NO LOVE AT XEROX (UPDATED)

NOVEMBER 5, 2019 — LAWSUIT DISMISSED, XEROX TO GET 2.3 BILLION AND IS CONSIDERING MAKING AN OFFER FOR HP.

In a surprising turnaround Xerox will sell its 25% stake in Fuji Xerox, the joint venture with Fujifilm Holdings for $2.3 billion, after activist investors killed the proposed deal. The lawsuit over the failed merger will be dismissed.

According to the Wall Street Journal, the soon-to-be cash rich Xerox may make a bid for HP, the iconic printer and personal computer maker.

This does not bode well for employees of both companies. According to a statement in the WSJ, “Both companies are in cost-cutting mode and a union could afford new opportunities to shed expenses—to the tune of more than $2 billion, the people said. HP in early October said Mr. Lores would implement a restructuring plan that would shrink the company’s ranks by as many as 9,000 people, or 16% of its workforce, and yield annual cost savings of $1 billion. The company outlined plans to revive its printer business, which tends to have higher profit but has struggled as customers buy ink cartridges elsewhere.”

JUNE 18, 2018 -- FUJIFILM SUES XEROX FOR MORE THAN $1 BILLION -- SHAREHOLDERS OF BOTH COMPANIES LOSE

Japan-based Fujifilm has filed a lawsuit in New York alleging that certain investor/activists, namely Carl Icahn and Darwin Deason, forced the company to unlawfully breach its merger/acquisition contract and is, therefore, seeking "punitive damages for Xerox's intentional and egregious conduct" in backing away from the original deal.

“Xerox has recently been subject to the whims of activist investors Carl Icahn and Darwin Deason, who, notwithstanding their minority ownership of Xerox shares, have yanked the Xerox Board in more directions than can be counted.”  

To be expected, Xerox replied...

“Xerox will vigorously defend its decision and pursue any and all remedies available to Xerox arising from Fujifilm’s mismanagement and misconduct.”  

(Fujifilm Holdings Corp v Xerox Corp, U.S. District Court, Southern District of New York, No. 18-05458)

UPDATE: May 14, 2018 -- ACTIVISTS WIN: DEAL DEAD

Activist investors Carl Icahn and Darwin Deason have won their battle to kill the original $6.1 billion deal with Fujifilm. Control of the company has now passed to new management who may still sell Xerox, but at a higher price. Fujifilm is now considering litigation of their own. 

UPDATE: April 28, 2018 -- JUDGE BLOCKS FUJI XEROX DEAL

According to the Wall Street Journal, the Xerox Corp.’s plan to sell a majority interest in the corporation to Fujifilm Holdings Corp. has been temporarily blocked by Judge Barry R. Ostrager of New York’s Supreme Court in Manhattan who alleged that "the transaction was negotiated by a 'massively conflicted' chief executive who was looking out for his own interests over Xerox shareholders’.

According to the Journal, "Billionaire Xerox investors Carl Icahn and Darwin Deason have teamed up to fight the deal, which was announced in January, with Mr. Deason filing the suit seeking to block it." The bad news is that 10,000 Fuji Xerox employees worldwide are about to lose their jobs.

Original Post ... 

The good news is that the iconic Xerox brand will survive, but the actual business will be merged into a new entity, Fuji Xerox. With Fujifilm Holdings, Inc. taking control of Xerox by purchasing 50.1% of the control stock of the new corporation. Xerox CEO Jeff Jacobson will be the CEO of the new Fuji Xerox with Fujifilm Chairman and CEO Shigetaka Komori assuming the position of chairman.

Of course, the deal is subject to shareholder and regulatory approvals. The company is engaged in a fight with activist investors who believe that Fujifilm is getting a bargain and thus disadvantaging Xerox shareholders. 

"FUJIFILM Holdings Corporation announced a revision to its consolidated earnings forecast for the fiscal year ending March 2018. Embedded in the release is the news of the restructuring of Fuji Xerox and will result in the layoff of 10,000 employees worldwide. 

