The Story of Charlie Mullins

by Jim Wygand

  * * * * *

  Charlie and Gina were also busy planning their future as the expansion drive of the Shaw Corporation approached the final stretch. They met with Carlo Rizzo every Sunday when Charlie would provide Carlo with a briefing of progress on the expansion project and copies of his reports to Phillip Shaw. Carlo said nothing but “thanks” and would put the documents aside for later review. Gina had cut back on her volunteer activities. She continued with her tutoring at the local Catholic school and sponsored her friend Emily’s art show. But she sharply reduced her other activities and stayed home more often. With Charlie busy with the expansion project, they went out less often. Gina kept in contact with her friends by telephone, advising them that she was simply taking a long-needed rest from her frantic schedule. No one seemed to disbelieve her given her previous level of activity. Unlike Charlie’s Shoreville “friends”, Gina’s friends did not pry into her private life.

  * * * * *

  Following selection of the companies he decided to acquire, Phillip Shaw instructed Bill Cummins to move forward on the acquisition contracts with Warren Carpenter. Simultaneously, Phillip would plan his announcement of the acquisitions and supply chain contracts. Later he would announce the IPO and his answer to a “higher calling” to enter public service as an elected official. He met with Warren Carpenter at home where they discussed Phillip’s strategy.

  “Warren, we are almost ready now to announce the end of the expansion project followed later by the announcement of the IPO. We will most certainly catch the market by surprise. The announcement of the expansion plan received excellent press coverage and I’ve kept that issue up front with a few comments to the business press. I will soon want to release the news of the acquisitions. I think it best to do it with a press release rather than a press conference. There’s such a thing as overexposure and I want the IPO announcement to be more than just an anti-climax. Are you ready?”

  “Yes, Phillip, we have vetted the companies thoroughly and Bill Cummins has negotiated some very interesting and profitable long-term supply contracts. The company will be in excellent shape for a sale. The acquisitions have been locked in with guarantees that Shaw will not “flip” the companies for short-term gain. The supply contracts are locked in with heavy indemnities for cancellation. The new shareholders will get a well-structured supply chain and some very interesting acquisitions plus severe penalties for backing out or selling off. You’ve seen the reports so you know the income and cost projections are positive and solid. Moreover, we have made a point of acquiring only US-based companies and signing up US-based suppliers. You will be able to say that you have guaranteed that the Shaw Corporation will continue to ‘buy American’ and we will use that in your campaign.”

  “When do you think we can announce the IPO, Warren?”

  “Probably in about a month, maybe two. We have been negotiating with the acquisition targets and the suppliers through the bank that has referred them without identifying Shaw. We will tell them that Shaw is the buyer this week. The contracts have all been negotiated and confidentiality statements signed. It remains only to fill in the company’s name on the contracts, get them signed, and everything is ready to go. Since they have agreed to the relationships and the sale prices no one is going to back out or try to change terms once Shaw has been identified. In fact, I suspect that some of them probably know at the intuitive level that the buyer is Shaw given your announcement of the expansion plan and the nature of their businesses. I feel confident that we can push the paperwork through the SEC without major delays. You can announce the acquisitions and new supply arrangements roughly a week from now.”

  “Good, let’s look to the statement I will make to the public about the IPO. I plan to justify it by saying that many of my friends have suggested that now that the Shaw Corporation is on a long-term stable growth trajectory, it is time for me to think about how I can contribute more. I will say that I have given careful thought to entreaties that I run for public office and I have decided that to fail to respond to this ‘public service calling’ would be selfish on my part. Do we have sufficient support for a candidacy? I will be facing a fairly strong incumbent you know. He will have ample time to adopt a defense strategy to ensure his re-election.”

  “I agree, Phillip. I have talked to several organizers and some Political Action Committees have been set up. With the IPO, money won’t necessarily be a problem, but we will have to break down loyalties to the incumbent and build up your image. The incumbent has some chinks in his armor and we will exploit them. One, for example, is his position on globalization. He can be accused of supporting the export of US jobs while you, with the acquisitions you made, have guaranteed that jobs stay in the USA, at least in the Shaw Corporation. It might help to add that you intend to try to protect American jobs in the Senate now that you have done it as an executive.”

  “I like that! Do we have any significant weaknesses?”

  “Well, the company has Defense Department contracts, so in theory you are familiar with national security matters albeit in limited areas. But you can at least speak knowledgeably on the issues or so the voters will think anyway. Shaw is also a global corporation so you are familiar with international economic issues but we may have a weakness in the area of foreign affairs. However, most voters don’t give a shit about that anyway, at least not for a legislative post. I’ve got a handful of public relations firms lined up for some image development and we can talk about that at a later date and after we have conducted some discreet polls to find out how you are perceived by the voting public.”

  “OK, so it sounds like we are ready to go. Let’s do it!”

  They shook hands and Warren Carpenter took his leave. After Carpenter left, Phillip sat down on his sofa to muse over his statements to the public.

