MOCHASA’S MANAGEMENT FALLS IN MY LAP

Remarkably as well as unexpectedly, in a display of good will and good spirits which were not necessarily his most remarkable characteristics, soon thereafter, Stuart did, indeed, took his “valuable” time to make a “two hour visit” to Mochasa, on the site, and took a “tour of the plant” to “have a chance to meet all the staff” and to “closely see the company’s operations”. That was one of the three visits he made to this plant in the remaining 13 years of his reign. The other two didn’t last more that 45 minutes each and occurred while the big bosses of KC and NYC, were visiting our operations. The guy was so lazy that did not bother to visit the Mochasa plant even on two occasions when it got so badly flooded during two monsoon type rainy seasons, that the industrial plant was so badly damaged that operations had to be shut down for cleaning and repairing for almost a full week each time.

I can’t recall one single important management decision coming from his office that would make any significant impact on the operations of Mochasa and its subsidiaries. I don’t know if the “generous” KC management ever made an upward adjustment to Stuart’s annual salary as a recognition “for his new and higher management responsibilities” and for his courageous decision and great spirit of cooperation, if so, he never said it to me, but they certainly never gave me one salary raise specifically associated to my new responsibilities, which indeed were many, and certainly included all those which should have been his. Stuart did not ever change his “style of management” and continued reading newspapers all morning long, he continued watching TV and, of course, he continued busily managing his investment portfolio on a daily basis from his computer terminal. Needless to say, he continued taking his daily nap after lunch, and locking his office door while he was doing so. As I had expected, all the managing of these companies fell in my lap and Stuart continued his unending highly paid vacations.

As reported to me by two of the most important men in the Mochasa middle management, when in mid 1996 I was sent on a special mission to Argentina for almost nine months, many important and urgent decisions that were needed in Mochasa were postponed by Stuart “until Rafi (that was the way Stuart used to call me) is back. The guy was absolutely incapable of making a decision because he was afraid of making the wrong one. At least, that showed a certain (very limited, though) amount of honesty, which he is probably very proud of.

The fact of the matter is that, with the changes that were introduced to Mochasa and its subs, this company began to make (instead of losing) money almost immediately thereafter. Not one single addition was made to the company’s staff, but the existing mid level management responded extremely well to the new ideas and controls introduced. Jorge Lazo, that extremely honest and hard working old timer who was the accountant of Molidor back in 1984 when I came in from the States and whom I promoted to the position of “head of Financial Reporting”, was again promoted to the position of HHRR manager, and was put in charge of implementing the same policies and procedures we had been applying in Molidor, to Mochasa and its subs. It didn’t take too long for me to have everything under control. With the exception of DIBSA, the shrimp producing subsidiary whose operations remained under CONTI’s control, all the other companies in the group became very profitable. DIBSA had been facing very serious operational problems due to the so called “Taura Syndrome”, a serious disease which decimated the shrimp in the ponds and was attributed to the fertilizers utilized in the nearby banana plantations. Their lack of profitability can be attributed to a great extent to “mother nature’s behaviour” but it was also the result of a lack of firm and expedient action from KC’s SEABOARD and NYC’s CONTI to reduce excessive management’s costs and excessive staffing, which were corrected, unbelievably, only fourteen years later and after many repeated calls on my part to do so.

During all these years I was annually evaluated by the KC management and I was invariably told, in writing, that I was the BEST FINANCIAL DIRECTOR of their operations overseas; in addition, I was always rewarded with good “performance bonuses” which ranged from 30 to 50 K. I can’t complain about my compensation, however, for a guy who was so highly regarded and rewarded, one would have thought “this guy needs and deserves a promotion”, and indeed the idea had been discussed and played with several times in KC, however, my “loyal” boss Mr. Stuart manipulated so that idea could be kept in the freezer, supposedly “because I was so much fit and indispensable to the Ecuadorian operations, due to my nationality, that giving me a good salary and good bonuses will keep me happy were I was”. Obviously, he had a personal interest in keeping me in Ecuador because he knew damn well that nobody else in the whole wide world would fit his personal interest and compensate for his unbelievably laziness better than me.

