As an automotive industry participant, and person very close to the company, Tenneco investors should be aware of the following:
1. The recent combination of the Walker, and Monroe field sales forces has destroyed the recognized strongest field sales force in the industry, with many many key players being forced out, or choosing to leave in the process. 2. The demographics of the replacement market are horrible, people are not repairing cars (when is the last time you bought a pair of shock absorbers). Sure, they have great market share, but of a declining market. Replacement rate has gone down EVERY year for some time now. This is not a growth segment of the market. 3. The comments of Cramer (thestreet.com)notwithstanding about Dana Mead,the management team he put together is rife with cronyism, and poor 1960 style managers who manage through intimidation. This is particularly evident in certain groups such as automotive (can't comment on packaging, but note other comments on the board). There have been many internal comments about spinning off automotive, if an appropriate aquisition can't be found. They are know to be looking for a brake company after failing in the brake market with their own startup (Brakepro). 4. The automotive group, to meet their Q4 sales projections had to pull forward 1988 volume with heavy dating on sales. The industry just can't believe what they have done.
I sold my position some time ago, and do not wish to trade this stock so I am clean on "doing this for my own ends", but hopefully those of you who do, can find some value in these comments. Sorry about the length.
You're right on madm002! But there's more. The excess costs were not in the sales & marketing depts. They're in places such as Greenwich, Connecticut and The Woodlands, TX. A real clue as to what Dana Mead thought about the company and its shareholders came when he spent $45 million on that move to Greenwich. And then he dismembers the lifeblood while bloating his own beauracracy. There is only one thing in Mead's life and that's Mead. To hell with the company as long as he gets his.
Whatluck, you reminded me of some other egregious things done by the "Dana Mead" regime:
1. All officers received golden parachutes with immediate heavy benefit vesting last year to protect them after the gas pipeline unit, and shipyard were spun off. 2. As you correctly indicate, the move to Connecticut was just to make Mead's life easier, at significant cost to shareholders. 3. As the rest of the free world moves to empowerment of individual business units, Tenneco marches to consolidation, and micromanagement, as indicated in the automotive restructure. This will lead to spin-off of the unit, without doubt. The general manager of the unit fancies himself a real "tough guy", has no people skills, and has lost all good people, including the very highly regarded Vice President of Sales, and Marketing who went to Ford aftermarket.