Chapter 18

The cold weather testing was planned for the first prototype. However, the design changes we planned to incorporate in the second prototype, would require that we redo the tests. We rescheduled the tests be performed during the testing phase of the second prototype. It was the first test Jeff and his crew performed. Jeff and his crew took the second prototype and RV to Alaska to perform the cold weather testing. They found a few problems and modified the second prototype accordingly. They then reran the tests and confirmed the modifications corrected the problems. There were no new problems found during the second round of cold weather testing, either.

As we prepared for our trip to New Zealand, Jeff and his automotive crew started the endurance testing of the second prototype. It was to be three weeks of back-to-back tests. The data from the tests he had completed, so far, made us all happy.

Jeff and his crew were in the second week of testing when we were due to depart for New Zealand. Ward wanted to be at the racetrack for all three weeks of testing, but he had to go with us to New Zealand. He said we could have deferred the trip, but all he would be doing at the racetrack would be sitting in a stadium seat watching the car go round and round the track. He felt the trip was more important than his presence at the racetrack. Jeff could manage the testing without him.

We decided to use the plane we purchased for our Chocolateen travel needs, and our regular flight crew. We would be island hopping during our flight, and our total flight time would be close to sixteen hours. Our pilot, Bob Simon, and his copilot, Jill Simon, would need at least one crew break enroute to New Zealand. In planning the trip, we let them determine our route. They wanted to layover in Hawaii on the outbound flight, and in Fiji on the return flight.

We arrived at the hanger that we leased at the Van Nuys Airport and our flight crew was ready to depart. As our plane started taxiing toward the runway, I heard Ward ask Frank a question, and I cringed inside. I just knew that he was going to relate the trip from hell once again.

“Frank, I was thinking of buying a plane, but after I saw the costs, I decided it wasn’t worth it. Why did you and Jim decide to buy your jet?”

Everything was quiet for a minute, and then I heard Frank begin his story of that hellacious trip.

“Ward, when the Chocolateen Corporation first expanded its sales to foreign markets, Jim and I had to make numerous business trips overseas. We talked about buying an aircraft for the corporation to use, but the cost to buy, operate, and maintain a plane seemed too high to us.

“One morning we left for a trip to London. The meeting was important for the corporation, so we had put an extensive amount of effort into our presentation. The drive to the airport went okay, and we got to London with plenty of time to spare.

“The amount of presentation materials we had to take with us meant that we would have extra baggage charges, so we couldn’t use curbside check-in. There must have been several flights leaving at about the same time for the check-in counter was backed up. The line was very long and the counter appeared undermanned.

“It took a long time for us to get to the counter and check-in our baggage. Then we had a long line at the TSA security checkpoint. Their metal detectors were down, so they had to use their hand scanners to check everyone in line. The terrorist alert level was also high, so that meant they were taking extra care in checking the passengers. To make matters worse, our gate was at the end of the concourse, and the walkway was cluttered with people and carry-on baggage.

“Our plane left late due to the slowdown getting through the TSA checkpoint, but we were on board when it finally left. The only problem was the woman sitting behind us had a baby traveling with her, and the baby had colic. Twelve hours of sitting in small seats with minimal legroom in front of a loud, fussy baby was not pleasant.

“We didn’t know it before we left, and it probably wouldn’t have mattered if we had, but the baggage handlers were disputing a labor issue. Their tactics were not the usual going out on strike or a work slowdown. What they did was misroute some of the bags that were going onto the planes. One of our presentation material bags went to France, while we went to England. Of course, as Murphy’s Law predicts, the wayward bag was filled with the most important portion of our presentation.

“We landed at Heathrow airport six hours before our meeting, and that was when we learned that we were missing a bag. The office handling lost luggage was swamped with people. It took over an hour before we could get to the head of the line to report and fill out the forms for our lost luggage. Once we filed our papers, we were told that the airline would forward our bag to our hotel when it arrived.

“We breezed through customs with no problem other than the normal waiting in line for our bags to be inspected. Check-in at the hotel went smoothly, and according to plan, we still had time to cleanup before we had to leave for our meeting.

“Well the meeting was a semi-disaster. Without the critical presentation materials, our presentation was a shambles. Our potential customer was very understanding and tolerated our difficulties. We were embarrassed by the poor presentation, but we were able to impart the knowledge of our product and services to the customer. We were fortunate in that the following month, our prospective customer signed a contract with us.

“To add insult to injury, we had a message on our room phone informing us our errant bag had been delivered just after we left for the meeting, and to contact the front desk and they would have it sent to our room.