Structural reform of Fuji Xerox

The market environment surrounding the Company’s subsidiary Fuji Xerox has grown increasingly severe. In order to win out through the competition going forward and to realize further business growth, a fundamental structural reform will be implemented to attain a sturdy footing by improving profitability and productivity. The specific measures to be implemented as part of the structural reform are as follows:

• reorganization of the domestic and overseas sales structure;

• closures and integrations of manufacturing bases and reorganization of the development structure;

• revision of product lineups aimed at improved business profitability;

• abolition and integration of head office functions and expansion of shared services; and

• compression of fixed assets.

Through these measures, cost reductions of 50 billion yen are expected in and after the fiscal year ending March 2020, including personnel reductions of 10,000 people domestically and overseas."  

After struggling with falling demand for copiers and printers over the past two decades, Xerox has few options to grow its business. It appears that Fuji Xerox will expand into high-tech labeling and industrial printing applications.

With Xerox it was all about printing technology, even though its famed PARC (Palo Alto Research Center) was responsible for the development of the mouse, windowing, printer control languages, and development tools – all of which found their way to other companies like Apple, Microsoft, and Adobe that became powerhouses in their respective areas. Xerox still has a potent and magnificent patent portfolio that continues to grow. 

As expected, the corporate spin is unimaginative. “The merger ‘will unlock significant growth and productivity opportunities,’ Xerox CEO Jeff Jacobson said in a statement.”

Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?

NO LOVE AT HARLEY-DAVIDSON (06/30/24)

JUNE 30, 2024 — 150 LAYOFFS

In what the company characterizes as “select organizational adjustments," 150 employees are losing their jobs.

According to a company spokesperson, "We can confirm that the company is implementing select organizational adjustments. Aligned to our Hardwire 2 ambitions, we believe these changes will drive cost productivity across the business to allow us to focus on the biggest opportunities for the company."

JULY 9, 2020 — MAJOR REORGANIZATION CONTINUES WITH 700 PLANNED LAYOFFS

The company has announced that the restructuring effort, code-named rewire, under its new CEO, Jochen Zeitz, will result in 500 layoffs in 2020, with a total reduction in force anticipated to be 700 employees globally. This is in addition to the 140 layoffs in June.

The search is on for a new CFO to help secure additional funding, reduce costs, and improve operational efficiencies.

The company appears to be under the influence of activist inbvestors.

JUNE 24, 2020 — 90 EMPLOYEES AT THE YORK, PENNSYLVANIA MANUFACTURING FACILITY.

The company has announced that it will be laying off 90 workers at its York, Pennsylvania manufacturing facility.

The layoff decision was driven by “an adjustment to its production volume” caused by a significant decline for the company’s products in an aging customer cohort and a travel-restricted environment.

According to a company spokesperson, “As course of normal business, Harley-Davidson regularly adjusts its production plan and appropriately sizes its workforce. The company announced it will adjust its production volume, which will result in a workforce reduction of approximately 90 York employees." 

Other layoffs are expected as the company continues to react to changing circumstances.

MARCH 18, 2020 — ACTIVIST INVESTOR’S HEAVY HAND STRIKES HARLEY

Activist investor Impala Asset Management claims that the Harley CEO was fired and they are nominating two directors to the Board.

According to an Impala spokesperson…

“Impala believes that with the right leadership, Harley-Davidson can return to its former position of strength.

We have had significant concerns about the strategic direction and actions taken by the Board under former Chairman Michael Cave’s stewardship for some time – and we have voiced these concerns privately to Harley.

Notably, it took our urging to convince the Board to terminate the prior CEO, Matthew Levatich, despite years of poor performance.

The Board has still not shown that it is focused on positive change. To the contrary, one of the first decisions the incumbent directors made after firing Mr. Levatich was to reward their longstanding colleague, Jochen Zeitz, the new Acting President and CEO, with a pay package that could provide up to $8.5 million in salary, bonuses and restricted units for a short assignment. This is yet another instance of this Board being tone deaf to the plight of shareholders and further demonstrates the need for new perspectives on the Board.”

