From 9/20/05 edition of the Knoxville News Sentinel
Metron's closure called preventable
Consulting firm official says turnaround plan was ready but rejected
By LARISA BRASS AND REBECCA FERRAR,
brass@knews.com;
ferrarr@knews.com
September 20, 2005
Metron North America's abrupt closure last week could have been prevented, according to a management-consulting firm hired by Metron's bank to analyze the troubled company's operations.
Metron, an electronics distributor with headquarters in Knoxville, rejected a turnaround plan proposed by Nashville-based Delta Partners this summer, Michael Garrison, Delta Partners' president and CEO, said Monday.
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Metron closed its doors Friday, leaving about 200 workers stunned and jobless.
The company provided distribution services, information technology, sales and other support functions to companies primarily in the electronics business. The company lost its biggest customer, DirecTV, last winter.
Garrison said Delta Partners was brought in by Metron North America's bank, SunTrust, in July to assess the company and craft a recovery plan.
"The typical process is that once an assessment is completed and we move into the turnaround phase, then we move into (implementing) the turnaround plan," he said. "We were there for the better part of the month of July. We were informed fully on August 3 that we would not be engaged by the company to implement the turnaround plan."
Garrison said because of confidentiality agreements he could not disclose what Delta Partners discovered in the assessment or the reasons Metron chose not to go forward with the plan.
But he called the company's move "highly unusual" and said Metron is the first Delta Partners client to reject a turnaround proposal.
When asked if he believed the company could have been spared closure had the plan been accepted, Garrison said, "Yes I do. It was a viable and achievable turnaround plan."
Metron CEO Bob Crabtree declined to comment Monday.
Additional questions arose Monday regarding Metron management's assertion that executives learned the company would close just hours before they told workers Friday.
Final paychecks distributed Friday to employees were dated Thursday, Sept. 15. They were for the pay period ended Saturday, Sept. 17, and weren't expected until Sept. 22, workers said, since they're paid every two weeks and had their last payday Sept. 8.
The company that handled Metron's checks e-mailed a direct-deposit notification to workers Thursday, which Metron said was sent in error.
Dark Monday
Employees who weren't at work Friday arrived Monday to pick up their final paychecks, expressing displeasure that they had to learn about the closure from co-workers.
"(Company officials) did not call us or nothing," said Robin Marrow, 41, a recruiter for subcontractors. She learned she was out of work when a co-worker called about 7 p.m. Friday.
"That's what made me mad about the whole deal. There was no notice. They knew this was happening."
Workers said they've heard rumors for some time that the company was in trouble.
"We saw it coming," said Leann Lunsford, 24, a quality process analyst. "It's been like this over a year. They had layoffs in December and were cutting back in the company. It is hard to take. We have really good friends here."
Salesman Mark Larue, 40, said he already had been laid off effective Sept. 30 and was not surprised by the closure.
"I pretty well knew it was a good possibility," he said. "When we lost the DirecTV contract, there wasn't a lot to do after that. I don't think they had any choice. I don't have any grudge against the owners. I earned a good living."
Larue said he has another sales job lined up.
Others aren't so fortunate.
Jan Moulden, 29, is a single mother who worked part time at Metron and attended South College full-time. She said she wasn't sure where she could find another job with flexible hours to allow her to go to school.
"I'm here to get my last paycheck and my belongings," Moulden said Monday. "I think they held back information. It's been awhile that rumors have been going around about closing. But they kept reassuring us we would have our jobs. Then, 'boom,' I got a call from a co-worker saying we don't have a job anymore."
Workers received no severance pay.
"I'm the breadwinner in my family," said Tom Skibinski, 28, who worked in the call center and was "a little bit shocked" at the abrupt closure. He is married with two children.
"I'll have to go out and get another job. It's not easy, but you have to keep on going."
Erika Andra, a communications editor, has put resumes out and has a side business preparing resumes. She brought information to Metron's headquarters Monday for interested workers.
"I'm offering half-off for anyone displaced," she said.
Taken by surprise
Local officials expressed surprise at Metron's shutdown but said the region was ready to absorb the job loss and fill the building space it's vacating.
Large companies are required to provide a 60-day layoff notice to the state prior to a layoff. Metron did not notify the state, although the law provides exceptions for certain reasons - for instance, if layoffs are not "reasonably foreseen."
Metron was headquartered in the former Albers Drug building on Kingston Pike near Tyson Park. The company also operated a local distribution center in Clinton that, at last report, employed about 60 people.
"We were as surprised as anybody else," said Rhonda Rice, executive vice president at the Knoxville Area Chamber Partnership. Although she took note when the company lost its DirecTV contract and laid off about 40 people, "based on what they told us at that time was that they had other contracts and other forms of business that they were working on," Rice said.
Mike Edwards, president and CEO of the chamber partnership, said as of Monday afternoon two companies interested in Metron's Knoxville building and displaced work force had contacted the partnership.
"We're going to absorb the space. We're going to absorb the jobs," he said.
Edwards said the company never qualified for a Knox County tax incentive program connected to a $12 million expansion of its call center last year because it did not deliver on promised new jobs.
Tim Thompson, president of the Melton Hill Regional Industrial Association, said he got no word the company was going out of business and did not know what would become of the building it occupied near Norris. He said Metron was leasing the space from local developer Joe Hollingsworth.
In February the industrial development board approved a seven-year, 50-percent tax abatement connected to Metron's plans to add employees at its new Anderson County facility, a 124,500-square-foot building that opened in 2004. The IDB held title to Metron's equipment in exchange for in-lieu-of-tax payments, but IDB lawyer Phil Crye said he believed a lien was in place on the equipment, which would likely be enforced now that the company is gone.
"We're ready to market (the building) when they're ready," Thompson said, adding that a "big demand" exists for leased space in the county.
"It's not like we've got 20 empty buildings and here's another one right now," said Anderson County Mayor Rex Lynch. "I'm very confident we'll be able to get someone else."
Metron continues to share warehouse space with local charity Mission of Hope, which is using the company's warehouse to store donated goods for children.
"The Metron owners and employees have been longtime supporters of Hope," said Emmette Thompson, Mission of Hope executive director. "I don't know right now what the exact status is going to be with us there."
Business writer Larisa Brass may be reached at 865-342-6318 and business writer Rebecca Ferrar may be reached at 865-342-6357.
