It would only be a temporary change in that respect. Just like the corner drug dealer getting arrested another will pop up to take his place in short manner.
Express 1 Buyout
- Thread starter Hyperdrive
- Start date
It would only be a temporary change in that respect. Just like the corner drug dealer getting arrested another will pop up to take his place in short manner.
Not sure you understand or not. Jacobs didn't invest in Express-1 due to being run "Horribly" nor was it "something major wrong".
If you think this way I have some trucks I'll sell you and you can go in and spend 10,000 dollars each just to get them running fairly. Then you can repair them weekly while they are earning one load a week for ya, due to being out of service for repairs.
No, Jacobs has been reviewing Express-1 and many more and knows that the company was being run/manage correctly. Express-1 is the only expedite company traded on Wall Street. It is the only Expedite Company that puts out their numbers for all to see.
FedEx CC is so far inbeded in the mix of the big FedEx that it's very hard to sort out what they are doing.
Same with LandStar and others.
So you want to invest in my poorly maintained and poorly managed trucks or do you want to invest in trucks that have been properly maintained and managed well?
"To tackle the global logistics market, Jacobs will take over as CEO of Express-1 and sweep out current management. Only the chairman, Jim Martell, will remain on the board, Jacobs said."
From this updated link.
UPDATE 3-Jacobs puts $150 mln into Express-1, aims big | Reuters
paullud
Veteran Expediter
Ummm, your quote at the end says he is getting rid of the current management. Do you think that is because he believes they are so great he cannot afford their salaries? I also said he saw something he could fix or bad management, it looks like you proved the management theory but I also think he has seen another opportunity in this. He is not investing $150 million because there is such a huge freight market that he thinks they need to expand right now, I think he is looking down the road and thinking with better management as the economy picks back up he will be able to make a lot through brokering freight since it has a pretty low overhead which boosts profit margins allowing him to sell off the company at a huge profit. I'm sure he will buy out and dissolve competition along the way.
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All of these "Investers" always put in their own managment team, for good reason, they have a lot invested and want to put in place proven (to him) a team that knows his style. I said this from day 1. You can also look for a merger of Express-1 and other compainies as they come on. Not to say that Express-1 will be no longer, just as a split from one service company to another, being managed by one. Grayhound did this when they formed a spin off company (Viad) and put all the service type companies in that group. As far as brokering freight, all carriers are in a way a broker already and some, like Express-1 are indeed freight forwarders. He has his base with Express-1 and will build on that, until he gets it where he needs it to be and dumps the whole thing. (I said that from day 1)
Express-1 has a very good managment team some may stay some will go. If you had stock in E-1 then you would know it was always about the share holders and obtaining positive growth year after year. Which they did, proveing the right managment was in placed.
As I understand it, the management that is being "swept out" is the board of directors, which makes perfect sense since Jacobs will be taking the company in a different direction and building it to a size and scope that is beyond the imagination of the board members who are being replaced. He is going to want people on the board who know how to think multi-billion-dollar big and are already experienced in operating at that level.
The managers who work day-to-day in the Express-1 office have been letting people know that they are still employed by Express-1 and they expect to continue with the company. It would not surprise me to see these people turn over as time passes. That would happen as part of the natural flow even if Express-1 had not been taken over by Jacobs.
Panther has seen new ownership and an new CEO in recent years. FedEx Custom Critical's CEO accountability path within the larger FedEx Corporation changed a couple years ago and a new operations head was brought in from outside. I do not know Landstar Express America's history well but understand that management changes in that company happened not so long ago as its relationships within larger Landstar were changed.
Expediting is a dynamic industry. A large expediting company in which management does not change would be the exception, not the rule.
The managers who work day-to-day in the Express-1 office have been letting people know that they are still employed by Express-1 and they expect to continue with the company. It would not surprise me to see these people turn over as time passes. That would happen as part of the natural flow even if Express-1 had not been taken over by Jacobs.
Panther has seen new ownership and an new CEO in recent years. FedEx Custom Critical's CEO accountability path within the larger FedEx Corporation changed a couple years ago and a new operations head was brought in from outside. I do not know Landstar Express America's history well but understand that management changes in that company happened not so long ago as its relationships within larger Landstar were changed.
