Bob Isherwood: ‘Undertaker’ Helps Businesses Close Down
CARROLLTON, Texas (AP) _ Today’s business executives are trained to handle most situations, but there’s one undertaking that leaves them cold - closing down a company.
That’s when they call in Bob Isherwood.
Isherwood, 46, is sort of a corporate undertaker.
As president of The Directorate Inc., he and his staff provide assistance to $1 billion companies that are ending operations or abolishing entire divisions.
Although his work takes Isherwood and his staff around the world, they specialize in the U.S. semiconductor industry, which has been troubled recently by competition from abroad.
″I guess I’m too much of a flag-waving American to gloat on it, but it pays the rent here,″ Isherwood said in an interview at his office in this Dallas suburb.
For the record, Isherwood describes himself as a manufacturing expert who has worked in electronics recently. In the last 30 days, his firm has traveled to Italy, France, the Netherlands, the United Kingdom, Malaysia, Hong Kong, Korea and China, among other places.
″He sleeps more on airplanes than in beds,″ said Madelyn Miller, a public relations spokeswoman for the firm.
Isherwood got into the corporate undertaking business in November 1985. He came here with United Technologies Corp. and was later given the responsibility of closing down the company’s Mostek semiconductor division. The shutdown turned into a sale to Thomson Components of France, and Isherwood said he had the option of continuing with either company.
″I really just wanted to operate a business and have none of that corporate folderol,″ said Isherwood, who brought 25 years of management experience in techonology-intensive companies into his new endeavor.
During the past 18 months he and his associates have helped close divisions of five major corporations and are now working with five others, he said.
″We’ve consulted a lot but have not been totally responsible for any closings,″ said Isherwood, a Navy submarine veteran who studied at Florida State and has a graduate degree in management from the Hartford Graduate Center in Connecticut.
What The Directorate does is to advise clients on the best time from a financial standpoint to close down an operation. They know the delicacies involved in letting people go and make suggestions on incentives for top management personnel.
″The key managers have to be reoriented,″ said Isherwood, who before joining UTC rose through the ranks of Sybron Corp. after stints with Electroglas Inc., LTV Corp. and Honeywell.
While Isherwood has hired a Dallas public relations outfit to handle inquiries about his business, he claims his jobs are often so confidential he can’t talk much about them.
His evaluations require a high degree of secrecy because they are usually made for a company’s board of directors prior to the decision to close down, said spokeswoman Miller.
There are other intricacies involved, such as notifying employees, their families, state and local officials involved. Area financial institutions must be notified to help avoid problems such as refusal to accept checks and foreclosures on homes.
Inevitably, there are legal ramifications.
″Forewarned is forearmed,″ Isherwood said. ″For any factory you have thousands of contracts that have to be negotiated.″
These may range from rents to deals involving industrial revenue bonds, he said.
All steps involving the closing of a factory are difficult for executives who are not used to it, Isherwood said.
″We work in the background a good bit. We also do asset management,″ he said.
The Directorate has a staff of about 35, including experts in finance and marketing, a lawyer and specialists in materials and equipment and factory supervision.
In addition, there is a support staff involved in equipment sales and a 60,000-square-foot showroom.
″That’s an offshoot of the main business, but sometimes it’s larger,″ Isherwood said.
″We’re probably the largest seller of pre-owned semiconductor equipment in the country,″ he said.
Isherwood said the company now has an inventory of $40 million worth of devices such as ion implanters, lasers and plasma etchers used in the semiconductor industry.
″Originally, it was worth 10 times that much,″ said Isherwood.
In addition, he said, The Directorate is now handling the sale of three factories, each worth about $60 million.
According to Isherwood, there is a common misconception about semiconductor manufacturing equipment, a belief that it is so state-of-the-art that it is obsolete as soon as new technology produces a smaller, more refined electronic microchip.
″It’s simply not true,″ he said.
Equipment that is no longer practical for making a computer chip, for example, may be used in a watch chip, or in a telephone circuit, he said. The equipment can be handed down from one level to the next.
″What’s no longer state-of-the-art at one level then becomes state-of-the- ar t at the next,″ Isherwood said.