after he's done with the forecast."
"Okay," Blake said. "Let's hope it's not another thing that Alvin almost likes."
Frank began to answer Blake's remark, but thought better of it. He knew Alvin was cautious—too cautious sometimes. Frank always kept his gripes to himself. Besides, he had other important things on his mind.
"By the way, I want to discuss something on another subject," Frank said.
"On the golf course," Blake insisted.