Expediting is a dynamic industry. A large expediting company in which management does not change would be the exception, not the rule.
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Wonder what the golden hand shake to the old board was?
I think this what the Welch brothers had in mind all along...they had to break that magic number (stock price) to get noticed...and they achieved that goal.....They worked hard to build that company...hats off to them for that...May they reap the rewards...
I think this what the Welch brothers had in mind all along...they had to break that magic number (stock price) to get noticed...and they achieved that goal.....They worked hard to build that company...hats off to them for that...May they reap the rewards...
greg334
Veteran Expediter
Actually that would be a great reason to invest into the company. If the company is under-preforming and they see that the management of the company is the problem where they can change it and take it in the right direction, it would be a good investment. This happens often in the medium business world.
Remember this is an 'investment' not a buy out, it is not being done to continue the practices of the past but rather move in another direction that this guy sees it as a potential to either make a crap load of money or position it for a buy out and make even more. Who knows what his plans are, but it may be one of these things where we might see Express-1, division of ...
Yep, but Express-1 was not under-preforming. Call it what you want, it is a all out buy out, don't be fooled by the word "investment". The practices of the past paid off very well and will continue to do so to keep those share holders happy.
His plan are just like any other corp. raider. Buy as much as you can, merge them into other profit centers, put them all under his controll, and sell them off within five years.
Oh, and if you think that Express-1 was under preforming, then I have some of those poorly maintained trucks for ya...... Growth year after year is not under preforming nor is it a refection of poor managment..
paullud
Veteran Expediter
It really would be no different than buying a car with a bad transmission, you buy it at a price that makes sense for the condition it is in then replace the transmission. You save money by having a dysfunctional part then fix it and make it worth more.
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OK,,read about Mr. Jacobs. His new acquisition could be the next Wally World of Expediting, maybe.
greg334
Veteran Expediter
The word under-performing from our point of view may be a lot different from those at higher levels. We didn't see what they see, we are not privy to the management styles of either party, the people doing the buying may see something that they can improve on and other things they can cut.
The one thing that E-1 has a habit in doing is using the crux with their contractors that it is a "contracted rate". That to me is a cop out and just another way of cheapening the rate for them to pad profits. THIS is not conjecture but my experience and it has not changed.
My experience with this stuff, buyouts and mergers, says not to get too excited outside of the spike in the stock numbers in the short term and don't pin your hopes that what is, will be after the 'investment' is complete. It sounds great that we have a "home town" company that made it to this point but I can't see why they wouldn't have with the advice they have gotten - IPO, ISO, etc. ... Overall I'm happy for those who are going to make a bundle off of them and feel sorry if anyone loses their job over it.
The one thing that E-1 has a habit in doing is using the crux with their contractors that it is a "contracted rate". That to me is a cop out and just another way of cheapening the rate for them to pad profits. THIS is not conjecture but my experience and it has not changed.
My experience with this stuff, buyouts and mergers, says not to get too excited outside of the spike in the stock numbers in the short term and don't pin your hopes that what is, will be after the 'investment' is complete. It sounds great that we have a "home town" company that made it to this point but I can't see why they wouldn't have with the advice they have gotten - IPO, ISO, etc. ... Overall I'm happy for those who are going to make a bundle off of them and feel sorry if anyone loses their job over it.
So how many of my poorly maintained trucks do you want?
paullud
Veteran Expediter
Your analogy makes no sense, if you said you had trucks that ran fine but the driver is terrible it would be closer to what we are talking about. In that case I will take all I can and replace the drivers with ones that are more capable.
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Sure we are, we can see all there is to see about both. But now you are trunning towards contracted rates. There is no "Padding Profits" where did that come from. How would they Pad profits? Revenue is revenue and profit is profit...Leave contracted rates out of it, that is a by-product and never shows in the reports to share holders.
Oh, please make up your mind: 1st-It's an investment not a buy out, now from your post above it is a buy-out and merger.......
If you know where to look you can find everything you need to know about anything....Investors, ownership, managment, filing reports.....
Ownership Information: EXPRESS-1 EXPEDITED SOLUTIONS INC
I never said I had trucks that ran fine, maybe if that is what you read then I can see where you made no sense out of it.
Well, maybe I missunderstood your comments.