In May 1996, Seaboard decided to buy a Sugar mill operation in Northern Argentina. This operation had been owned by a well known “traditional family” in the Province of Salta, close to the Bolivian border. This purchase was the result of a “bid” open by the Argentine government headed by President Menem, who had started an aggressive program of “privatizations” which was an essential part of his wider "modernization" plan for the Argentine Economy which collapsed a few years later.

In Early May 2, 1996, the Seaboard’s CEO Mr. Harry Bresky personally called me to the hotel in Salt Lake City where I was taking my annual skiing vacations. It was about 11 PM and I was already sleeping. “Hey Rafael”, he said on the phone and I immediately recognized his voice in spite of the fact that it had been almost a year since I had spoken to him the last time. “Hi Harry”, I said, “how are you? and what makes you call me at this time of night”, “Rafael”, he said, “what time is it where you are?”, “its past eleven O’clock”, I said. “Oh, I’m very sorry, you were probably sleeping already and I shouldn’t have left this call for tomorrow” he added. “No problem Harry” I said, “What can I do for you?. and he started to tell me about his project in Argentina and the need he had to have a man in his organization to handle the transition from the hybrid ownership of the Ingenio San Martin del Tabacal” by the Patron Costa family and the Argentine Government to the private ownership by Seaboard Corporation of Shawnee Mission, Kansas, USA. Harry told me he had bough the full ownership of this very large sugar mill for ten million dollars and he needed one of his experienced officers to take charge of the transition. He said he had originally though that Joel Stuart would be the man and had spoken to him to do the job, but after many arguments about how important his presence in Ecuador was, he had suggested that I should be the man for the job, “but only for a short period of time, because I was extremely important, for the Ecuadorian Operations too”. “Rafael”, Harry said, “I have to take Joel's’' word and that is why I’m calling you tonight. “I need you in Argentina by not later that next Monday”. I said “Harry, I’m a good soldier, and you are the commander of this ship”, I’ll do as you have requested. I’ll be in Buenos Aires by next Monday. Harry did not hang up until after he said to me; “Rafael, I know I’m cutting your vacations short”, but, don’t you worry, I fully appreciate your sense of cooperation and I’ll make sure you take two days off for each one you are cutting short!. The next day my wife and I were flying back to Ecuador, and in two more days I was flying to Buenos Aires.

I’ll tell you about my experience in Argentina in my next posting.

In my next posting, THE ARGENTINA MISSION

MORE RESPONSIBILITIES AND CHALLENGES

In early 1987, I took golf as a very important part of my life. I had been a tennis player since the age of 27, and I used to consider tennis as an inseparable part of my life, I used to wake up at five in the morning and be ready to play by six, at the time when one could barely see the ball fly, however, that was the time that allowed me to play two sets and still be at work at eight o’clock. However, my spine played a trick on me and started to hurt badly. On one occasion, the pain in my back was so bad that I had to remain flat on the floor for several days, unable to move. My doctor came home and gave me a series of shots that calmed my pain enough to be able to get back on my feet.He also prescribed a series of exercises to strengthen my back. Afterwards, I was given a clear and definite warning “you either change sports or change your doctor”, he told me. It felt as if the sky was falling on me, it was like asking me to leave my family, I felt miserable.I could just not conceive my life without playing tennis.

I had to take my doctor's advice seriously though, and I hadn’t been doing any sport for awhile and remained in house like a lion in its cage during the weekends until a good friend of mine came to my rescue. It was Paco Picon, a Puerto Rican young man working for the local affiliate of Owen Illinois to whom I had taught playing tennis. He was a good golfer, he came one Sunday morning to my place to visit and asked me to come with him to the Country Club and try golf. I declined his invitation at the beginning, as I told him “because I think golf is only for old people”. Nevertheless, Paco was persuasive enough and took me to the Country club and patiently gave me my first lessons in what had since become not only my favourite sport, but my passion. I will tell you more about golf in the coming chapters.