MARCH 1, 2020 — WARNING: TURBULENCE AHEAD. LONG-TERM PRESIDENT AND CEO LEAVES.

It is almost axiomatic when a new President and CEO is hired, their first act is to demonstrate to the Board that they can cut costs, implement a recovery or growth plan, and, of course, satisfy the demands of Wall Street.

The company has announced the departure of Matt Levatich, president and CEO of Harley Davidson after a 26-year career. He will be replaced by a board member who will function as the acting president.

The company is facing an aging consumer base, changing consumer tastes, more safety conscious consumers, and a national culture change.

This does not bode well for long-term employees.

SEPTEMBER 14, 2019 — ANOTHER 40 EMPLOYEES GONE FROM THE APPAREL DIVISION.

The company has announced the layoffs of another 40 employees in its apparel department. A company spokesperson noted, “Harley-Davidson announced that it will restructure its general merchandise organization to capitalize on growth opportunities. This supports the company's commitment to manage our business with focus and discipline as we invest in growing the next generation of Harley-Davidson riders globally."

With an aging customer base that appears to believe they are invincable and immune from danger, the company now needs to attract the “snowflake” generation which spends more time on video games than outdoor activities.

UPDATE: AUGUST 3, 2016 -- IT BEGINS IN KANSAS CITY

Two of three shifts at the plant are being eliminated at the present time, with the third shift shutdown in the near future.

A number employees are upset with the company for building a new plant in Thailand and not reinvesting in an American-made product. The company's response noted that the American market is aging while the Asian market is growing.

Original Post...

Once again, the iconic American company, motorcycle manufacturer Harley-Davidson has hit a slick spot in the road and is sliding sideways. Due to a prolonged financial downturn, an aging customer base, a decline in motorcycling with expensive “heavy hogs,” and increasing foreign competition involving currency issues, the company has announced the consolidation of its manufacturing activities to meet lower projected demands. This will result in the closure of the Kansas City plant and the layoff of approximately 800 workers, with the operations being transferred to facilities in York, Pennsylvania. The restructuring will add approximately 450 jobs in the York facility. Layoffs in Kansas City are expected to start around June 2018 with full closure estimated in the third quarter of 2019.

Harley-Davidson CEO and President Matt Levatich said, "The decision to consolidate our final assembly plants was made after very careful consideration of our manufacturing footprint and the appropriate capacity given the current business environment. We are constantly evaluating capacity, and our current U.S. capacity exceeds U.S. demand.”  

According to Edward Jones equities analyst Robin Diedrich, "As safety becomes a concern for aging baby boomers, domestic sales for the heavyweight motorcycle industry should slow. We expect certain international markets, particularly in Asia and South America, to have higher growth rates in heavyweight motorcycles than the U.S.," Diedrich said.

Harley-Davidson represents more than a brand, it represents a lifestyle and a dream of freedom of the road that is passionately embraced by a large contingent of Harley fanatics. Not all of whom are willing to spend tens of thousands of dollars on stock or customized motorcycles. There will always be a market for Harleys -- even if it isn't a mass market. 

Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life, or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?

NO LOVE AT KIMBERLY-CLARK (UPDATED)

UPDATE: OCTOBER 23, 2018 LAYOFF DANGER INCREASES WITH APPOINTMENT OF NEW CEO

In a move that may not bode well for employees, it appears that Kimberly Clark will be switching executives in the middle of its current restructuring program. Current President and Chief Operating Officer Michael Hsu is set to become the CEO which may mean that the Kimberly Clark’s Board was dissatisfied with the progress of the restructuring.

It is not unusual to find new CEOs doubling down on structural changes, especially headcounts, because they can blame the outgoing executive team. Time for employees to increase their vigilance.

UPDATE: OCTOBER 2, 2018 NOTHING HAPPENED — VOTE POSTPONED TO NOVEMBER 2018

The leadership of the Wisconsin State Legislature has postponed a vote on the proposed $100 million incentives package for Kimberly-Clark. The vote will occur in November after the mid-term election. Kimberly Clark agreed to extend the deadline, probably under the pressure of a potential public condemnation for their lack of effort to save jobs.

