Sunday, April 24, 2016

Your Modular Factory Has Been Sold - Now What?

Here they come, the victors sweeping in like an occupying army and no one is sure if it will be business as usual, new leadership bringing massive change or if the new owners will simply loot and pillage. Time stands still.

An era has ended and another is about to begin. Employees wonder if the new owners really understand what they bought, when production will resume and will they have a future with the new owners. Modular home builders begin wondering if they should have jumped ship or if they made the right decision in staying on board.

For the factory’s employees it’s time to ask if you’re a redundancy and a cost, nameless and expendable and you’re left asking yourself, “Do I still have a place here?” When the initial dust settles you’ll be asking a different question: “Is today my last day?” Soon everyone it thinking the same thing: “Why don’t they just let us know?”

The employees may want it to be over, but it won’t be that fast, clean, or simple. The new owners are going through a transition too. Despite their due diligence, it’ll take months to roll out their plan. The new owners didn’t just purchase builder lists, brand names, products, and infrastructure. They also bought talent, networks, and institutional knowledge. And that takes time to sort through. Despite the eerie calm, there is plenty happening behind the scenes. And big changes are ahead.

For the modular home builders that have been buying homes from the factory, the big questions are: “When will production restart? Do the new owners really want my business? Will I get a new sales rep and will I have to learn an entirely new system? Where do the custom modular homes I sell fit into their established production? Do the new owners even want what we build?”

Factory employees will now have a new team guiding the factory. You imagine the worst: Cleaning out your office and watching them move on like you were never there. You know the reality: They didn’t hire you. They don’t know you. They’re not invested in your success. But the new team will take it slow. They’re taking a deeper dive into the books. Their consultants are slicing-and-dicing the same data in every way imaginable (and wondering how you survived this long). And they’re scrutinizing every last detail to see what should be cut…and what isn’t being maximized.   

Eventually, the new owners will want to leave their fingerprints. And their intentions will become clear over time. If only you had a skill like one of the production people! They now have the most secure jobs with the new team.

You’re probably harboring some resentment. You’ve suffered through so much change – and you don’t know if you have the stomach for more. Your new bosses may be younger or far less experienced than you imagined. Worse, they may come from a competitor that outflanked you. Regardless, you’re starting from scratch – and all that goodwill and influence you’ve nurtured means little now. The new regime doesn’t care about job titles and achievements; the bigger they are, the worse it is for you. And they could care less about any promises made to you.

Many builders think they have clout but nothing could be further from the truth. The new owners, especially if they were competitors to the old factory, probably have their own network of builders just waiting to place orders. The new team will bring in new Sales Managers and middle management and in a lot of cases consolidate overlapping services with what they already have in place.

The good news for the builders. They will need sales right from the beginning and will absolutely complete all houses already placed with the factory. They will use the same production people to build these houses which will give them a little breathing space while they assess what brought about the downfall of the old factory and been evaluating if they want to continue serving the same builders the old factory had, rid themselves of competing builders to their own builders, decide if they want to build homes like the old factory into the future and lastly if they want to recreate in the newly purchased factory what works for them quite well and profitable in their other factories.

You may have liked how things were. Your routine provided comfort and consistency. But this is their company now. And they don’t have to adapt to you. There’s no sense protecting your turf. Those battles have already been fought. You just don’t know it yet.

Right now, the new owners are digging into every area of the operation, examining their newly acquired business from vantage points that you’d never considered. What’s more, they’re questioning everything.

So get ready to adjust: The style, rules, and tenor are about change. There will be new priorities, policies, personnel, processes, politics, and restrictions. And they’ll flatten the hierarchy, tweak the business model, and tighten the exceptions to increase speed and reduce costs.


William aka "Little Bill" said...

Well written Gary. I am sure this happens every day, no matter the industry. In our small group of modular home building, it hits every one harder.

Anonymous said...

This article is written in extremely bad taste. Many know which factory you are writing about but that doesn't change the fact this site has done more to harm our industry with articles like this than to help with your monthly breakfast meetings. I'm not expecting fluff pieces all the time for manufacturers but lets get out of the playground and be a little bit more professional Coach. Stop playing on peoples fears, you have no idea what the future plans are.

Al Dunn said...

To anonymous 8:57 PM: Gary's promoting the MHBA is one of the reasons that the MHBA is growing stronger. He is the only person willing to sacrifice his time to try and promote the modular home industry and his "monthly breakfast meetings" have brought hundreds of people together that would never have met otherwise. I love reading his articles and insight even though I don't always agree with him. Yes, there is a major problem happening right now and I am surprised he has not written about it yet. This is an article that could be written about any industry and no names were mentioned. Thank you Gary for another great and timely article. Anonymous, grow a pair and put your name to your comments.

Anonymous said...