The years went by at an unbelievable speed. My kids were growing right in front of my eyes, by now Mariuxi was 14, Rafael Jr. Was 12 and Angie was 8, they were all very good students and had become a part of the international community whose children attended the Inter American Academy (“IAA”) of which I was the treasurer and a key member of its Board of Directors. A new and beautiful campus was acquired for the school and the school moved to Puerto Azul, just a couple of blocks from where we lived. This was a great thing for our family because we didn’t have to drive to the city to take our children to school, instead, the school had come to our neighbourhood. Fanny had taken a job as a teacher of Spanish as a second Language at IAA, a job she loved, she was excellent at, and fit perfectly in her curriculum as a school teacher. This not only kept her busy but helped her to be near our children all the time. It was an ideal situation for our family.

Molidor continued to perform as one of the best overseas operations of SEABOARD, whereas, the sister company, MOCHASA (also 50-50 owned by SEABOARD AND CONTI), the local feed, shrimp and swine operations, under CONTI management was poorly performing and continuously requesting (and obtaining) financing from Molidor. Regardless of the various changes of their highly paid General Managers, these companies continued to far under perform Molidor. Over the years, however, it became evident to the parent companies that the duplication of managements in the Ecuadorian operations was not necessary, and decided to consult the Molidor management if we could take over the management of the other segments of their businesses in Ecuador.

Stuart called me to his office that Monday morning of 1992, with his face all pale, increasingly turning to yellow and then to green, and told me in a very concerned tone; ”Rafael, I’m worried, no, I’m scared, listen to what the people in Kansas want us to do”. What is it, I asked him as I also began to feel a bit nervous, he paused for about two minutes to reread the letter he had just received from KC and he continued; “these people must be crazy, they want us to take over the management of their other local operations!, can you believe that?, that is absurd!, who do they think we are, supermen or something?”, I don’t think WE could do that, not in a million years!”, and then he added, I’m going to tell them that their proposition is absurd, that WE have our hands full with Molidor and that it is absurd to even think of adding more work to the load WE already have” I listened to him with amazement and must have smiled sarcastically when I said, in a very calmed voice “Joel, I believe they are absolutely right when they want to consolidate managements, I have always thought they are duplicating management costs without a real need to”.

The fact of the matter is that by then, almost eight years after I took over the Molidor management, in spite of being well paid, I was beginning to feel a bit bored by not having any more challenges in the day to day business, so much so that I had thought of calling my friend Bill Messett, the headhunter, to ask him to find a new job for me, a job that would keep me permanently challenged, but I didn’t. True, once in awhile there was something new to think about while managing Molidor, but I had come to a point where my job had become such an easy thing for me that I was desperately in need of something new, so, as I listened to Stuart, I saw a great opportunity for me and told him that I did not see any absurdity in the KC’s proposition. The guy was extremely surprised that I saw it that way and said; “Rafael, I don´t agree with you, WE have our hands full with Molidor, I don’t believe WE could do the management work of another two expatriates, enough is enough”, and added, I’m going to answer their letter telling WE do not agree”.

WE, WE, WE, I thought that was enough of WE, and I said to Stuart; “Joel, excuse me but I believe you are wrong”, and added, “I believe it will not be a great deal, I kind of know our local subsidiaries from within by continuously talking to their people, and I think I could manage this new situation just as much I have managed Molidor for all these past years, besides, I think I know all their people in the administration, accounting, finances and operations departments and it will all be a matter of having their full cooperation, something I firmly believe I could get with no sweat”. The man changed the colour of his face from green to yellow, then to pale and finally to normal, just as if he was in the process of leaving from a hunted house, and said “Rafael, are you sure of what you are saying”?”, and I said “Joel, I am absolutely sure of what ‘am saying, and what’s more, I can say to you that things will bring very little, if any, changes for you, as I will take care of everything, you’ll see!. Obviously, the man had been terrified thinking that his easy life would be changed, that he would have to change his daily “doing nothing”, to a daily “doing some work”, and that was something that was far beyond what was acceptable to him. You can’t teach new tricks to all dogs. .

