Innovation, Tradition Fuse With Caterpillar Dealer Merger

Wed May 05, 2004 - Northeast Edition

What happens when one of North America’s most aggressive and innovative Caterpillar dealerships, one in the habit of servicing Caterpillar customers and handling business in its own certain way, acquires one of the oldest, more traditionally run operations in the country?

The answer began to reveal itself on Jan. 1. 2004, when Southworth-Milton, the Cat dealer servicing Massachusetts, New Hampshire, Vermont, Rhode Island, Maine, and parts of eastern New York, acquired Syracuse Supply, its neighbor of more than 60 years, with stores in Buffalo, Rochester, Syracuse and Binghamton, and the two cultures and businesses came together.

On Jan. 1, 2004, employees of both companies were notified of the acquisition in a formal letter by Chris Milton, president of Southworth-Milton, and promises of a bright future were made, including an expanded line of new and used inventory; strengthened support, resources and opportunities for employees; and the ability to improve services offered to customers.

Four months later, the people of Syracuse Supply, now Southworth-Milton, give an account of how their jobs and operation have changed, and how the transition is progressing.

Some said that “change is always a good thing,” but a corporate merger or acquisition often raises legitimate concerns among those involved. The fear the “acquired” employees tend to have is that a new management team will rob them of their influence, decision-making capabilities, regional expertise, and the benefit of their hard-won experience.

However, the feeling at the new Southworth-Milton New York operation seems to indicate that this acquisition does promise to be a good thing. Not only for the industry, for Cat customers in upstate and western New York, but just as importantly, for the employees.

Jill Parcells is one such employee. She is parts manager of the Syracuse location, and tells of the first time she noticed that immediate and positive change was under way.

“I think it was 10 days after the deal went through … out of nowhere, 12 new laser printers showed up at the office. No one here had asked for them, or knew they were coming. Yet the printers we were using were over 15 years old, and barely worked. Apparently, someone had noticed this, and taken care of the problem immediately. Days later, we marveled at how such a small thing as new printers made our jobs that much easier. It was a good sign.”

Parcells confessed that there were reservations at first. She remarked,“When I accepted the position with Southworth-Milton, I asked that they be open-minded about certain things that we do well, and they have fulfilled on that. I was concerned that many of the processes or practices we did, that were good for the customer, would be overlooked, or changed.

“But it turns out,” she continued, “that the acquisition has not just been about adapting to Southworth-Milton’s way of doing things. In fact, it was Mark Biron, vice president of Product Support, who said there were a lot of good things that we do — that they wanted to migrate back to Southworth-Milton — to make the whole company better.”

Parcells’ concerns have been eased. “I’ve found out — quickly — that if we do want to maintain a practice, we only need to explain why, and justify it.”

Since day one, many procedures and practices have been updated or improved. Pointing to his original promises, Milton commented, “Our vision is first and foremost to increase the responsiveness, inventory, and resources that these operations and their customers have available to them.”

Employees stress that there is a new focus on the specialization of job roles, processes, and services that Southworth-Milton has introduced.

Joe Diangelo, service manager of the Rochester operation said, “I used to do three jobs — service, parts and managing product service support representatives [PSSRs] for the Rochester location. Now I am only responsible for one — service. A parts manager is being hired, and the PSSRs are now being managed by someone else who only does that.

“With the new business that is coming,” said Diangelo, “we really need to be ready to deliver customer satisfaction. That means focus, getting better at our jobs, and not being spread too thin in too many directions. This is a change I’m excited about.”

John Davis, service manager of New York, agreed, “We no longer have to do things outside of expertise. Southworth-Milton has experts we can call on, who are eager to help us out.”

“More systems, software and company specialists are available to us. But as important as having the program and people in place, Southworth-Milton is eager to help in the transition and to get up to speed as soon as possible,” added Diangelo.

“When the merger happened, the Southworth-Milton employees were here the next week, and have either been here — or on the phone — each week since. The transition has gone really smoothly. And they’ve made us feel as comfortable as possible,” he said.

Gib Gagnon, formerly sales manager of Southworth-Milton’s Clifton Park store, and now general sales manager of the New York operation also is working to change the way they collaborate to find the best solution for all parties involved.

Davis explained what happened when an issue arose, recently.

“Right away, Gib called together three operations managers from Southworth-Milton to meet with their three counterparts from the former Syracuse Supply. In the past, such a conversation would never have happened. The effect is that we’re working to put an improved structure in place that seems to create real synergy between departments.”

Another benefit of the new way of doing business is outlined by Dan Voltura, sales manager of the Buffalo and Rochester locations, and a Syracuse Supply employee for more than 12 years.

He said, “ Everyone has more individual freedom to make decisions on our own. Our salespeople are more empowered now. This has had a very positive effect.”

Voltura continued, “Now they are encouraged to make financial decisions and deals on the spot, using their own judgment and expertise.

“In the past, there was no decision-making authority. They had to confer with a manager or managers for approval, and this cost us a lot of time and flexibility. This ’in the field’ decision-making had been greatly welcomed by our customers. People want the person in front of them to have the authority to make the deal happen,” said Voltura.

Another improvement in efficiencies is noted by Diangelo.

“In the past, a carriage refurbishment estimate required the salesperson to meet with the service department. The planning of this meeting would often take up to a week, and frustrate our busy customers. Now we place a phone call to a carriage refurbishment specialist in Milford — this is his only job and his expertise — give him all the relevant information, and we have a quote within 30 minutes, sometimes never leaving the customer’s side.”

Davis recounted another new way of doing business.

“Our service vehicles has seen better days. In the past, to upgrade them, I would have had to call in a third party, or third parties, broker the best deal I could get, go through all those logistics, and all this before I even got to think about the right replacement trucks. Now, I just picked up the phone, called Hank Spies, head of Used Equipment in Milford, and he took them off my hands — one phone call. I was like a really well-treated customer in this situation, and it felt great. I could get onto what I needed to do.”

Southworth-Milton promised an expanded inventory of new machines to offer customers and on the second day after the acquisition, the order for 70 Caterpillar machines Syracuse Supply had placed for the spring season was increased to 280 machines by Southworth-Milton.

“Southworth-Milton doesn’t defer a decision. If they think something is worthwhile, they invest right away. They have long-term objectives, but they also have short and mid-term ways to get there — and they won’t be swayed by the periodic pressures that come and go,” said Davis.

Scott Martell is a power generation systems expert that Southworth-Milton hired from Peoria, IL, to develop a state-of-the-art division for power generation systems.

“It’s very exciting. Right away, Southworth-Milton has given components and generators that just weren’t available to New York Caterpillar customers before,” said Martell.

“The effect,” Diangelo added, “is that there’s a new seriousness here. Yes, the expectations have been raised. The goals for everyone are lofty — this is Southworth-Milton — but there’s an excitement here now too. Our people realize this is the place to be.”

Gagnon concluded with a message for the loyal customers of the old Syracuse Supply, “Over the last 90 days we have been sending out the message as to how we do business — that if our customers succeed, and do well, and are happy, then we succeed. The market doesn’t have to believe us right now … all we ask is that they watch it happen.