Benefits November 5, 2001

Ford "Repair" Talks Breakdown

November 5, 2001 (PLANSPONSOR.com) Negotiations between lawyers for Ford and attorneys for white-collar managers suing the automaker reportedly broke down over the weekend, according to the Associated Press.
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The latest round of the settlement talks began Thursday, but company lawyers and attorneys for the employees have been conferring since early October, according to Dow Jones, citing people familiar with the situation.

The talks reportedly stalled this weekend when at least two plaintiffs walked away dissatisfied with the settlement offers on the table and Ford’s reported insistence that the automaker would only agree to settle all the lawsuits together, according to the AP.

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Making the Grade?

Those suits revolve around a performance evaluation system that allegedly was used to weed out white male managers (see Managers Sue Ford For Reverse Discrimination ). That system, the Performance Management Process, was applied to Ford’s top 18,000 managers (see Ford Workers Give Performance System an “F”) before the automaker dropped or changed major elements of the program in July (see  Ford Shifts Gears On Employee Grading System).

Just prior to that decision, the AARP had said it would provide research, free legal services and attorneys to litigate the case in support of the managers bringing suit (see AARP Lends A Hand With Ford Bias Suit ).

Changing of the Guard

In an interview last week, the newly appointed CEO of Ford, William Clay Ford, Jr., said that having employees sue the company founded by his great-grandfather “breaks my heart.”

In addition to the departure of former Ford President/CEO Jacques Nasser, Ford has also dismissed David Murphy, who was Ford’s head of human resources and helped create and implement the performance evaluation process.

 

Administration November 4, 2001

SG to Buy Majority Stake in TCW

April 11, 2001 (PLANSPONSOR.com) - France's Societe Generale SA has agreed to buy 51% of TCW, parent of Trust Co. of the West, the latest European acquisition of a US asset management firm.
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Los Angeles based TCW has roughly $80 billion in assets under management, with roughly $34 billion each in US stock and bond funds, and about $5 billion each in alternative and international investments. 

The TCW deal is the latest in a string of trans-Atlantic combinations that began last year (see Europeans Buy More American Funds ).

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The deal follows a late March acknowledgment (see NewsDash Daily Roundup –  March 30 ) that the two firms were discussing a “possible alliance” that would include “marketing and cross-selling Societe Generale Asset Management products in the US and TCW products in Europe.”

Currently valued at $880 million, Societe Generale said that the agreement includes a clause allowing for the initial purchase price to be increased if TCW’s profits in 2001 and 2002 beat current expectations.

Societe Generale will pay for the stake with 14.1 million of its own shares, giving TCW shareholders a 3.33% stake in the bank.

Looking ahead

Over the next five years, the French financial giant then plans to boost its stake to about 70% in four equal installments, and could wind up paying an additional $1.6 billion for that stake. 

However, the value could fluctuate over time since the transaction is structured with an “earn out” provision that adjusts the value of the back end of the deal depending on the performance of TCW.

The deal calls for employees of closely held TCW to continue to own 30% of the money-management firm.

TCW and its portfolio managers are expected to retain considerable autonomy after the acquisition. Robert A. Day, TCW’s chairman and chief executive, will continue to run TCW with his existing management team, though Societe Generale will add two of its representatives to TCW’s board.

On December 31, TCW’s roster of institutional clients included:

  • Adolph Coors
  • CalSTRS
  • Colorado Public Employees Retirement Association
  • The Duke Endowment
  • The John D. and Catherine T. MacArthur Foundation
  • New York State Common Retirement Fund.
  • General Mills
  • Haliburton
  • Hallmark Cards
  • Michigan State University
  • Pfizer
  • Sprint
  • Xerox

Failed attempt

Societe Generale teamed up with Spain’s Banco Santander Central Hispano SA to try to acquire money manager Fayez Sarofim, but the deal fell apart when Fayez decided not to sell (see Fayez Sarofim Says “No Sale” ). 

Currently, SocGen has a small asset-management business with about $2.1 billion in assets, thanks to its 1998 acquisition of US investment boutique Cowen & Co, according to Dow Jones.

– Nevin Adams   editors@plansponsor.com

For more on the impact of these deals on plan sponsors, see Taming the New Beast .

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