One of the saddest posts I've read so far: how effective management's "divide & conquer" tactics have been at pitting the growers against each other 
Tom Gelsthorpe - 15 Dec - 08:43:01 AM

The post by "Anon" is one of the saddest I've read so far -- the epitome of how effective management's "divide & conquer" tactics have been at pitting the growers against each other, preventing the growers from communicating effectively and acting in their own best interests. The simple fact that even here on the password-protected website, the poster won't sign his name, shows how fearful growers are of speaking, even to one another. How easy it is, as Linda Rinta said, to order us off a cliff under such a policy.

Anon says "we" were all asked not to comment to media or to "non-cranberry people." We should suffer in silence, I suppose, shut up inside our self-constructed wall of solitary confinement. Does Anon really think "non-cranberry people" are going to remain unaware? What does Anon say when his friends ask him how business is going? Does he think the banks don't know? The equipment suppliers don't know? That anyone who does business with "cranberry people" doesn't know that incomes have vanished? How about all the foremen and subcontractors who have been laid off as the money's dried up? Does he think they don't know why? And that they, too, will remain sworn to silence? Most importantly, does he think that Campbell's Soup, Tropicana, Northland and Quaker Oats don't know there's something rotten in Cranberryland? Does he think we're the only ones who track Infoscan? The only company that inspects retail shelves? The only people who've noticed stores nearly giving the stuff away?

How does it help the growers to remain quiet, isolated, cut off from the commonsense debates that every other business engages in? Has Anon asked himself who is being protected by this wall of silence?

It is, of course, our putative leaders who have bungled things who are being protected by the silence. That's why they have ordered it. As long as they can convince growers that the surplus is an "act of God," that human error is not at fault, that our fearless leaders are doing the best they can, and that the most disloyal thing a grower can do is talk about it, the more time and license they have to make excuses for themselves, to postpone the moment of truth, to divide the growers further so growers can be destroyed one by one without holding anyone accountable.

In Massachusetts, "we" were NOT ordered never to speak to anyone. Here in the Cradle of Liberty such a policy would not go over too well. It's part of our tradition to speak up when we observe a grave injustice being perpetrated. One of our most cherished historical sites is a bridge in Concord, immortalized in a poem we learn as children: "Here once the embattled farmers stood, / And fired the shot heard round the world." In Massachusetts, there is a business school every few miles and information technology companies packed cheek-by-jowl along the major highways. The prinicipal industry here is education, with over 50 major institutions in the Boston area alone. Finance, health care and high-technology are next in importance. Even though most of us would rather stay on our farms and do the work we love best, it's hard not to absorb the ideas that knowledge is good, that money has to be accounted for, that sickness must be attended to and that communication can help.

I mention these Massachusetts particulars only to point out that each cranberry region has something distinctive to contribute to our industry, and that's why we should be communicating with each other. Here in Massachusetts, we admire the productivity of Wisconsin; many growers here have learned from it and adopted your techniques; we don't "fault" it. We are well-aware that we have been characterized as "malcontents" and "troublemakers" by some Wisconsin leaders. In particular, when Craige Scott was Chairman and I was president of the MA Advisory Committee, local growers could see that the profit trend for growers was heading downward, that management was neglecting its primary duties to shareholders, that marketing had gone astray, that we had no strategy for dealing with increasing competition or the increasing capital requirements of the global economy; and that if we didn't restructure, the industry was headed off a cliff. When growers with marketing experience came to me and asked me to do something about it, I founded a subcommittee which we called "Strategy Review" and recruited several growers with outside business knowledge to serve on it and lend it the perspective that our Board lacks. MA Vice Chairman Clark Griffith (who had threatened the year before to abolish the Advisory Committee for complaining about profit margins) and Chairman Craige Scott went ballistic and tried to abolish Strategy Review. Nevertheless, we continued to meet for a year and a half. We correctly anticipated and alerted MA growers to the catastrophe that has transpired since then. Because the Board as a whole ignored our reports and prevented them from being disseminated nationwide, many growers in other areas didn't know there was anything wrong with Ocean Spray until after the 1999 annual meeting. After relentless pressure from concerned MA growers, this summer the Board finally hired Bain & Merrill Lynch to look into the situation and -- lo, and behold! -- for a hefty price, they have told the Board what Strategy Review told them two and half years ago for free; and what A.D. Makepeace told them five years ago at their own expense. After vilifying MA growers for years for criticizing the Board or even letting the word "strategy" pass our lips -- lo & behold! -- the Board is proposing to include "outside" members and a "Strategy Committee" to review management's assignment.

Last week Bain told about 100 MA growers how royally screwed up Ocean Spray is -- "a first class mess" is how David Harding worded it -- about the worst mess he has ever seen in over 15 years of consulting. After disclaiming the duty to discuss the evaluation Merrill Lynch prepared, we spent over half an hour discussing it -- and picked apart the widely repeated assertion that "one third of the growers would receive less than $40,000 from a merger payout." I will get into that (nothing "proprietary," I assure you) in a later message, because this one's getting too long.

