Chapter 34

I left my Dad's office and went back to Joyce's. When I told them what my Dad had told me, their reaction was mixed. Joyce and Eddie were hoping Macklinson's would pay the forty three million. Dale and Michael both wanted us to take over that Southern market.

I hadn't told them what my father had told me about wanting to reach an accommodation with the Macklinson's over sharing the market. I'd tell Joyce later, when we were alone. To the others, it would seem like my Dad had been using us, pretending to be needing our help and advice, when he had already worked out for himself what he planned on doing.

I already knew him well enough to understand that he always had several possible outcomes he'd prepared himself for. What we had seen from this call from Gene, was him being pushed towards one particular option, and even that one had several different paths he could go down.

In his own rigid way, my Dad was becoming increasingly more flexible. He was using Joyce and me, and our brain trust, to increase this new flexibility. I didn't want to discourage Eddie, Dale, or Michael, and I wanted to encourage my Dad to become more willing to adapt to changing circumstances. I wanted them to believe that my father was responding to their suggestions. He was, just not in the manner they believed.

My phone call to Gene Macklinson was a surprise. Instead of getting angry with me over what was, in essence, an open threat, he asked me questions about our plans for expansion into his area. I told him that my Dad decided those things, but he had left Joyce and I in charge of disposing of the Consolidated assets. When he questioned the reason for our raising our asking price for the Consolidated assets, I told him we needed that much more because our other sales hadn't earned us as much as we'd projected they would.

"I told your father that we weren't interested at forty million, or even at thirty seven. Now, you call me back saying you've raised the price to forty three, and saying that if we don't buy it, you'll be forced to come down here and try to open new markets, just like Consolidated tried, and failed, to do. If I wasn't afraid of taking them on, why should I fear taking you on as well?"

"I figured you'd have learned what it costs to protect a territory from a competitor intent on moving in. When Consolidated started competing with you, they were already weakened by other problems. We don't have any of their weaknesses. We've been growing by more than twenty percent a year, for the last five or six years. We can afford to go into a new area and compete as hard as we need to. We wouldn't expect to make profits for the first four or five years. We make most of our money with our other divisions anyway."

"Consolidated never really made a dent in any of our core markets. They were a nuisance rather than any real competition."

"They didn't have our sales force, or our willingness to absorb early marketing losses. We have the manpower to blanket the whole area, hitting every grocer in the region, giving them sound financial incentives to switch their business over to us."

"If you're so strong, then why are you even bothering to call me?"

"It was my Dad's idea. I wanted to call you to try to make an appointment for our accounting people to come down and go over your books, with the idea of trying to buy you out without us having to get into a price war over grabbing market share. My Dad said you have a family business, just like ours. He said it was more than just a company to you and your family, and, because of that, you probably wouldn't agree to sell. He hopes that you and he can work out some way where all of us can co-exist together. A way that leaves both of our company's in better shape than any of the other options would."

"We aren't for sale, and if we were I don't think you could afford us." He was reacting to what he thought of as an insult, my offering to possibly buy their company. I wished then that I'd made the call in my Dad's office. I wasn't sure how far to push him. My Dad had told me to decide for myself, but I already knew what he was hoping for.

"We got Consolidated pretty cheaply, Mr. Macklinson, and we sold off just enough to get most of our money back already. What we have left is probably worth over a hundred million, and it cost us less than forty so far. We bought Consolidated partly out of my mother's personal funds, plus I kicked in the other one hundred million, out of one of my trust funds. If we bought up your company, we'd probably do the same thing, just sell off all the pieces we didn't need. Mama and I are always looking for something we can turn a quick profit from. It's my Dad who likes to keep businesses together, not Mama and me."

I knew I had made a strong case for his believing that Mama and I could handle the purchase cost of his company. He had to have some idea that I had told him the truth about our rate of growth over the past five years or so. I had given him all the reasons I could think of, to make him not want to take us on in his own marketing region. If Dad was right, he'd see that his best option was to work something out with us. A good portion of our product line was non competing with theirs anyway. They didn't make cereals, and our lines of frozen packaged breakfast rolls and dinner desserts was something they had no competing product to offer either. I called my father.

"Dad, I just got off the phone with Gene Macklinson. I'm pretty sure he doesn't want to get into another war with us. He was pretty relaxed and reasonable on the phone. If he calls you, why not offer to let him represent us in those smaller markets of his, with all of our noncompetitive lines? In fact, if you guys can make a deal, ask him if he wants to buy his grains through me, at the same rate the others pay. Those two things should go a long way towards convincing him we won't try to move in on him in the small markets later. I already made it clear to him that you want to reach an accommodation. If you add in some sweeteners, it will probably make the whole thing seem less like we're strong arming him into doing what we want."

"Did you tell him about wanting to buy his company?"

