Employees in the corporate offices of Northwest Industries Inc. expressed bewilderment and concern over their future Thursday, one day after it was announced the company would be purchased by Farley Industries.
Fears that surfaced last week, when Northwest initiated cuts in the corporate staff to 150 from 225, were heightened by William Farley`s statements Wednesday that he expected an unspecified number of additional reductions in the payroll.
”It`s my philosophy to run a decentralized operation,” said Farley, who is chairman of the company bearing his name. ”We will not need as many people in the Chicago headquarters as Northwest had on the payroll historically.”
Simultaneously, however, Farley Industries officials moved to reassure employees, announcing a three-phase process designed to allay concerns and reduce any hardships associated with the acquisition of one Chicago-based conglomerate by another.
”We`re a company that will go the extra mile to make sure that everyone is treated with consideration and respect,” said William Hall, chief operating officer at Farley Industries. ”We not only will honor all our legal obligations, we`ll also interpret uncertainties in favor of employees.”
For Northwest`s corporate employees, the worries are the latest dip on an emotional roller coaster that has accompanied the company`s extended restructuring. For several years, everyone at Northwest has lived with the knowledge that the company might abruptly change ownership or be otherwise reshaped.
But several sources at the company said those fears were inflamed Wednesday, when Farley was vague in response to questions at a meeting with all Northwest employees. One source described employees as ”skeptical and shaken” after the meeting.
”Farley talked a lot, but he didn`t tell us anything very concrete,”
one staff member said. ”He obviously impresses himself a lot, but he didn`t impress any of us.”
In his comments to employees, Farley reiterated his assertion at a news conference that the ”chairmen of some major Chicago companies,” including, he said, First Chicago Corp. Chairman Barry Sullivan, had approached him to express interest in hiring Northwest employees.
A First Chicago Corp. spokesman would only say: ”We`re always interested in filling open positions with good people.”
Even sources close to Farley conceded that the meeting with employees was hastily prepared. Hall described the atmosphere as ”tense.”
To combat that, however, Hall said officers of Farley Industries would be available around the clock during the next two weeks to talk with any Northwest employees concerned about their future.
During a subsequent two-week period, Hall said, all Northwest employees will be interviewed by a senior member of Farley Industries` staff to determine their interest in and the availability of openings in the combined companies` corporate staff or in any of the operating companies.
In a third stage, Hall said, employees who remain will be integrated into the new company, while those who leave will receive generous severance benefits.
Hall said Farley Industries plans to honor ”every aspect” of an employee-protection agreement provided by Northwest management last week.
Under that plan, anyone leaving the company without another job will receive at least six months` salary and benefits, plus outplacement counseling in many cases.
”(Even) if we offer a person a job in the combined company and they turn it down,” Hall said, ”they will still be eligible for compensation under the employee protection agreement.”
Separately, Northwest stock was the object of intense trading Thursday, falling 50 cents a share to close at $55.37. Volume was nearly 1.1 million shares, though most of the activity took place on either the Midwest Stock Exchange or in the so-called ”third market.”
Wall Street sources said six blocks of Northwest stock, totaling 658,000 shares, were crossed by Jeffries & Co., the West Coast firm that is frequently employed by traders seeking anonymity.
Meanwhile, Moody`s Investors Service said it was reviewing Northwest`s debt ratings for a possible downgrade because the sale to Farley ”could significantly reduce the protection currently enjoyed by the company`s debtholders.”