UPDATE: SEPTEMBER 26, 2018 WAITING ON THE STATE LEGISLATURE

The company announced “the closure of the Neenah Nonwovens Facility and its roughly 100 jobs — around mid-2019 if the company’s original global restructuring plan timeline holds true.” a second plant representing an additional 500 jobs will also be shuttered if the legislature does not meet the company’s self-imposed deadline of September 30, 2018 to pass legislation providing $100 million in tax incentives.

UPDATE: AUGUST 17, 2018 STATE OF WISCONSIN ATTEMPTING TO SAVE 600 JOBS

In February 2018, Kimberly Clark announced that it would be closing two Wisconsin plants and laying off approximately 600 workers. The union stepped-up to offer concessions in an attempt to keep the plants open. 

Now it appears that the state of Wisconsin, through its Wisconsin Economic Development Corporation, is attempting to save 600 Kimberly Clark jobs by offering the company an incentive package worth up to $100 million. It is unknown if the public will accept such a blatant attempt to politicize employment within a state with a healthy economic environment and which smacks of the type of "central planning" that allows politicians to choose winners and losers, sometimes disadvantaging the competition who lacks access to such generous state benefits. 

Many believe that it would be more advantageous to allow the plants to close and to use a fraction of the proffered funds to re-train workers for better jobs elsewhere in the economy. 

Original Post...

Kimberly-Clark, the Texas-based multinational personal care products behemoth and maker of such iconic brands as Kleenex, Kotex, Cottonelle, Scott, and Huggies, will be FORCEing out approximately 5,500 employees in a company-wide restructuring.

The restructuring plan is part of the FORCE (Focused On Reducing Costs Everywhere) which is targeted to reduce costs by $1.5 billion by 2021. In addition to eliminating approximately 13 percent of its workforce and 10 manufacturing facilities, look for the ripple effect to swamp various contractors and vendors that rely on Kimberly-Clark for a substantial portion of their revenue.

According to a press release aimed at Kimberly-Clark investors, Chairman and Chief Executive Officer Thomas J. Falk announced: 

"In 2017, we delivered bottom-line growth in a challenging environment. We also achieved all-time record FORCE cost savings of $450 million and reduced discretionary spending to help offset inflationary cost headwinds. In addition, we returned $2.3 billion to shareholders through dividends and share repurchases."

 "Although we expect market conditions will remain challenging in the near-term, we plan to deliver better results in 2018 while we begin to implement our new restructuring. We expect organic sales to return to growth while improving our margins and delivering double-digit growth in adjusted earnings per share. In addition, we will increase investments in our brands, our growth initiatives and the capabilities we need for long-term success. We will also continue to allocate capital in shareholder-friendly ways."

 "We believe that, over time, our 2018 Global Restructuring Program will accelerate our return to delivering on our long-term growth objectives. This is the biggest restructuring we have undertaken since the introduction of our Global Business Plan in 2003, and it will make our company leaner, stronger and faster. The changes we are making will improve our underlying profitability, provide more flexibility to invest in growth opportunities and help us compete even more effectively. At the same time, we are expecting our ongoing FORCE program to continue to deliver significant results and are making that clear by establishing a multi-year commitment to this program. Combined, our restructuring and FORCE programs will generate more than $2 billion of total cost savings over the next four years, giving us substantial funds to drive profitable growth. Today's announcement is the latest example of Kimberly-Clark's proactive and strategic approach to improving our business so we can win in the marketplace and create long-term shareholder value."

To be noted, more people are accepting of private-label branding (manufactured by name-brand companies) and purchasing large quantities of personal care products at big-box discount stores which reduces the number of purchases and increases the exposure to private-label equivalents.

Additional details of finances and the restructuring plan can be found on the Kimberly-Clark investor website.

Are you asking yourself, Am I Next?