If it weren't for the memo appearing on this site, we would have had much greater difficulty preparing pertinent questions for Bain. What we did learn is that Bain's definition of "turnaround" means: boosting berry returns to the inflation-adjusted level of twenty years ago -- maybe -- after two more years of massive losses at the grower level. We also learned that operating costs within Ocean Spray are tens of millions of dollars higher than they need to be, that we're so inefficient at manufacturing that we should sell or lease the plants, and that we're so ineffective at marketing, dealing with the grocery trade and communicating with grower/shareholders that we must "transform" the company culture. We also learned that the case for merger is "compelling" based on financial grounds, but that the Board made the decision based on non-financial considerations. We also learned from Bain and from numerous Board members who were present that Merrill Lynch "unequivocally" recommended a sale or merger of the branded business. And we were told that "about one third" of growers are expected to "go out of business" whether we sell or not, but that if we don't sell, many will have their net worth wiped out and go bankrupt; if we do sell at least we'll have the stock proceeds to fall back on.

It is obvious to me that some Board members do not want Merrill Lynch's recommendations communicated to growers, even though Brian Callaci told us in area meetings that "Merrill Lynch is working for the Ocean Spray stockholders." I called Don Hatton two weeks ago, as soon as our area Bain meeting was announced, and before the Bain memo became available, if Merrill Lynch could be present at the meeting and he said, "No." I asked him if Merrill Lynch had issued a recommendation one way or the other, favoring a merger or going it alone, and he said, "No" to that also. The Chairman told me that Merrill Lynch had only laid out the "pros and cons" without expressing a preference. WHAT DON HATTON TOLD ME FLATLY CONTRADICTS WHAT BAIN AND SEVERAL DIRECTORS PRESENT SAID AT THE DECEMBER 8th MEETING.

Apparently, the current preoccupation of the Chairman is not to save the growers from ruin but to track the source of the Bain leak and punish the party or parties who released information vital to stockholders. Does he interpret the Chairman's job as a responsibility to keep growers in the dark? In our topsy-turvy cooperative, it has been customary for "growers to be the last to know" all sorts of important stuff. This pattern of concealing the Bain and Merrill Lynch findings -- findings that growers could act upon intelligently if they knew -- is, in my view, not a legitimate policy, nor merely a "glitch" or "mistake" but A SCANDAL! Although Massachusetts Board members have awakened to the danger, certain Board members have grossly violated their fiduciary responsibilities to shareholders and continue to do so at this time. In short, a sale/merger of Ocean Spray's branded business could make many full-time growers into millionaires and continued drift will leave many penniless -- BUT YOUR CHAIRMAN AND FORMER CHAIRMAN DON'T WANT YOU TO KNOW THAT! As near as I can make out, the "non-financial considerations" blocking a merger, are the desires of a relative handful of Board members to continue to be big frogs in a little pond. The most painful irony of the whole thing is that those with the most to gain from a merger seem to be the most determined to torpedo the deal for everybody else. Significant wealth for the biggest growers, reasonable security for the average grower and a "graceful exit" (Bain's phrase) for growers of any size who choose not to hang in there, are available if we act rationally. Why do we choose to act irrationally? As many of us have asked many times -- what are we waiting for?

The sickest things about the "company culture" -- in my view -- are the fatalism of many growers and the willingness of our Board to let their employees call the shots. This whole disaster has developed because the power structure of Ocean Spray has been upside down for years. In a capitalist economy such as ours, we have laws and customs defining the disposition of property and the conduct of business, based on the primacy of ownership. At Ocean Spray, we have the owners (growers) strangely passive and the employees (management) telling us to refrain from expecting profits, to ignore our net worth, telling us who to talk to or not talk to, and we have the owners'(growers) representatives, the Board, acting as management's hatchetmen, threatening, chastising and bankrupting other owners in order to cover up the employees' mistakes. Would any of you run your farm that way? Would you let one of your foremen deceive your spouse or business partner about the size or value of the crop? Would you let your corral full of fruit float down the river when simply putting a flume board back in would save it? Would you have to hire a new foreman to "discuss" a "strategy" to prevent flume boards from becoming dislodged? Or could you figure that out yourself? Please, fellow growers, don't allow yourselves to be so easily intimidated. I've been working very hard to restore the primacy of ownership at Ocean Spray. The reason I have favored a merger is that I believe growers will be better off owning a large block of corporate stock that can grow, rather than owning a small block of coop stock that can't, and that berry prices will be about the same either way. The A.D. Makepeace Co., by their own independently funded study, discovered that likelihood five years ago, the advantage has become more obvious since then and our consultants have largely confirmed it. Please growers, find the courage to support Board members who will be your champions, not your executioners. And if you believe this post is worth saving, print it out before some pathetic, little martinet orders it deleted.