  * * * * *

  The following week Phillip instructed his PR director to put together a press release on the acquisitions. Again, to ensure the kind of coverage Phillip wanted, the release would be communicated to editors and limited to members of the local press and selected business media. Following the exclusive releases, the company would then advise PR Newswire for national distribution. The first media release would give privileged access to the announcement and that would ensure the loyalty of senior journalists. Journalists hated the widespread releases where every Tom, Dick, and Harry got the information at the same time. They didn’t like being treated on an equal basis with their juniors.

  Within the week the press release had been sent as planned, first to senior editors and journalists and then a few days later to PR Newswire. The market reacted favorably to the news and the names of the acquired firms. The reports that Shaw had made some highly intelligent acquisitions were unanimous and Wexler & Santori estimated that the value of the company’s shares would rise sharply.

  Phillip Shaw was beaming.

  * * * * *

  Charlie Mullins was also beaming. The ordeal of selecting firms, analyzing their numbers, following the negotiations through Wexler & Santori had required a lot of work. He was tired but elated. The deals had gone through and he was now free to concentrate on his life with Gina. They were on countdown now. Once the IPO took place, everything else would click into place and they could begin their life together without concern for who knew about it.

  Charlie would still meet with Warren Carpenter and Bill Cummins at least once per week over the next two months. There were filings to be prepared and final details cleaning up the company’s balance sheets and making sure all was prepared for a successful IPO. There would be one last flurry of activity and then it would be over. Shaw Corporation would change ownership.

  He continued his trips to Shoreville for bowling and softball. He noticed Sharon Gallagher hanging around the softball practice field once in a while and he saw her shopping at the Acme Supermarket once. She made it a point to avoid him. Sharon was beside herself with frustration ever since Charlie had turned the tables on her by doubling back
to Shoreville every time she tried to follow him. However, Charlie had made sure that both Bill Gallagher and Bob Simms were informed of his enormous work load with the acquisition projects. He told them that sometimes he had to hole up in a Wilmington hotel so he could meet with the auditors and attorneys working with him. He was sure that the information would reach Sharon and Diane. But he knew they were just biding their time and waiting for a good opportunity to catch him unawares.

  * * * * *

  Within a month-and-a-half everything had been prepared for the IPO and it was time for Phillip Shaw to announce it to the press.

  When Charlie arrived to the Shaw Corporation parking lot on a sunny Tuesday morning he could see the press vehicles and the camera crews unloading their equipment for a press conference. He smiled inwardly, “It’s started, we’re on countdown now,” he thought. He took the elevator up to the floor where the conference room was located and saw the preparations of the camera crews and the buzz of the company’s kitchen staff putting out coffee, soft drinks, and sandwiches for the reporters and their crews. He entered the stairwell to go down to his own floor. He walked by Fred Perkins’ office to see Fred sitting straight up in his chair in a navy blue suit and a light blue plain tie over a white shirt. Today Fred has eschewed his traditional brown suits. “Looks like Fred will be in on the press conference,” he said to himself. He saw Laura Metzer looking at him, “Spiffy, no, Charlie? I’ve never seen him looking so starched. Phillip invited him to be at the press conference. He even put on aftershave instead of his usual Witch Hazel. Like the TV is going to transmit the smell,” she laughed.

  Charlie smiled, “As far as I know Laura, this will be the first time he has ever been on TV. He’s really decked out like a peacock – a discreet peacock of course, but a peacock nonetheless.”

  Laura laughed, “You’re too much, Charlie! Imagine a discreet peacock!”

  “Something tells me you’re going to have an easy day today, Laura.”

  “I sure as hell deserve one, no?”

  “Right on, Laura, see you later.”

  Charlie moved to his office. The whole floor was abuzz with speculation as to what the press conference would be about. A couple of subordinates approached him, “What’s happening, Charlie? It looks like we’re gonna have another press conference.”

  “Looks that way, doesn’t it? I guess Phillip Shaw has something he wants to say. We’ll just have to wait to see what it is so go on back to your work. Nobody’s told me anything.”

  At precisely 11-o-clock Phillip Shaw made his entrance to the conference room. Fred Perkins followed at what he hoped was an appropriate distance. Phillip moved directly to the lectern and Fred took the seat that had been reserved for him at the conference table.

  He began, “Ladies and gentlemen, many thanks for coming. I hope you won’t be disappointed in what I have to say.” He smiled. “Today I want to make a very special announcement. You will remember that 9 months ago I said that we were going to grow this company and do so aggressively. You were all informed of the acquisitions we made to put the company on a growth trajectory”, the reporters were still waiting for the meat and had not yet turned on their tape recorders or picked up their pens. Phillip continued, “I am certain that the company is now poised to grow and grow aggressively and…” Phillip paused for a moment, “can do so without my help or leadership.”

  Suddenly, the tape recorders were turned on and pens started moving quickly on notepads. This comment was not expected.

