One of the first decisions that Gordon Cummings made after he was named chief operating officer of National Sea Products Ltd. last November was to delay ordering a sign for the firm’s new headquarters in downtown Halifax. “It was inappropriate to spend $50,000 on a sign when National Sea was in financial difficulty,” he told Maclean's last week. Cummings, 44, also decided to occupy two lower floors of the 17-storey building rather than putting the executive offices on the prestigious top floor. He added, “We wanted no ivory towers.” That down-to-earth management style has been the key to pulling National Sea back from financial disaster.
In late July the company, which is Canada’s largest seafood producer and maker of the Highliner brand, recorded a $7.2-million profit for the first six months of 1985, compared to an $18million loss in 1984. The turnaround took place only 17 months after government and private investors poured $110 million into the failing company as part of a financial restructuring. And in July National Sea’s board of directors appointed the highly regarded former Toronto management consultant as president-tacit approval for Cummings to proceed with his ambitious and controversial plans for expansion.
Only two years ago National Sea’s resurgence seemed improbable. In the late 1970s it had borrowed heavily to
modernize its trawler fleet and processing capacity, anticipating a bonanza from Canada’s 1977 declaration of a 200mile economic zone off its coasts. But markets for the increased catch did not materialize. As a result, by late 1983 National Sea owed $240 million, and its warehouses contained $100 million in unsold fish. To avoid bankruptcy a group of lenders —including such wealthy local families as the Jodreys, the Morrows and the Sobeys—saved the company in February, 1984.
The firm immediately tried to attract Cummings away from Toronto-based Woods Gordon, where he specialized in finance and computerized management. An adviser to the Kirby Task Force on Atlantic Fisheries in 1983, Cummings had studied the financial reports of dozens of East Coast fishing firms for clues to their problems. Said Cummings: “I had the data on everyone.” The company finally hired him as a consultant in August, 1984, and named him chief operating officer three months later.
Cummings moved quickly to stabilize the fishing giant. He closed or sold six of its 21 fish-processing plants, slashed overtime costs and trimmed the work force of 8,000 by 200. Then, Cummings ordered several trawlers modified to bring ashore better-quality fish. He also introduced new Highliner products using lighter batters to appeal to dietconscious consumers.
National Sea also benefited from a
new federal fish quota system, which guarantees it access to a maximum volume of fish. That has allowed it to increase sales by providing major customers with a steady supply of fresh fish. Next month National Sea will start operating an international trading company to supply its customers with seafood purchased from outside Canada.
Still, there are problems ahead for the revitalized company. Fishermen in the American Northeast are pressing for countervailing duties on Canadian fish exports—a move that could threaten two-thirds of its nearly $500 million in sales. And the company’s request to the federal department of fisheries for permission to use a 250-foot deep-sea factory freezer trawler, capable of frèezing fish within minutes, has met with stiff opposition. Inshore fishermen in Nova Scotia and Newfoundland say that the trawler’s higher-quality fish may devalue their own catches, while unions claim that the new trawler will take jobs from shore-based processing plants. For his part, Cummings argues that the hightech ship is needed to ensure National Sea’s international competitiveness.
But so far Cummings’s strategy is seen as a welcome model for success in the still-troubled East Coast fishery. Said Senator Michael Kirby, who conducted the 1983 fishery task force: “They have followed a blueprint for recovery.”
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