Never Stand Still

All right everyone I'm back so tell your friends for all the latest and greatest in CF action (how can a company that's been out of business for over a decade still have any action?)

Anyhow were going to move into the late 1980s and even start flirting with the *gasp* early 1990s.

In 1988 Larry Scott was named CEO of CF and cheif of the company. At this time Scott was not really interested in expanding through acquisition any other trucking companies or carriers instead he kept trucking operations pretty much where they were. However he was still interested in Air Freight. For some reason CF just could not get off the air freight thing. It like completely consumed them for like the entire 1980s decade.

What Larry Scott wanted to do was make CF a global company and the best way to do that was by air freight.

Now in the Late 1980s Scott was concerned that CF would, be facing not only domestic competition, but international competition. He wanted to structure the company to better compete against these invaders from overseas.

Now at the time CF was still in good shape 280Million in company coffers still existed from the sale of Freightliner and Con-Way Companies were busy paying there own bills and paying for there own expansion.

However the air freight business CF was involved in was still kind of in the toilet and growing slow.

So CF did what any of us would do they decided to expand and started buying out shares of Emery Air Freight.


Founded in 1946 Emery was the largest heavy cargo air carrier in the USA. However by 1988 (The year I was born by the way, little fun fact there.)
Emery was kind of in the toilet financially and they were not real fourth coming with there finances, however CF decided to go through with the deal to buy Emery Air Freight, but the first attempt at buying the company was blocked.

While this happened Emery Air Freight fell further into the toilet. However even though Emery was a very troubled company it was mighty attractive a fatal attraction if you will just like Michael Douglas and Sharon Stone in Basic Instinct.

So like Michael Douglass just couldn't resist the murderous Sharon Stone Larry Scott just couldn't resist and CF plunged into the abyss and bought out Emery Air Freight.

Now Emery Air Freight did have a nice modern hub in Dayton, Ohio where CF had an old moldy outdated facility in Indianapolis however CF top executives just were so good at making money they figured they could make Emery Air Freight into a money maker no matter what the circumstances.

So with caution thrown to the wind and all the over confidence in the world and there pompous CF attitude CF paid $230 million dollars to buy a company with $258 million dollars in debt.

They said that CF's file on Emery Air Freight was so big you could "choke a horse with it." ha-ha!

Emery before CF was looking at them serriously had merged with a company called Purolator Air Freight and Purolator just was bleeding red and burnt Emery Air Freight red.

Purolator Air Freight was a small packages handler and around any how will continue this later.

 

I think I could have done a little bit better on that picture, as well, but as you all well know Sharon Stone was a big CF fan she often times liked to send shipments via Emery World Wide Air Freight and had lots of things shipped to her mansion in Hollywood by way of CF.

After all CF was also located in Menlo Park, CA around Hollywoodland.

 

I got a couple zingers in this thread here's another good one from page 3
Never Stand Still

 

Yeah Cannon Express if you looked at there truck fleet in the 1990s there entire fleet was the International Eagle with the pro sleeper Eagle Interior package. A whole yard full of those trucks.

 

I tell you what Sharon Stone was a real looker back in the day wasn't she?

 

Did you guys know that for 5 pages 5 pages of this thread we have been stuck in the 1980s talking mostly about CF Air Freight. What air freight was to CF is like what dating or trying to date is to me in real life. In the end neither of us were successful, but for some reason even though it wasn't going to work or stick we both kept on trying. Although in all fairness CF kept on trying a lot harder then I did and squandered amounts of money I'll never have.

Anyhow sorry for the intermission yesterday. My mom lost her cell phone and called me up and was pretty distraught my dad was working out on the east side and couldn't help her so I told her to come over here and we would go and retrace her steps and believe it or not we actually did end up finding her cellular telephone.

Anyhow back to it shall we.
In 1989 the deal for CF to buy Emery Air Freight was finally finalized. Purolator Air Freight a small package handler was bought buy Emery in 1987 and Purolator was a terrible investment for Emery Air Freight they couldn't compete with this two bit fly by night outfit that just came out known as Federal Express you may have heard of them:


Anyhow in 1988 the first nine months after Emery Air Freight bought Purolator Air Freight Emery lost $35.4 million dollars on 956 million dollars worth of revenue:
.

Standard and Poor's rated Emery Air Freight as a "junk bond".

The future of Emery was looking real bad and sure enough they started looking for a buyer. Well sure enough CF decided that they wanted to be that buyer.

Now the US governments Department of Justice was not real hot for letting CF buy out Emery they didn't like it. They thought it would cut down on "competition", where there were not many companies anyhow, but what could they do they decided that having CF buy out Emery Air Freight was better then Emery just going out of business which is exactly what was going to happen.

CF justified the Emery Air Freight buy out by saying well look they have "established operations" in 45 countries and 55 planes which is roughly probably 1.2 planes per terminal, this will save CF huge capital expenditures later on down the line.

Anyhow CF paid $230million for Emery Air Freight and let me put that into perspective in 1987 Emery Air Freight bought out Purolator Air Freight for $300million and here in 1989 CF was buying both Emery and the company they bought out of $230million.

Another reason Scott bought out Emery Air Freight was CF was in the process of being "greenmailed" which was something that happened to ABF in the late 1980s.

East coast investor Arthur Goldberg was buying out shares of CF left and right and had bought 4.5% of CF shares and basically they would buy a big chunk of shares and then start dictating things to the company and the company would have to pay a premium to get rid of these people.

Scott the CEO of CF had no intention of being beholden to Goldberg and having to pay a premium to get rid of him like ABF had to, Larry Scott the CEO of CF said no thanks and started setting up systems so big time investors couldn't buy stock away and then force there way on CF and have CF pay a premium to get rid of them.

Buying a big debt operation like Emery would also make CF look bad on the old balance sheet and that was also to deter "greenmailers" like Goldberg from buying CF stock.

On April 3 1989 CF's acquisition of Emery Air Freight was complete and CF now owned Emery Air Freight.

 

Next will talk about the Emery Air Freight take over. We've got 5 pages of this thread almost dedicated to CF's Air Freight struggles of the 1980s.
CF really didn't do much with there trucking operation in the 1980s they were just totally hung up and fixated on this whole air freight thing.

 

Waiting for my dad to come over should be over soon, but in the mean time will continue.
April 4 1987 teams of CF executives invaded Emery Air Freights headquarters in Wilton, Connecticut and rented hotel rooms at the Court Yard Marriott Hotel down the street. At 6:00am CF executives met in the board room at Emery and decided they would each meet with there counter part and draw a transition plan.

CF as you all know was a west coast company it was started in Oregon and it's headquartes later in years was moved to Menlo Park, California.

The reason CF choose a 6am start time was because at heart CF was a trucking company that owned some air planes and Emery Air Freight was an east coast air plane company that owned air planes and a couple straight trucks to make deliveries no big deal:



Anyhow CF wanted to show these east coasters that west coast truckers mean business and to show them how it was done! Unlike slow lazy commuter train riding east coast whiners. CF didn't have time for that crap.

So at 6:00am on April 4 CF started with Emery Air Freight and told Emery executives to be there at 6am.

At 9am all the Emery executives piled in to the board room to find out that CF executives had already put in a half a days work and were no longer interested in 9am east coast culture. This was CF the biggest and the baddest and starting work at 9am oh no that wasn't good enough you don't become #1 by starting work at 9am you start 4 hours earlier to become #1.

The transition and corporate culture was pretty traumatic for Emery Air Freight employees and there world changed.