"I told him, but he didn't sound happy, or interested. I don't think he'd be willing to sell to us. He didn't say much when I told him I'd probably sell off any parts we didn't need. I told him that Mama and I bought Consolidated with our personal funds. I implied we could do the same with his company."

"When he hung up, was he angry at you?"

"I wouldn't say angry. He was unhappy, but I think he knew it was his unwillingness to buy the Consolidated assets that was dictating our latest move. I think he already anticipated we'd call him with something like we ended up doing."

"He won't call back until he's discussed things with his brothers. If you sold him on the idea that you were serious, and capable of following through, he will probably call to see for himself what I'm willing to offer him. I talked to a banker I know in Macon, Georgia. He told me that Macklinson's has been quietly looking for a new source for their operating lines. If they already need operating capital, half our battle is already won. What made you think of having them broker our non competing lines?"

"It seemed like the best way to increase our sales in the region, without having to spend a lot of money introducing the products to the consumers. I don't think the sales will amount to a whole lot, but, if we're really serious about staying away from their small town areas, this would seem like a good thing for us to do."

"I agree. I'm not as certain about that grain business though. I'm sure it would be profitable for you, but it would strengthen Macklinson's, make them more competitive than they are now."

"It would, but it would also make them more dependent on our future good will. It's harder to pick a fight with an ally. If they did, I'd naturally discontinue selling them grains. I thought it would just make it better for them, and make our deal seem less like a defeat in their eyes."

"You weren't thinking about your extra trading profits?"

"I was thinking about them, but I was also thinking about doing it to make it more likely you'd be able to get what you wanted. I've got other bakers who contact me, all the time, wanting to get the same brokerage deal I give our other allies."

"I know. You keep giving them my number, and telling them to call me. I've already told you all the ones I don't mind you helping with this brokerage business."

"Tell me what you think about my ideas on the non competing lines, and the grain brokerage again. I didn't mention either thing to Macklinson."

"If he calls, and if he sounds interested in reaching some accord, I'll ask him about both of those things. You'd need to go see them, and find out how much grain they'd be using. If you do go down, take Joyce and Dale with you. It never hurts to have people on the ground, looking at a competitor's operation."

The next morning, Mama and my Dad flew to New York City. He called every day, several times usually, to see if there was any word from the Macklinson's. He told me, on the fourth day they were there, that he had worked out a line accommodation with a lead bank representing a new consortium. He didn't go into any particulars on the phone, other than to mention that the new credit facility didn't include any guarantees from either Mama or me. I asked him the new amount of the lines, but he said he'd go over everything when they got back. He surprised me by telling me that he and Mama were staying in New York, over the weekend, to see some plays, and do some shopping.

That Friday, Gene Macklinson called, and Myra gave him the phone number and room information for my parent's hotel. My Dad called me at home that night, and we spoke on the phone for more than an hour.

He had spoken with Gene, at length, and both of them had expressed the opinion that it made more sense for them to try to work together. Nothing had been agreed to yet, according to what my Dad said, but, the basic idea of us staying in cities with greater than fifty thousand people, and leaving the smaller cities and towns alone, seemed to be a good beginning framework for fashioning an acceptable understanding. There were some questions about what constituted a suburb, and what was an independent town or city, but my father was certain it could be resolved, given some time for them to work it out.

Gene Macklinson was sending up one of his children to talk to me, in the coming week, about my grain broker activities. He didn't believe I could make delivery at the spot market prices my father had promised him. I wasn't that sure that I wanted to explain everything about my own grain trading methods that made those prices possible.

My father told me he thought it was necessary, explaining that it wasn't much of a risk for me to show him what I did, because it wasn't something that just anyone could do. I agreed with him, but I wasn't sure that it wasn't something another grain trader couldn't pick up on fairly easily. It wasn't that complex, and, once you saw my computer set up in action, you would be able to understand where my trading signals were coming from.

I was at home Tuesday, waiting for a phone call, from whichever of the Macklinson sons they were sending to see me, telling me he had landed in Bolling. I was going to pick him up and bring him to the house, to show him some of my brokerage statements, and to try to acquaint him, somewhat, with my trading program. I still had reservations about doing so, but I'd promised my father that I would. It was almost nine in the morning before my phone finally rang. I was already trading the grains by then.

"Hello?"

"Mr. Parsons? This is Cindy Macklinson. My father told you I was coming?" I was very surprised that I was speaking to one of his daughters. Somehow, I'd just assumed it was one of his sons he'd be sending. I guess I didn't respond quickly enough to her. "Mr. Parsons, is there anything wrong?"

"No, I'm sorry, Ms. Macklinson. I'm watching a price screen, and I got distracted by the way the metals keep moving around. Are you at the airport?"

"Yes, I got here a lot earlier, but they somehow managed to misplace my luggage. I just found it, otherwise I'd have called you sooner. If you give me the directions, I'll take a taxi over to wherever you are."