Because our industry is relationship driven, like family—news travels quickly. Any change in the infrastructure of key players in the perfusion business has implications to all. As Trident’s leader of a fine team comprised of many good people, it’s important to me to convey accurately and swiftly any concerning reports of unusual activity. As such, today, I sent a memo to our employees, copied herein, in response to the company formerly known as Fresenius and their plans to freeze a week of their employees’ salary. What does it all mean?
9-10-2007
A surprise is forthcoming to our dear friends employed by the old Fresenius Perfusion Unit that was most recently sold to a venture capital group out of Nashville (mentioned in an earlier blog post) It seems the transition from old Fresenius to the new organization has run into a few roadblocks...but this snag is a doozie and one that reeks of a possible severe cash crunch.
The first week of October completes the formal transition to the new venture capital group. I’ve confirmed that the new owners of the beleaguered perfusion service company are greeting their new employees with a dose of reality, believed to be symptomatic of a cash flow problem, but hopefully, not a sign of things to come. Every employee in the new corporation will have one full week of pay held...the 1st week of October, paid back upon separation from the company. It is understood that the terms of this unprecedented salary take-back includes a clause that reads if there is a hardship to the employee, the company will loan the week’s pay to be paid back in November. I question how loaning someone their own well deserved pay is a sincere attempt to assuage a hardship.
Further, if there is a true cash shortage in any company for whatever reason, such information should be honestly and forthrightly told to the deserving loyal employees. Not giving a reason, as I understand was the case, is a pretty bold and arrogant statement about the ethical platform on which a company stands.
I certainly share the feelings of loss for our friends from the old Fresenius still employed under the new venture capital group. They will be rightly and deservedly upset, if not down-right angry, when they hear about this latest shortfall, which affects their pocketbook. This decision is an insult to their stellar professional careers.
As a Trident employee, step up and let your friends know that they have a friend in Trident. We'd be glad to listen to anyone who would like to get in touch with us, realizing that offering condolences at this time won’t exactly change things. However, perhaps there are other alternatives to alleviate their collective dilemma. Please reach out. Listen. There will be much anger because of this situation. I believe the PerfList message board will be blazing with comments of disgust and despair. Trident will listen and try to offer solutions to those groups of clinicians feeling the brunt of this unfortunate managerial decision.
Like many of their ilk, these venture capital types are interested in one thing—a return on their investment. Historically, venture capital managers have sought the usual 40% return. Such a return won't be achieved in this business by these folks given the latest management decision to sequester funds. The most important stakeholders in any business, but especially ours, are the staff.
Despite the dire circumstances described above, Trident employees should know: this is an excellent business to be in...we have celebrated 19 straight yrs of successful, profitable business with happy and productive perfusionists who are our most important asset. We don't skimp on salaries or benefits, staffing needs, vacation relief and annual meetings (which are a requirement for all of our folks). I can affirm with confidence, as well, that there are quite a few other contract companies out there which do a good job and protect and value their people, just as Trident does.
Thank you for your constancy and great work efforts. We are proud of our association with you. Let us know how we can help you all.
Best Regards,
Ralph E. Jordan
President and CEO
Trident Health Resources, Inc.
Trident Health Resources, Inc.
2 comments:
I think that making unsubstantiated claims about other companys is in bad taste and exhibits poor business practices. You should have the facts before making inaccurate statements.
Better to keep your mouth closed and be thought a fool than to open it and remove all doubt.
In response to the post above and as a message to readers, all comments are welcome at the Trident Health Resources Blog, including those from anonymous identities. However, with regards to Mr. Gardner's statements, I am concerned about the authenticity of his identity as a CFO of any of the past merged companies mentioned in this "comment". It is my recollection that other individuals served during the FMCEA years < Eric Maske > and Baxter/Edwards Life Sciences < Lynne Reily > years... I invite "anonymous " to contact me directly to verify identity and I welcome a public discussion with him as well. I must admit that I find it a bit of a stretch to hail his many friends in the Perfusion Community...there isn't a CFO associated with any of the past three owners who could count 10 perfusionists as friends. < just being cynical , relax >
Meanwhile, I'd like to respond to "his comments". It seems there is a presumption that a perfusion company could be profitable from the service side, which is, in fact, true... but which has never been the case in the history of these past mergers. The only significant profit generated over the last three mergers was in the lease and rental of capital equipment and in the monitoring of IABP's and some lab fees.. This is because services carried the brunt of the enormous overhead of the general and administrative costs and the several layers of field and sale management. Further, in the case of the company formerly known as Fresenius and before them, many of the clinicians who were appointed middle managers didn't have a clue as to what managers do...they were inadequately trained for their positions (if they were trained at all), and the costs associated with another layer of management...the employment of field sales managers from outside the industry... choked hope of any reasonable profit stream. This has been the consensus of the many who have shared their stories with us.
It is a fallacy and delusional that because a company is perfusion-owned that it would automatically be profitable. This comment in the response to the blog by "anonymous" is strange at best... no experienced CFO would ever make a claim to that effect... this statement seems to be more of a case of wishful thinking by a disheartened perfusionist than of pragmatic business acumen of a seasoned CFO from a multi national corporation. Hard business decisions always need to be made for sound fiscal management. Although some perfusion-owned companies are very successful , it is this observer's opinion that there are very few with the expertise, knowledge and experience to stop the bleeding adequately of this new entity in order for it to survive without a lot of blood letting . I hope I am wrong but to think otherwise, is to have a Pollyanna viewpoint.
Thanks "anonymous" for sharing your wistful dream...
Ralph E. Jordan
President & CEO
Trident Health Resources, Inc.
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