that the company must undergo another change if it is to survive into the next century.'
Katherine looked over at Freeman, and he knew exactly what she was thinking. What right did this man have to say that he j>%
knew what her father would think? He'd never met the man. And if they had met, Freeman doubted that {Catherine's father would have been impressed by the thrusting young banker.
'The whole defence industry is labouring under heavy debt with shrinking profits and low margins, and it seems to me that the larger contractors have sought various solutions: some have gone after more international orders, others have diversified into other businesses, down-sized or gone into joint ventures. What I have in mind for CRW is a combination of these solutions, tailored to meet our needs.'
Freeman exchanged worried looks with Anderson and Katherine. He didn't like the way the conversation was going, but Nelson was effectively holding a loaded gun to their heads. Without the bank's backing they were dead in the water.
'Joint ventures, coupled with aggressive down-sizing,' Nelson continued, oblivious to their looks. 'That's the way to go.'
Freeman frowned. 'Aggressive down-sizing?' he said.
'Many developing nations are lining up to get involved in licensed production of weapons systems. It gives them an opportunity to build up an indigenous defence industry, while at the same time earning foreign currency. There are lots of examples, especially out in Asia. Countries such as Singapore and South Korea, Indonesia and Taiwan. Of the countries I've looked at, Taiwan and Singapore have the most appeal.'
Anderson leant forward, his chin in his hands. 'The most appeal for what?' he said.
'For the sub-contracting of the company's manufacturing interests.' Nelson waited for them to react.
Katherine's mouth dropped. Even the portrait of her father seemed to express disbelief. 'You mean close down the factory?' she said.
'Only the manufacturing facilities,' Nelson said. 'Sales and administration would continue to be based here, but obviously a smaller workforce would require fewer support services. Personnel, accounting, clerical - there would be savings in all departments.'
Freeman held up a hand like a policeman stopping traffic. 'Wait just one minute,' he said. 'Are you saying that we stop THE BIRTHDAY GIRL 71 manufacturing here in Maryland? That we lay off our employees and move to Taiwan?'
'I estimate that we would save approximately six million dollars in operating costs in the first twelve months, though admittedly that doesn't include the one-time closure costs. But diere would also be one-time profits from the sale of the company's properties.'
Freeman shook his head emphatically. 'Let's get something straight,' he said. 'We're a manufacturing company. We make things. We make things and we sell them. That's the way it's always been. That's the way it'll stay.'
'It doesn't make sense,' Nelson said patiently. 'You can halve your manufacturing costs by switching production to the Far East. You can put the company back on a firm financial footing.'
'This is a business,' Katherine protested. 'It's made up of people. Human beings. We owe them our loyalty. Some of those men have been on the payroll for more than thirty years.'
Nelson sighed patiently. 'It's those men who are dragging this company down,' he said. 'Think of CRW as a tree, a tree that's starting to die. You can either stand by and let it wither away or you can prune the dying branches.' He looked at the board members one at a time as he spoke, like a defence attorney giving his closing speech to a jury. 'And I can tell you here and now, if you don't do something, the bank will. In my opinion, you have something like six months to act. After that there'll be nothing left to save. Even Chapter 11 won't be an option.'
'That sounds like a threat,' Katherine said.
'Mrs Freeman, we're a bank, not the Mafia. We don't make threats, we make loans. But we have the right
Katherine looked over at Freeman, and he knew exactly what she was thinking. What right did this man have to say that he j>%
knew what her father would think? He'd never met the man. And if they had met, Freeman doubted that {Catherine's father would have been impressed by the thrusting young banker.
'The whole defence industry is labouring under heavy debt with shrinking profits and low margins, and it seems to me that the larger contractors have sought various solutions: some have gone after more international orders, others have diversified into other businesses, down-sized or gone into joint ventures. What I have in mind for CRW is a combination of these solutions, tailored to meet our needs.'
Freeman exchanged worried looks with Anderson and Katherine. He didn't like the way the conversation was going, but Nelson was effectively holding a loaded gun to their heads. Without the bank's backing they were dead in the water.
'Joint ventures, coupled with aggressive down-sizing,' Nelson continued, oblivious to their looks. 'That's the way to go.'
Freeman frowned. 'Aggressive down-sizing?' he said.
'Many developing nations are lining up to get involved in licensed production of weapons systems. It gives them an opportunity to build up an indigenous defence industry, while at the same time earning foreign currency. There are lots of examples, especially out in Asia. Countries such as Singapore and South Korea, Indonesia and Taiwan. Of the countries I've looked at, Taiwan and Singapore have the most appeal.'
Anderson leant forward, his chin in his hands. 'The most appeal for what?' he said.
'For the sub-contracting of the company's manufacturing interests.' Nelson waited for them to react.
Katherine's mouth dropped. Even the portrait of her father seemed to express disbelief. 'You mean close down the factory?' she said.
'Only the manufacturing facilities,' Nelson said. 'Sales and administration would continue to be based here, but obviously a smaller workforce would require fewer support services. Personnel, accounting, clerical - there would be savings in all departments.'
Freeman held up a hand like a policeman stopping traffic. 'Wait just one minute,' he said. 'Are you saying that we stop THE BIRTHDAY GIRL 71 manufacturing here in Maryland? That we lay off our employees and move to Taiwan?'
'I estimate that we would save approximately six million dollars in operating costs in the first twelve months, though admittedly that doesn't include the one-time closure costs. But diere would also be one-time profits from the sale of the company's properties.'
Freeman shook his head emphatically. 'Let's get something straight,' he said. 'We're a manufacturing company. We make things. We make things and we sell them. That's the way it's always been. That's the way it'll stay.'
'It doesn't make sense,' Nelson said patiently. 'You can halve your manufacturing costs by switching production to the Far East. You can put the company back on a firm financial footing.'
'This is a business,' Katherine protested. 'It's made up of people. Human beings. We owe them our loyalty. Some of those men have been on the payroll for more than thirty years.'
Nelson sighed patiently. 'It's those men who are dragging this company down,' he said. 'Think of CRW as a tree, a tree that's starting to die. You can either stand by and let it wither away or you can prune the dying branches.' He looked at the board members one at a time as he spoke, like a defence attorney giving his closing speech to a jury. 'And I can tell you here and now, if you don't do something, the bank will. In my opinion, you have something like six months to act. After that there'll be nothing left to save. Even Chapter 11 won't be an option.'
'That sounds like a threat,' Katherine said.
'Mrs Freeman, we're a bank, not the Mafia. We don't make threats, we make loans. But we have the right
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