Are you saying that Express-1 was poorly managed? (driver)
Are you saying that Express-1 was or is in some kind of trouble? (transmission)
And due to these two events is the reason they were bought out?
If so, please enlighten me on where I can find this info. The facts that I have been reviewing do not reflect this. That was my point to you from the start. I see nothing that backs that up. If you have something please let me know.
paullud
Veteran Expediter
I am saying in the view of Mr. Jacobs he saw something that others did not see that could be improved on. In his view Express 1 was not firing on all cylinders, investors don't buy something that they think is at it's peak, they buy low and sell high. No I am not saying Express 1 is in the toilet just that he sees an opportunity to change things and rake in the cash, and I hope he makes a lot of others rich in the process. This is all speculation by us since we do not know what he plans yet, for all we know he is going to pay CV's a $1.50 a mile so he can get the best quality drivers and try to knock Panther, Bolt, and All State down by having more capacity and better service then buy them. Overall this is a very smart man that saw an opportunity and has gone after it to make money, I hope he helps the industry.
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ScoobyMagee
Expert Expediter
Hi all! We are o/o sprinter team we have been with E-1 for 6yrs. We are very pleased we are really getting a lot of miles in our sprinter mostly all $1.00 + fuel our average run is about 839 miles. We have been really busy 10,400= miles in the last 15 days.
ScoobyMagee
Expert Expediter
We are a sprinter team at E-1 we have been getting a lot of good miles. Life and business is full of highs and lows, if we can ride the waves it will work out fine. The key is low to no debt, when times are great bank more. Thanks E-1 we are in it for the long haul.
greg334
Veteran Expediter
Steady there steady... As paullud mentioned, not one of us can see what those at the top can see whether it is how the policy in the dispatch department works or how the upper management team plans their strategy. I can tell you how the process works, how a transition takes place and what transition teams do but I can't tell you what Jacobs and his advisors saw with Express-1 or what their over the horizon plans are post take over.
The problem is that many will look at this as great big deal without understanding what these guys are thinking. Reports, interviews and such don't tell a story when there is talks about mergers or take overs. Most of us here are contractors in one form or another and are pretty much clueless of what company strategy is. I read in another post a complaint that a contractor has with their company that the company is not contractor friendly - DUH! not many are and the larger they are, the less likely they will ever be.
By the way this is technically a take over - stock new is being issues as part of a conversion, it is not an investment like it is said. When it is an investment, the board and upper management teams are kept intact with some changes and the money is used as the board and upper management feels like using.
The other thing is yes they pad the profits for the loads, that's what the BS of the "its a contracted customer" line is all about. My contract said .77 a mile, it didn't say there will be times when we give you .70 a mile or .64 cents a mile but only .77 a mile. If they negotiate a rate inclusive to their cost with their customer, it shouldn't be a situation ever that they ask a contractor to take anything less than their contracted rate to make up the difference with that negotiated rate. IF they are offering a lower rate than contracted, then they should move to a percentage and forget the flat rate crap. The padding occurs when they maintain their profit on every load knowing that they should be taking a loss.
The problem is that many will look at this as great big deal without understanding what these guys are thinking. Reports, interviews and such don't tell a story when there is talks about mergers or take overs. Most of us here are contractors in one form or another and are pretty much clueless of what company strategy is. I read in another post a complaint that a contractor has with their company that the company is not contractor friendly - DUH! not many are and the larger they are, the less likely they will ever be.
By the way this is technically a take over - stock new is being issues as part of a conversion, it is not an investment like it is said. When it is an investment, the board and upper management teams are kept intact with some changes and the money is used as the board and upper management feels like using.
The other thing is yes they pad the profits for the loads, that's what the BS of the "its a contracted customer" line is all about. My contract said .77 a mile, it didn't say there will be times when we give you .70 a mile or .64 cents a mile but only .77 a mile. If they negotiate a rate inclusive to their cost with their customer, it shouldn't be a situation ever that they ask a contractor to take anything less than their contracted rate to make up the difference with that negotiated rate. IF they are offering a lower rate than contracted, then they should move to a percentage and forget the flat rate crap. The padding occurs when they maintain their profit on every load knowing that they should be taking a loss.
fredb29617
Seasoned Expediter
Two Late they have already been down there twice in the last 2 mos.