Chapter 11

Cliff was visiting Jack Crowther, vice president of purchasing at Magna Motors in Troy, Michigan. The meeting was not going well. Crowther had reviewed the business Magna had given to Murphy and the reasons for it. Then he dropped the bomb: "Cliff, I'm sorry you came over today. You would have received the word in Milwaukee tomorrow. We're cutting off Murphy as a supplier, effective at the end of your current order. I guess that's in about three or four weeks. I'm sorry, Cliff, but your quality is not nearly good enough.

"Until now your prices were lower than Ajax, so we still gave you some business. But Ajax has just informed us they will meet your prices and deliver their quality. I can't fight that. Their quality is substantially superior to yours. I appreciate what you told me about the upgrading you have in process, but I'm afraid it's too late. Ajax quality is here now. It's a known quantity.

"You hope to get there, and frankly, I hope you do, too. We like to have at least two suppliers for important products like those you supply. But I can't live with the level of rejects you've been shipping me over the last few years."

The two men were alone in Jack's office. Nevertheless, Crowther looked around and then continued in a confidential tone, "Cliff, we have done business with Murphy since your company got started. We feel we owe you, so I'm going to tell you something that could get me fired. We're alone, so if you even hint at it, I'll flatly deny anything was ever said.

"Cliff, did you have something going with George Simpson's daughter?"

Cliff admitted that he did.

Crowther nodded and continued, "Simpson hates you with a passion! We were told that price was not an issue. Ajax would match your price at any level. Then the son of a bitch starts yelling that no one could say goodbye to his daughter." He looked at Cliff thoughtfully, "Did you?"

Cliff didn't know what to say. He found Jack to be a very straightforward guy, a guy he would like to work with. Since he knew much of the story anyway, Cliff saw no harm in telling him the rest. "Jack, she referred to me as her fiancé. I never proposed marriage — or anything else — to her. Then I met Sandra Donnell. Jack, I'm madly in love with her. She's ... Well, she's going to marry me."

Then commenting on the cancellation, he added, "Jack, I can say just one thing: We're going to beat Ajax on price and on quality. I've been at Murphy for less than two months. My people know you're right ... unfortunately. I'm sorry this has happened, but I understand. I hope you'll see me when I come back in a few weeks with guaranteed higher quality. Will you?"

"I sure will, Cliff. Just between us, George Simpson is an insufferable son of a bitch. I don't like him, but more important, we don't like him. He does deliver reliable quality, though. But do you hear what I'm saying?"

Cliff nodded, left the office and went to a pay phone. He called Sandy back in Milwaukee. "Hon, the roof just fell in. We just lost the Magna Motors business. I don't have to tell you where that leaves us."

There was silence for a few moments. Then Sandy said, "Cliff, I'll tell Steve immediately. I guess we'll just have to hustle for business to try to make it up. Darling, I love you and miss you. Please, may I pick you up at the airport tonight?"

"Honey, I would love it. You have the flight information. I'll call you at the office or at home if anything changes."

When Cliff hung up, Sandy called Steve Muller. "Could you come in here right away?" He said he'd be right there, and moments later was. Meanwhile Sandy was on the phone to the Bank of Chicago, and Charley Adams. "Charley, this is Sandy Donnell. I'm calling to alert you that we're going to be drawing into our line next Monday. The first take-down will be $25 million. Does that cause you any problems?"

"Of course not, Sandy. And since you called, I want to thank you again for your business. You and Cliff told me what you would do, and you're doing it precisely as you laid it out. I appreciate it and so does the bank's top management. I also appreciate the courtesy of the phone call. You'll have the $25 million in your account on Monday morning."

She went into Cliff's office and went behind his desk with Steve following. She felt it was time to act like the alter ego Cliff had said she was. "Steve, I've just had terrible news from Cliff: Magna has canceled its order. The business we ship on the present contract is the end. You know as well as I do that it's over 50 percent of our volume.

