Moog is a worldwide manufacturer of precision control components and systems. It was started in 1951 by Bill Moog out of the Buffalo, New York area. The Japan operation was started in 1970. Our head office is based at the plant in Hiratsuka, Kanagawa prefecture.
Our local expat, and head office management had been in touch with TMT off and on since 1983, mainly over recruiting and other Human Resource issues. Although I was at Moog in those days, I was not familiar with TMT. We faced some of the challenges TMT gets involved with, and a Japanese manager recently hired by Moog from the outside, had worked closely with Mr. Nevins at his former company. They had had to do a staff reduction of about 100 people including those at a factory in a distant regional area. TMT also helped them adjust their Rules of Employment, Salary, and Retirement regulations at the same time.
We did not need to have that done, but we were about to make an acquisition of a direct competitor – a very direct competitor. This was also a regional company with about 70 employees. Unlike Moog, it was unionized by a rather strong upper-body union.
Our goals were to have operations at Moog smoothly continue, retaining key people, and because of the difficult business environment, of course needed to minimize the cost of the acquisition itself, and the ongoing costs of running the newly-acquired business; maximize speed – getting the business up-and running at Moog as quickly as possible; retain key acquired employees, encouraging 15-20 to accept job offers at Moog; minimize legal challenges – from the union, employees and government agencies; maintain operations, customer service, etc. during the transition of business from the acquired company to Moog.
Things were complicated and made difficult by a number of factors: we had been such tough direct competitors, a disproportionate number of employees of the acquired firm would no longer have jobs, the two locations were in no way a commutable distance apart, and for example, at the first meeting we attended with Tom Nevins with the outside union officers, they told of one of their member companies that had just done a staff reduction for an extra severance package of 48 months! This was many times the size of the severance package we would be able to pay to make this acquisition economically viable. Also since we wanted to have a planned and controlled rationalization with some people leaving within a month, others staying on for transition for 5 months, and others joining Moog, it was critical not to make the severance package so attractive that people we needed and wanted would definitely not want to stay on and move to Hiratsuka.
We needed to be able to as much as possible pick the people with the skills and backgrounds that complemented the skills we already had at Moog. We also needed the people to move to Moog who would ensure there is a smooth transition of business from the acquired company and Moog.
I first went over by myself to TMT to meet Tom Nevins in early December 2001. (The acquisition would basically be explained, and implemented in front of all acquired employees, with job security issues resolved, four months later in April 2002.) We had our initial meeting in Japanese, and we laughed when I slipped over some of the relevant documentation written in Japanese and had him read it. He knew what I was doing so he chose to read it aloud. We wanted his help and reinforcement with the overall project plan, and creation of the three different letters tailored to the three different groups of selected employees. We were also interested in his experience in working things out with, and dealing with unions. I had not managed in a union environment, and Moog worldwide tends to be union free.
Tom was a big help to us, caring and insightful. He spent well over 100 hours with our team, pretty much around the clock on extended stays in the Nagoya area, as we worked with the acquired company’s team. You get to know someone well. He fit in pretty well with the Japanese team, but of course tells more jokes than most of us. Tom had helpful perspective and inputs at our task force meetings, in breaking the news that the acquired company would be closed, and at the union discussion and collective bargaining meetings. He also made sure we held the line in not letting people on the transition team leave immediately or early, although they were strongly pressing for this.
Mr. Nevins repeatedly said he had learned a lot from us. He was surprised about my use of the word ‘Kibotashoku’, or ‘voluntary retirement’, when that was not really what we would implement. He learned that some ambiguity, and more vague positions at certain points, could still end up with acceptance of our initially intended approach. The results were the same, and everything worked out as we had planned. Good planning, good full communications, honorable and reasonable responses from all involved, and long hours of hard work on the part of many people, were responsible for this success.
I can imagine many experienced and competent clients, both Japanese, and expat, are unsure of themselves, and whether they can do the things they want to do when they first make contact with Mr. Nevins. That could include things such as successfully carrying out a ‘controlled exercise’ or a designated, selected staff reduction, succeeding with only a moderate severance package, or maintaining a union free environment. Tom Nevins confidently indicates a client can achieve goals, which few other in-house, or outside experts will commit to. We plan and work together, and gradually our most ambitious goals come to fruition. I can also imagine that clients forget, lose track of their mindset, their lack of confidence, and the apprehension the client felt at the beginning of a project. Success is incrementally reached and we ourselves take it for granted. When the challenge is successfully completed, we should keep our perspective, and remember that many such projects fail, and do not get nearly the same favorable results that Mr. Nevins helps his clients gain.
Tsutomu (Tom) Harada
Moog Japan Limited