“Over dinner that evening, Jim and I decided that for critical business travel we would not place ourselves in the hands of the commercial airlines and airports again, if we could possibly avoid it. For the next year, we contracted with a lease agency for all of our travel needs, which was mainly domestic travel. We found that the lease company maintained a limited number of aircraft on a full-time basis. More than half of their aircraft were leased from the aircraft’s owners when the owner did not require their aircraft. We had several problems due to the lease agency not having enough aircraft available to support their clientele’s needs.

“What finally tipped the scale for buying an aircraft, was the number of trips Jim and Kirk were making each year. I only made an occasional trip, but they were each averaging three trips a month. We did a cost comparison between air travel on commercial, leased, and privately owned aircraft. When we factored in our time, a leased aircraft was the best deal for us based on cost. An owned aircraft was only a bit more expensive when we included what a lease company would pay us for the use of our plane, and commercial travel was close to an owned aircraft.

“However, when we considered that both of our families would go on a trip at the same time, and the problems we occasionally had with leased aircraft, we decided to buy our own aircraft. The only question was what to buy.

“Jim and I set up four requirements before we presented the idea to our wives. The plane had to be large enough to accommodate both of our families with some allowance for expansion plus guests and their families. We wanted to be able to travel non-stop to any place in the country that we may want to do business or that we may wish to visit. However, we were amenable to a refueling stop for overseas travel, if needed. We decided it needed a bedroom area, an office area, and a lounge. We also said no economy seats for passengers! If we had to sit in a plane for twelve hours or more, we wanted to do so in comfort.

“The fun part of the decision came when we proposed the idea to our wives. I think I’ll skip that part of the story. Let’s just say that some of our wives agreed that buying a plane was a good idea and the others didn’t. We ended up with a negotiated settlement. All of our wives agreed with us that for convenience, it made sense to own a plane. They hated commercial flights and the TSA rules, especially the ones that prohibited bottles of juice and formula for the kids. Jim and I agreed that we rarely flew overseas, so a short-to-medium range aircraft would be acceptable as long as it could go coast-to-coast non-stop.

“We looked around and found an Airbus A319. It listed at $92 million new, and that did not include the costs necessary for remodeling it to our needs. We bought a used plane for $23 million that was already setup in a VIP configuration. Jim, Kirk, and I like it, but our wives say it is not family friendly. When they said that, we ask them to explain family friendly. Once they explained family friendly, we told them that ‘family friendly’ required a larger more expensive plane. They agreed we should buy the A319. Lately they have been asking what more expensive means and how much larger.

When Frank finally ran down, he and Ward got into a discussion of why Ward needed an airplane. The two of them pulled out their laptops and headed for the office area. I decided to take a nap. Before I fell asleep, I could hear them discussing the merits of small versus large aircraft, cabin height and width, and operating costs.

Our Flight Attendant — Carol Ashworth — woke me up half an hour out of Hawaii to let me know that we would be landing shortly, so I could visit the bathroom before we touched down. It was early morning, and Oahu was warm and humid.

We had decided on a twenty four hour layover, so while Bob, Jill, and Carol were seeing to the plane, the rest of us headed to the hotel and checked in at the front desk. There were eight of us so we had reserved two, two-bedroom suites for us; Bob, Jill, and Carol were a threesome, so they only needed one large bed. Once Bob, Jill, and Carol arrived and everyone had a chance to clean up, we went downstairs for lunch.

The Chocolateen Corporation had a distribution center in Honolulu, so Frank, Kirk, and I were going to pay them a visit after lunch. Ward and Sam decided to spend some time shopping for souvenirs and gifts, while Bob, Jill, and Carol were going to relax on the beach.

Our Honolulu subsidiary was one of our smaller subsidiaries, but once we relocated, it would become a central transshipping point for distribution of our products to the US. Chocolateen II would be shipped by ocean freight to Honolulu and forwarded to our distribution centers in the US by airfreight. Some of Ward’s inventions would be distributed in a similar manner, but the majority of our US-bound solar vehicles would be shipped to Long Beach as ocean freight.

Our selecting Honolulu over one of the west coast ports for our distribution point had been an interesting discussion. The main factor was the average time required from the time a ship arrived in port until its cargo cleared customs. That factor was affected by the number of labor disputes the west coast had been having with the unions. The additional cost of airfreight was offset by the possible delays a strike would cause in delivering our product to our customers.