Great article and very timely

Anonymous said...

I assumed you were staying away from commenting about excel because you only report on facts. Obviously not. If we're playing the speculation game they lets man up and play. I've been caught with large amounts of deposits and engineering fees at plants that have shut down, stop producing, and stop communicating.

If you want to give useful advise to building than please do so. Saying they be fine since the plant needs work is simplistic at best.

Good plant employees will have jobs as long as the plant is running.

Why not speak the truth and use this closing as a case study on what went right and what went wrong. That would be helpful and intellectually accurate.

Anonymous said...

Well said. Been there before and you detailed it perfectly.

josh said...

this is too bad. but the artical is being read by retail buyers (a client of mine brought it to my attention) and this kind of stuff needs filtered some Gary. i wish i saw this excel thing coming and now that there is an association (read. network) we have to find a way to handle sensitive info responsibly for the benefit of the industry. cant we start a restricted blog where we can call each names freely? this is useful info but it must be processed before retail buyers hear it.

Coach said...

Josh, this blog has always been first and foremost for the modular housing industry. If a retail customer reads it and interprets it to mean that an entire industry is in trouble, well that is not the case. Would it be better to not write articles that inform and educate modular builders and factory people and just write about kitchens, hotels and other modular projects and say nothing that might be of some use to the industry.
I wonder what VW thought of the press they recently received or GM back when our tax dollars saved their butts. Should the 'retail' customer not have been made aware of the shortcomings of an industry?
And this is a general article like many I write. I never mentioned any modular did.
My blog is for the industry and it will remain so. If a retail customer reads my blog, I hope they see a thriving, healthy and growing industry with a newly invigorated Association and factories and builders working closer than they ever have.

josh said...

you know i am of like mind and would never question intent nor itegrity. yet you miss the point i am trying to make. i think the article reflects a very intimate reaction which expressed itself personally. we all do it. we all have tremendous empathy for them's whats catchin it today as we would be catchin it tomorrow. i loves the kids expression for it: "it sucks balls!". it is also the way it is in our business. i tell you no bull shit that it is times such as these you take a breath and remember: "this is the business we have chosen". what, you never saw the movie?

when i first hear that the fans were spreading poopie over at the plant it was an unpleasant surprise. were I military I would say there was a failure of intelligence. I have to eat that shit. Some guys got hurt worse. I just feel a little bad and look a little bad and keep going and take care of my client. But I think the bigger lesson I want we should take away from this is that we represent in our own relatively intimate association a network of a very sensitive nature. This is why that poor schmuck anonymous have to be anonymous.

what I am suggesting, before your panties became enwadded and indignant,is the equivalent of a "private room". a restricted forum where industry people talk a bit more privately.

would you set that up please?

i understand anonymous being a little chapped. i understand a lot of guys are hmmmmm. PISSED!! but, we who have chosen this business, no this kindof thing Will sort itself out. There is hardship and disruption. But this is the business we have chosen. It is our business. We need our own little room when it comes to business like this.

let me know if you need help doing that. i will offer one suggestion that comes to mind. our buddy tom h. et al. they have a restricted forum!😱😂

Builder Bob said...

To Josh:
I believe your two comments have done damage to the modular housing industry and one factory in particular than anything Coach has ever written. I reread this article and it could apply to any number of modular home factories that have changed hands over the past decade and to any manufacturing industry.

Personally, I think Coach has shown genuine restraint in the face of what is happening right now and is upbeat about the industry. Your idea of a private chat room where builders could use the same bathroom and guttural language you used in your comment would be a great idea for builders that only want to rant and complain about their factories.

Coach writes with great insight about our industry and I hope he never changes being a great communicator for the modular housing industry.

josh said...

of course I would agree with you if I thought you were right. Plainly you misunderstand me. I can understand one must work with the resources one has. I believe it is good to speak truth without constraint. but I also believe there should be an important, productive, private, venue for industry people. Were issues with XL discussed in such away, it would have been it would have been a monitored conversation. A productive synthesis of the situation at XL as it unfolds could be conveyed to a concerned retail public.

now as to Gary: the man has not a larcenous bone in his body. I do not doubt intent or integrity. But Bob, old buddy, this is a sensitive internal affair and all would have been better served if, through the organized benefits of Association, we have a place to filter information. this is what means "association."

Anonymous said...

Hey Josh, whoever you are, you are the ONLY one on Gary's blog talking about and mentioning a factory by name. Please stop it. If you want a private forum to discuss this BS, create one yourself and see if you can get anyone to discuss it.

Anonymous said...

actually anon that aint so. it has already been mentioned. fraid it is real out there now. i'm mariner homes young fella. don't get upset w me. go get a work out.

Anonymous said...

and it aint bullshit. it is a big factory that shut down last week.