Stuart nervously and reluctantly accepted my suggestion to take the “challenge” and he answered KC with a “yes, WE can do it”, which KC applauded and thanked him for “his courageous decision and great spirit of cooperation”. In a matter of weeks, the management change for Mochasa was in place, the “expatriate managers of Mochasa that were set to leave were gone, making it official for our group a reduction of Management salaries and benefits in the range of $650,000 a year. Stuart became the "on paper" General Manager of the group of companies owned by seaboard and CONTI in Ecuador, and I became their “Financial Director” and "de facto" General Manager of this operation too.

In my next posting, MOCHASA’S MANAGEMENT FALLS IN MY LAP

CHANGES CONTINUE

The speed at which the changes were being made, and the clear and continuous success of each and every change we made, promptly gained for me the appreciation and the trust of the whole organization. As a result, everybody began to see me as the visible head of the company and appreciated that their requests and needs were promptly being minded and resolved. I can’t say I had a lot of help from the Managing Director (“MD”), however, it was clear for me that the man felt very comfortable and appreciated what I was doing, and was passing the relevant information along to Kansas City. In fact, as one of the top executives of Continental Grain visiting our operation once summarized it, “Rafael is doing all the managing work, and Stuart is communicating to Kansas City”.

It was by the end of 1984, that the company´s MD was elected as president of the Inter-American School´s (“IAA”) Board of Directors, this was in fact an act of gratitude from the Board due to the generosity of our company in its contributions to help finance the School´s budget (contributions which exceeded $30,000 in that year alone), more than a recognition for his merits as a parent. Immediately thereafter he came and begged me to “help” him from the position of treasurer of the Board, which I accepted. It was no surprise to me that my appointment to the position of treasurer had no other motivation than “using” me in the School Board just as he was using me at Molidor; - to do his job-. The guy was a master at manipulating and in these two cases; he had been very successful in manipulating me, or, to be more precise, he liked the way I was allowing him to manipulate me, first and above all, because I liked the way I was handling things, the way I was showing results, the way the people within the organization were appreciating the results of my work and the work of the team around me.

My work at The IAA started immediately. In terms of organization and handling of the accounting and finances, the school was a mini copy of what Molidor had been when I arrived in Guayaquil six months ago. They had no accounting books, they had no budgets, they had no payroll records, they didn´t have almost anything for my work to start from, and when we made the bookkeeper know that I was getting in to organize things, he just disappeared and was never seen again. I had to start from scratch, and again, thanks to the cooperation of the secretary, Ms Rosy Ibarra and the School Director Dr. Hudson, by mid February, we had a very comprehensive set of books, as I designed a very users´ friendly accounting system that allowed the Director and the Board to have a Monthly Financial Report, showing in a very simple but organized way, the financial situation of the School. I continued my cooperation with the School Board for the following 12 years, and, thanks to the enthusiastic support of the school parents and the companies they worked for, after two years, in 1987, the school was able to move from its small location at Las Lomas in URDESA, to the beautiful campus where it is today in Puerto Azul.

In mid July 1985, a year after I had taken over the position of Comptroller of Molidor, the first symptoms of the jealousy my continuous success had started to grow in the mind of the Managing Director appeared. He left the country on “a vacation of his permanent vacation” to the US and let me “officially in charge” of his responsibilities. In his absence, the green areas keeper, a very humble man who had been working for the company for many years on a very low wage, came to talk to Jorge Lazo and asked to let him talk to me. Jorge let me know and I said “of course, tell him to come in, I’ll talk to him”. The man’s problem was that his wage was so poor (about $3/day) that he said he was unable to live with it, and asked if I could give him a $1/day raise. The man also said he’s been working for the company for several years and had not been officially registered as a worker in the Social Security system (something that was a flagrant violation of the Labor Law). I told the man I was authorizing an immediate raise of $2/day to his wage and that upon the return of the managing director, I would talk to the MD and ask him to have this man registered as a worker in the Social Security as it was our legal obligation to do. That was the only one “executive order” I gave that year in the absence of the managing director, however, at his return, I was summoned to his office to be told by the man at the top, “that I had taken decisions in the payroll area that are only within his range of authority”.