  “Following the acquisitions I was approached by a number of people who felt that my leadership at Shaw Corporation could be put to good use in leading this country forward to a new level of competitiveness in the global economy. They asked me to consider running for public office where I could have a greater impact than as president and CEO of Shaw Corporation.” Reporters glanced around the room at each other.

  “Obviously, I would not be able to hold public office and remain as an officer of a corporation with contracts with the government so I would have to step down as CEO. Consequently,…” again he paused for effect, “I have decided that the Shaw Corporation will go public.”

  Now the room was abuzz with commentary, reporters checking to make sure their tape recorders were running, glancing around at each other, shifting in their seats as if to hear better, and frantically taking notes.

  “Within a couple of weeks we will launch an IPO to sell Shaw’s shares to the public.”

  Hands flew up throughout the room as reporters tried to pose questions.

  “Give me just another minute and I will address your questions,” Phillip said to the group, “Following the IPO I will begin working on my campaign to run for the US Senate. Now I will take your questions.”

  Every reporter in the room had his or her hand up.

  Phillip recognized first a female senior reporter from a major financial publication, “Mr. Shaw, less than a year ago you said that going public was not in your plans and that you would retire from a larger and more powerful Shaw Corporation. What happened?”

  Phillip smiled graciously, “I am fully aware of what I said. Over the past several months I was approached by a lot of people who felt that I had something to contribute to this great country besides running this company. I confess that I listened to their entreaties and arguments with great care. This company has been my entire life and I told them I was reluctant to leave it. However, public service is a high calling and our economy has been assaulted by the effects of globalization. Jobs have moved abroad and whole communities have been prejudiced by factory closings and massive layoffs. My insistence on buying American and my efforts at keeping our company strong in the face of foreign competition were presented to me as a contribution I could make at a much higher level and influence the lives of more people.”

  The hands flew up again. Phillip acknowledged a reporter from a local publication. “Mr. Shaw, your company has always prided itself on its role in the local community. Won’t going public have an effect on the company’s local presence? Won’t new owners cut back on the various community programs Shaw has carried out over the years?”

  “I don’t think so,” Phillip responded, “a close relationship with the local community is one of the strengths of Shaw’s business. A new owner will not want to change that. Obviously, I can’t speak for the new owners, whoever they might turn out to be, but it is important to remember that one of the principal reasons for the high worker productivity at Shaw has been the company’s dedication to the overall welfare of its work force. No intelligent investor would want to remove one of the supporting pillars of the company’s success.”

  Hands rose again as Phillip recognized another reporter, “Mr. Shaw, a lot of acquisitions and IPOs are followed by layoffs and force reductions. Aren’t you concerned that the new owners might do the same thing?”

  “I’m glad you asked that question. The answer is clearly ‘no’. Had we decided to go public before making the acquisitions that were announced, that might have been the case. We had been losing market share, albeit gradually, and cutting back on our labor force might have been an option at that time. However, with the new acquisitions, the new owners will need every man and woman working for this company and may even have to hire more. I should add that we have locked in the supply arrangements and acquisitions with long-term contracts that include heavy cancellation costs to ensure that the new owners treat this company as an on-going business and not a speculative acquisition. They will have no incentive to cut back anywhere in the company and will have an enormous incentive to pour more resources into a much stronger organization. You should also remember that we have a highly qualified professional management team in the company so I don’t even expect many changes in the senior levels of the company. In fact, one of those capable managers is with me today, Mr. Fred Perkins, our principal financial executive who helped me with the selection of the acquired companies.”

  Fred Perkins lit up and sat even strai
ghter in his chair. All eyes focused on him and he was temporarily blinded by the flashes of the multitude of cameras in the room. He offered a somewhat flustered acknowledgement of the reporters and Phillip’s comment by nodding his head to the group. He was at a loss for words. Phillip smiled inwardly. He knew that Fred was articulate as a rock unless he was yelling at someone. He hoped that no one would ask him a question. No one did.

  Again, hands went up. Phillip pointed to a reporter from a national news service, “Mr. Shaw, would you comment on your decision to run for the Senate? What made you decide to do it? Won’t the Shaw Corporation suffer from your departure?”

  “Well, I would like to believe I will be missed, but I hope that it is as a personality and not simply as a CEO. As I mentioned previously, I am confident of the professional capabilities of the management team I have assembled. I am sure that any new owners will be hard-pressed to find more capable management elsewhere, so the policies and procedures that are in place at the Shaw Corporation are not simply the result of my leadership. A lot of very capable people were behind that leadership. In that regard, I am sure I won’t be missed and the company will not suffer by my departure. As for my decision to run for public office, I truly believe that public service is one of the highest callings an individual can answer. I listened to the people who approached me and I carefully weighed their comments. As you all know, I had a mild heart attack not too long ago and as I said when returning to my job, incidents like that tend to make you look more carefully at your life and what you have contributed. I was perfectly content to remain as CEO of Shaw until others convinced me that I could do much more for my country as a Senator. I would not be a responsible citizen and a leader if I did not respond to that call.”