"Fortunately, we're in an excellent cash position. I just picked up another $25 million from the bank. Along with the savings from the layoffs, the cash management pick up, and the money from the sale of our stores, we're in good shape that way. But, Steve, we've got to get some new business." She avoided a grim facial expression as she spoke to him. "I wanted to tell you alone. Now what do you want to do? My inclination is to have a council of war in the board room with whichever senior people you have in the office today. Do you agree?"

As Steve looked at her, he realized three things. First, she wasn't panicking. Second, she was doing exactly what he figured Cliff would do if he were here. Finally, she owned the place, but most importantly, she knew it. "Let me get the guys together, Sandy. Could we meet in thirty minutes? I may be able to reach some more people who aren't in the office right now. And thanks for telling me alone. I appreciate it."

Thirty minutes later Sandy was standing in the board room with an easel pad set up. Steve and Jane came in. Jane told her how sorry she was. Looking into Sandy's eyes she saw that her former roommate was quite calm. Jane gave her hand a warm squeeze and took a seat. In a few minutes there were seven senior sales and marketing people in the room.

Sandy began with her voice grim, "I just received very bad news — the worst possible news. Magna Motors has canceled its contract with us. With the cancellation goes over half our volume. I'm sorry to tell you so baldly but there's no way I know to sugarcoat news like this. All we can do is pull up our socks ... or our stockings," she said, smiling at Jane, "and get more business. But where are we going to get it?"

Jane was the first to speak. "Sandy, I have an idea but it's so far out, I need some help. Could we get Bill Stevens and Max Kaufman in here, quick?"

Sandy didn't ask questions. She called the shift superintendent and said she needed to see Max Kaufman in the board room immediately. She then called Bill's office. In moments the two men arrived in the room. Sandy quickly briefed them on Cliff's message. Then she turned back to Jane and said, "Okay, roomy. You have your audience. What now?"

Jane plunged right in. "Last week I met with Kenichi Saito, the general manager of the Kaga Motors plant in Michigan, along with his top people. It was a fascinating meeting. At the beginning, I didn't know whether to bow or shake hands and neither did they. It was odd. As you know, we've never called on them before. It turns out no other American parts supplier has either. The result was I didn't see the junior purchasing guy I had an appointment with. Instead, I saw Mr. Saito himself and his entire executive staff!

"They were surprisingly pleased to see me. It seems they have two major problems: The first is the distance from their suppliers in Japan. The lead times for ocean transport are murderous. The result is there are a lot of parts shipments that come by air: JAL [Japan Airlines] to Anchorage and then on to Detroit. I don't have to tell you what that costs! The second problem is the very strong Japanese yen. They are producing cars here to avoid getting killed by incurring yen costs and selling in dollars. Net, they're very interested in working with us.

"But there's a very big 'but': They are used to zero defects and just-in-time shipments. The way it's supposed to work is that when they're down to the rings and valves to assemble about two more engines, a truck drives up with more rings and valves. I'm exaggerating obviously, but not by very much.

"Frankly, the service and quality they're used to is what Cliff is trying to gear up the company to provide to all our customers. The question is, Mr. Stevens and Mr. Kaufman, dare we try for it now? I can virtually guarantee us an order. One! Can we produce against it? It's scary. I didn't even tell this to the father of my future children."

She looked at Steve and said plaintively, "I'm sorry, honey. I was scared. I thought I would put it on the back burner and save it for when we were really doing what we all know we can and should do.

"Dare we go for it now? Remember, this is all or nothing. I don't see us getting two trips to the plate. We get a hit or we forget it."

Sandy's face had been impassive throughout Jane's recital. When Jane finished, she looked at Bill Stevens. "Bill, you heard our Key Accounts Manager. We have a shot at a major new account. What's the status of our production equipment right now?"

Bill swallowed hard and said, "We've got six machines in A-1 condition: better than new. I'll have a seventh next week and could have the eighth the week after. Whether we'll need all ten, I don't know. But Sandy, we have an important friend at Micronics. If we ordered new machines, I think we could get two brand new ones in one hell of a hurry. Our statistical quality control is in place ... on paper. We've done it for practice, but I've been waiting for Cliff before we shift over. I guess that's about it."