I was appalled and I told him it was absolutely ridiculous for a man who was supposed to be the “important decisions maker” in the company to take such a minuscule fact as an example of what he said was “a serious breakage of the company’s policy regarding changes in employees’ salaries and wages”. At this point I had to remind him that up just until a few months ago, there wasn’t even such a policy or procedures related to payroll. I told the man that if he thought I was trying to step in his feet, he was welcome to fire me “on documented facts”. At the end of the discussion, the man apologized and understood that the whole incident had been caused by his secretary’s malicious intent to “divide and reign” because she was greatly jealous about the level of trust I had gotten from everyone in the company, including her boss. That was the first time I noticed the level of insecurity this man had. He had an inner feeling of guilt for he was drawing a salary (and a big one too) he did not deserve, in light of the little or no work he was doing on a daily basis. My firm response to his complaint was an insurmountable wall for this guy who was perfectly conscious of his many weaknesses and very few (if any) strengths.

After the above incident, I came out stronger than ever, the MD literally accepted the fact that I was the man on the wheel and our personal relationship got stronger and stronger. While he smartly kept the responsibility of all but a few financially related communications with Kansas City, I was in charge of managing the company, literally all the company. The man’s strongest point was his punctuality to get to the office, and leave as well. He was always seating in his office ten minutes before eight O’clock, at which time his secretary had piled up, in a very orderly way all the newspapers of the country so the man could start reading them for the rest of the morning. That was his job, reading newspapers all morning long. At noon, when he had finished reading all the newspapers, he literally locked his office’s door and ate the lunch he had brought in from his home, after which, he took a long nap. At about 1:30 PM he quietly opened his office door and allowed people to come in and talk to him. If it was an important matter, he would say “go talk to Rafael, he will take care of it”. In the afternoon, for the two hours remaining of the day, he would sign checks (something I had arranged for him to do, so he would have at least have an vague idea of who we were paying our checks to and what for), but the man would just sign anything that was put in front of him without even looking at the supporting papers behind the checks. When a few years later we were connected to internet and he learned the basics of it, and when his check book had gotten fat enough to invest in the N.Y. stock exchange market, he spent the afternoon time, literally, checking on his investments and looking for alternatives to invest, with time, he became an expert at it.

The MD was so happy with my work (which was, of course, doing most of his own work) that he even suggested and obtained approval from Kansas City to promote me to the position of Financial Director of the company (“FD”). His reports to Kansas City relating to my work were always excellent, to the point that very soon my salary and my yearly bonuses almost equalled his’.

Part of my compensation package was, of course, as an expatriate officer, the rent of the house were I lived with my family. By 1987, we lived in a very comfortable house in Urdesa Norte, right by the estuary, a place my family and I liked because it was only five minutes away from our children’s school, however, after discussing it with my wife and the children, we decided to build our own house, and therefore we requested and obtained approval from Kansas City to continue charging the company for the same amount of rent as we had been paying to the owner of the house we lived in. That was a no brainer for anyone, and the Managing Director wanted to do the same, but was flatly denied on the grounds that he was a foreigner (while I was an Ecuadorian). That fact resulted in something the MD did not like and soon he started to show his disgust with. The fact of the matter is that with the house rent I was receiving, my total compensation exceeded his and that, in his own mind was not fair. Regardless of the fact that I was the man doing all the management and he was the man doing all the newspaper reading, in his mind, he was the man to make the most money, whereas I was the man to get his appreciation for a work well done. Ever since, things never got to be the same between Stuart and I. He would leave, as a retiree, after 22 more years of newspaper reading, TV watching and personal handling of stock exchange transactions, waiting for an opportunity to get even, with the man who actually did all his work and allowed him to inflate his pocket with over five million dollars while sitting on his fat ass doing nothing. His handling of the relationship with the bosses in Kansas City was so masterly done during all those years that they never knew they had paid so much money to him for doing absolutely nothing.