Magazine article Security Management

Duracell's First Aid for Downsizing Survivors

Magazine article Security Management

Duracell's First Aid for Downsizing Survivors

Article excerpt

Duracell's First Aid for Downsizing Survivors

After six difficult months the task of division downsizing is complete. Management has established voluntary separation incentives, negotiated packages for those leaving the company, and even structured outplacement assistance programs for employes whose jobs have been eliminated. The organization now is lean and mean, and the results should start to appear soon in the financial reports.

The results appear, but they are not what was expected. Productivity and morale remain low. Employees' emotional problems have increased, and the employee assistance program (EAP) suddenly seems overburdened. Key managers who survived the cuts are leaving for jobs with competitors. Absenteeism, never before a problem, begins to escalate.

If you think this situation is unlikely to occur at your company, think again. The whirlwind of corporate acquisition activity and competitive pressure that has led to many downsizing programs (and the difficult transitions that follow) shows no sign of abating. A survey of outplaced executives by the consulting firm of Drake Beam Morin Inc. suggests that mergers, acquisitions, and corporate cutbacks may be responsible for more than 60 percent of all job losses among their clients.

Traditionally, personnel executives planning cutbacks have focused their attention on issues relating to employees leaving the company. Now, however, survivor programs have become equally important to managers responsible for seeing their organizations through these periods of change.

The reason is simple: The future productivity and success of the organization ultimately depend on those who stay. Downsizing can have a powerful effect on workers, and this effect actually may undermine the objectives the reorganization was designed to achieve.

Remaining Employees Need Attention

When the US engineering unit of Duracell Inc. underwent its second reorganization in three years, management decided that remaining employees required as much attention as those who would be leaving the company.

A few years ago, Duracell's Waterbury, CT, operation was a manufacturing and engineering facility. In late 1986, management decided to vertically integrate the company's manufacturing operations within its Southeastern plants. As a result, Waterbury was reorganized and its manufacturing operations relocated to other areas.

Walt Christensen, the plant's personnel manager, and his associate, Marcia Bissell, worked with Drake Beam Morin to manage the shutdown and develop outplacement programs for the 250 hourly workers who were laid off. Waterbury became a technical center exclusively, housing the engineering staff that serviced all of Duracell's US operations.

The center's management team, led by Robert Correll, director of engineering and head of the facility, focused its efforts on assembling the necessary staff to meet this new mandate. The unit grew to 95 employees, including engineers and quality control specialists who were recruited from out of state and relocated to Waterbury.

Then in June 1988, Duracell was purchased in a leveraged buyout by a group of investors, including some of the company's senior managers. Among their first objectives was to streamline operations and consolidate the company's engineering staff.

The Waterbury group would be reduced by more than 50 percent, and various staff and administrative functions would be eliminated. The remaining personnel would merge into the corporate technical group and relocate to the company's headquarters in Bethel, CT, 30 miles away.

Faced with his second major upheaval in three years, Correll and his managers had two major concerns. The first -- providing assistance to dismissed employees -- was fairly straightforward to them.

A significant portion of their planning and thinking, however, was directed toward the future of the engineering group. …

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