The Honolulu Chocolateen Distribution Center was not a large operation for it only distributed Chocolateen to the Hawaiian Island Chain. The manager, Evan Strophe, was an energetic salesman, and we were very pleased with the distribution network he had established. Frank and I believed he would be the ideal candidate to be in charge of the US distribution center we wanted to create.

The three of us entered the front door and we were met by a pleasant, friendly receptionist. Frank said, “Good afternoon. We are here to speak with Mister Evan Strophe. Is he available?”

“Yes, he’s in. Who should I say is calling?”

“Tell him that Frank Tolliver, Jim Schneider, and Kirk Jonas would like to speak with him this afternoon.”

The receptionist pushed a couple of buttons and said, “Mister Strophe, there are three gentlemen here to see you but they don’t have an appointment. Their names are Frank Tolliver, Jim Schneider, and Kirk Jonas ... Yes, Sir. I will.

“Gentlemen, Mister Strophe said for you to take a seat and he will be right out.”

It took Evan a few minutes before he appeared. “Sorry, Frank, I was in a meeting with my warehouse manager when Toni let me know you were here.”

Frank said, “That’s not a problem, Evan. We are on a business trip and have a twenty four hour layover. Jim and I wanted to talk with you, and we made a last minute decision to speak with you today if you have time available.”

“Today will be fine, Frank. My warehouse manager was the only person on my schedule for this afternoon, and it is a routine matter. We can finish our conversation tomorrow. Let’s go down to the conference room where we can have some privacy. Toni, please come with us, so our guests can give you their drink orders.”

Once we were seated, Toni took our drink orders and went to the break room to get our drinks. She returned a few minutes later, and as she left Evan said, “Thank you, Toni.”

I spoke up, “Toni seems very good. She is not the receptionist I remember from my last visit. Has she been here long?”

“No, Jim. Toni is with a temp agency, and she has only been with us for a month. Kay got married and she is on maternity leave for another two months. Toni has fit in very nicely, and I wish I could keep her, but I think and hope Kay is going to come back.”

I looked at Evan, and asked, “Evan, what do you know about the plans Frank and I announced about a new corporation?”

“There are a few rumors on the company grapevine, but other than that all I know is what I read in the newspapers.”

“All right. Frank and I decided to create a second corporation that will manufacture and sell several new lines of products. We are on our way to New Zealand to see if it is a suitable location for the new corporation. If we setup our manufacturing center there, we expect that Honolulu will be the distribution hub for the United States for many of our products.

“Once we start manufacturing the new product lines, we will need people here to handle product sales and distribution. We are thinking of transferring Mike Halper here to be the US Distribution Manager. We would like for you to be the General Manager for our US operation. There is no big rush right now, so take your time and think it over. It will take us several years before the first product hits the market place and that will be a revolutionary electric vehicle, but its initial configuration will be right-hand drive. We will initially market the car in New Zealand, but as with all new products, we expect we will encounter a number of problems. Once the problems have been worked out, we will branch out to Australia, and if the market warrants, we will convert the vehicle to left-hand drive and we will initially market it in the Hawaiian Islands.

“Do you have any interest in the position, Evan?”

“Yes, I’m interested, Jim, but I have a few questions. What did you mean by my being the General Manager of our US operation?”

“Evan, what we are planning is for you to relinquish your position as sales manager of the islands and become the Chocolateen Corporation’s General Manager for all of the US. What that means is the Distribution Manager and all of the current US Sales Regions will report to you. For you to understand our future plans there is one critical piece of information I need to give you and this must remain a secret for now. Once our operation in New Zealand is stable, we will relocate the Chocolateen production plant and the company’s Headquarters to New Zealand.”

Evan’s mouth would have made a good fly trap. It took him a few minutes to come to the realization of what we had just told him. We would be changing the structure of the company and he would be the key person in the sale of all the Chocolateen sold in the US and manage the sale of our new company’s products within the US.

“Evan, at the moment, we are planning for the Chocolateen sales, production, and distribution operations to continue without change. Once we begin production of Chocolateen in New Zealand, Honolulu will become the distribution hub for Hawaii, Alaska, and the continental US. The structure of the existing sales regions and groups will remain as they are, but instead of reporting directly to Headquarters, they will report to you. Between now and the time we make the change, you need to locate and train a replacement Sales/Distribution Manager for the islands. As our General Manager, you are going to be too busy overseeing all of the sales regions and the Distribution Manager to do your current job.

