Odyssey of a job seeker when company goes bust
Suzanne Pederson knew the company she worked for was going bankrupt. But she stayed on until the end, when the company, Seatrain, a diversified shipping corporation, let most of its employees go.Skip to next paragraph
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She says she stayed on as vice-president of public relations out of loyalty to the people she worked for and because she ''got caught up'' in the frenetic last-minute attempts to keep the company alive.
Ms. Pederson, who has since landed another job, was not alone in sticking it out to the end. According to Marvin Schiller, an industrial psychologist with A. T. Kearney Inc., management consultants, a substantial portion of employees will stay with a sinking company.
They do it, Mr. Schiller explains, ''because of loyalty, because jobs may not be easy to find, because they may feel there is a stigma attached to their affiliation with the company should it go bankrupt, and because they have a desire to prove to the business community and themselves that they have the ability to make the company work.''
The question of sticking it through to the end is coming up increasingly. Bankruptcies are rising as high interest rates and then the recession have ''KO'd'' many businesses. According to Dun & Bradstreet Inc., business bankruptcy filings over the past 10 months have increased 42.2 percent from the comparable period a year ago, reaching a level not seen since 1962.
When a company goes bust, it's almost always a slow process and the employees know about it, points out Mr. Schiller, who specializes in bankrupt companies. That was so with Ms. Pederson. She had joined Seatrain in 1976, two years after it had brought in a young president to try to turn the company around.
Unfortunately, the company was weakened by a lengthy longshoremen's strike in 1977, which Ms. Peterson says ''took the starch out of everybody.'' Troubles at their shipyard, the former Brooklyn Navy Yard, and a crippling containership rate war on its North Atlantic shipping runs dealt the final blows.
By the end of 1980 the handwriting was on the wall, but Ms. Pederson as well as nearly 2,000 fellow employees, most of the work force, stayed on. They stayed on even when it became chancy to deposit their paychecks. ''It used to be a race to the bank to cash the paychecks,'' she says.
She says that as she stayed on, she considered working with the failing company ''a rare opportunity.'' For example, unhappy bondholders would call about their bounced checks, and it was up to her to explain the company's troubles to them. And stockholders, having watched the stock do a swan dive, would call up ''slightly upset, to put it mildly,'' she says. Further, employees would call to see if the latest rumors they had heard were true.
Although Ms. Pederson stayed with the company, she had her weak moments. She called up a company that advertises heavily in the Wall Street Journal, claiming it has ''the most experience'' at placing people in better jobs. The firm wanted own letters and they gave you a computer list of companies to write to.''
The outfit tried to talk her into taking out a loan, against her life insurance if necessary, to get a job. She decided she was probably better off working on her own, especially after she asked if the company would take the $6, 000 after it got her a job - to give it a little incentive, so to speak. It replied, ''Trust us.''
Finally, last February, Seatrain formally let its employees go before declaring bankruptcy.
At that point, Ms. Pederson realized her main job was getting a new job. To this end, she got up every morning at 7, showered, put on makeup, and worked straight through until 5. She wrote letters to job prospects, tried to get interviews at executive search firms, and called up business acquaintances.
She established rules for herself. For example, never turn on the television during the day to watch the soap operas. Or don't listen to other people's negative comments - such as ''It's a tough job market right now,'' since looking for a job is tough enough.
She bought an answering machine for when she went on interviews and left a message for herself: ''You're really terrific,'' she would tell the answering machine; ''they'll like you.'' At one dinner party, when the talk turned negative, she excused herself and went home. Her two children, both of whom she was putting through college, reassured her: ''Don't worry mom, you'll get a job.''
According to Mr. Schiller, getting another job after working for a bankrupt company is not easy, as Ms. Pederson found out. For the individual, he points out, it's tough, since they view it as a personal kind of defeat. And the business community often doesn't want anything to do with someone associated with a failure, either.
Mr. Schiller says that what many people end up doing to get a job is take a lower position or switch fields. Ms. Pederson did the latter. She landed on her feet at A. G. Becker Inc., a Wall Street brokerage house, as vice-president for public relations.
According to another former employee of Seatrain, about three-quarters of the workers have now found jobs.
Not everyone gets cut off during a bankruptcy. Before W. T. Grant, the large retailer, went bust, its chief executive officer, Robert Anderson, who had been hired to turn the company around, obtained an agreement by creditors that in the event of a bankruptcy, he would get paid a guaranteed amount of money for a number of years afterward. Mr. Anderson has since found another job.