“You need to keep in mind that the electric car is just the first of many new products that we will manufacture. We want our automotive line to be well established in New Zealand and Australia, before we begin manufacturing cars for the US market. Therefore, some of our follow-on products will probably be marketed in the US before we start our automotive line here. As our new products are introduced to the islands and continental US, we will have you recommend if we should have our existing Regional Managers expand their staffs or establish separate sales groups.

“We are not sure how we want to handle the sale of our electric vehicles. We expect to do a great deal of business in New Zealand and Australia. At the moment, we are leaning toward corporate owned dealerships for those locations. However, for the US market, we are thinking of independently owned dealerships.”

“Jim, how many product lines are you and Frank planning on introducing?”

“We aren’t sure, as the electric motor, battery, and solar cell that the car uses can be adapted and used with every product that currently uses a gasoline or diesel engine. In addition to those products, there are at least a dozen spinoff products and some of those are currently in the R&D stage. There will also be a revolutionary computer that runs a new operating system, and the operating system will be able to run the current Windows, Apple, and Unix programs.”

“Jim, I trust you and Frank to do what you say you will do. What you are describing sounds like a quantum leap in technology. If that is true, then the new company is going to make a major splash in several marketplaces. It sounds as if I should be doing something now to prepare for the expanded work load, but I’m not sure what needs to be done first and how much lead time I will need to establish the necessary organization and facilities.”

“For the moment, Evan, just keep on doing what you have been doing. Frank and I need to put together an expansion plan for the new corporation. Once that is done, Frank and I will sit down with you and go over it. As I said, you have plenty of time to think about things. However, it wouldn’t hurt for you to start thinking of and doing some preliminary planning for what you might need for twelve diverse product lines in terms of a US-wide organization and facilities. Keep Toni on as a temp for now, if she is acceptable to you.

“If you had a choice between Kay and Toni, who would you prefer to have working with you?

“Kay! Toni is very good, but I suppose you could say Kay and I are on the same wavelength.”

“I am favorably impressed with Toni, Evan. When Kay is ready to return, you keep Kay as your assistant. If Toni is still an outstanding worker and you are happy with her, then we can use her. The woman who is currently assisting Mike Halper is pregnant and around five months along. She has notified him that she will be taking terminal maternity leave, so he will need a new assistant. I’m thinking that if she is willing, we can move Toni out to Van Nuys and have Mike teach her the distribution side of things, and then have her move back here when we transfer Mike here. Of course this is speculative for we need to talk with Mike first and explain our plans.”

“That sounds like a good idea, Jim. Do you want to talk with Toni now?”

“No, let’s wait and see how she works out between now and the time Kay is ready to return. It will give Kirk plenty of time to have our HR people do a background check on her and to checkout her references before we hire her away from her agency.”

“Jim,” Frank said, “I think we should meet with Evan and Mike here in Honolulu the week before Kay returns. We can go over our expansion plans and Mike can get a feel for how he and Toni would get along with her as his assistant.”

“I’m curious about something,” Evan said. “You talked about a new corporation and product line. From a marketing point of view, what are you going to call the corporation?”

Frank, Kirk, and I looked at each other in surprise. We had gotten this far and we hadn’t even given our corporation’s name any consideration. “Well, we’ve been so busy with other matters, Evan, that we haven’t given any consideration to a name,” I said.

We all started laughing at our oversight.

Bob, Carol, and Jill decided on a movie followed by a late dinner. The rest of us were enjoying our meal in the hotel dining room. We explained that we had confidential business to discuss so the maître d’ accommodated us by seating us in a quiet, unused portion of the dining room.

Once we had given our order to our waitress, Frank said, “Our meeting with Evan went well today. We came away with two things of importance that we need to discuss. The first is that we need to establish a realistic schedule for establishing the corporations, constructing our facilities, and beginning production of the products. The second thing is to find names for our corporations.”

Ward said, “I have talked about my corporation’s name with my family, and we like Conrad Research and Development. What have you been thinking of for your corporation?”

“That’s the problem,” Frank said. “We have been so busy on other things, we haven’t discussed it yet. About the only thing we are in agreement about is that it needs to be friendly, short, and snappy; something the public can easily identify with that can be used for product branding of all the products.”

Sam said, “I agree with you about your corporation name. As far as the schedule goes, I think we should work on it during the flight tomorrow. What project management software do you use?”

I replied, “Our Corporation has standardized on Microsoft’s MS Project. What do you use?”

“Actually,” Ward said, “we haven’t needed project management software until recently. We tried a couple of the demo packages but weren’t happy with the results. We can set up a schedule using your Project software, and you can show us how it works. If it is better than what we’ve seen so far, we will get a group license for ourselves.”