To analyze change effort within your organization

1551 Hillside Dr. Beavercreek, Ohio 45432 phippsme@yahoo.com 937-212-3431 Professor, Bruce Van Apeldoorn

PM-591 Course Project

10 November 2013

Martin E. Phipps

Analyze a change effort in the organization

INDEX

Page 2: TITLE Page 3: INTRODUCTION ACL JEFFBOAT

Page 4: PRIMARY PROBLEM STATEMENT Chapter 11 Bankruptcy Liquid Transportation Division Headquarters in Houston, Texas

Page 5-7: SOLUTION Page 8-9: CONCLUSION Mission Statement Core values

Page 10-11 REFERENCES

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Analyze a change effort in the organization

MGMT 591: Leadership and Organizational Behavior Project Proposal Analyze a change effort in the organization

Introduction American Commercial Lines (ACL) started off as small company called American Commercial Barges Lines in 1915, the main cargo was transporting coal on the Kentucky River. Since 1915 ACL has grown into one of the largest marine transportation service companies in the United States. The Current fleet of 2300 Barges and over a 100 towboats puts ACL second in the Nation as the largest liquid cargo barge lines on the inland waterways reaching as far West as Brownsville, Texas and all East Panama City, FL on the Inter-coastal waterway and all the way to Minneapolis, MN on the Upper Mississippi River, and finally all the way up past Pittsburgh on the Alleghany River. ACL was sold to a global acquisition firm located in Los Angeles, CA by the name of Platinum Equity in December 2010 for roughly 777 Million Dollars. Platinum Equity specializes in mergers and operations of companies that provide mission-critical products, services and solutions for industries with high amount of diversity. ACL is headquartered in Jeffersonville, IN and employs around 2200 throughout various locations in many different river ports. When it comes to transporting goods, people have options, whether by trucks, trains or barges. What some people may not know is that barges are the friendliest on the environment. "We're the greenest form of transportation," says Hall. "We can move more tons per mile with less fuel than any other mode of transportation. It boils down to economies of scale." Inland barging is the safest and most environmentally friendly mode of transportation. The rate of large spills (more than 1,000 gallons) for inland barge transportation is less than that of rail and truck (2.59 gallons per million ton miles for barge compared to 4.89 for rail and 10.41 for truck), according to a study by the Texas Transportation Institute. The comparison study also documents that inland barge transportation emits fewer air pollutants, including hydrocarbons, carbon monoxide, and nitrogen oxides, than rail or truck. Barging is also noted by the study as the most fuel-efficient mode of transportation with the ability to move one ton of cargo 616 miles per gallon of fuel, 138 miles further than rail and 466 miles further than truck. Equally important is the reduced carbon footprint ACL emits. Similar to the inherent savings in fuel afforded by traveling on water, the company's barge transportation also generates the lowest emissions in four standards tracked by the US Environmental Protection Agency

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JeffBoat was formed in 1939, immediately prior to WWII, as Jeffersonville Boat & Machine Company, on the site previously occupied by Howard's Shipyard, one on which ships, boats and barges had been built since 1834. JeffBoat was a major builder of LSTs during WWII - wartime employment peaked at 13,000 - and then became the leading inland builder of towboats and barges that it still is today. It has built over 10,000 vessels so far, including over 8,000 inland barges. JeffBoat is one of the many divisions of ACL, it is the largest inland shipyard in the United States. JeffBoat could manufacture at least 5 cargo hoppers (Dry Cargo Barges) a week if all four lines are in production with three shifts working. The 30,000 barrel barges (Deck Barges) take much longer to make due to the technology that goes into each barge, such as centrifugal Pumps, high level and over fill alarms, pipelines and vapor lines that have to be tested to 150PSI, pressure and vacuum relief valves, just to name a few. When the Liquid barge is finally completed then it still needs to be certified by the United States Coast Guard before it can used to transport any dangerous liquid. Once these new liquid barges are in service, they are virtually problem free as long as a regular maintenance is performed.

Preliminary Problem Statement When I came to American Commercial Barge Lines the April 2000, we had over 175 boats and boasting 4500 barges and our company was on the rise. ACBL was buying up as many companies that that they could get their hands on. The purchase of all these companies left ACBL broke after the bottom dropped out of the barging rates, along with the reduced shipping volumes and too many barges not making the money they should have been making during the slow economic growth and the global economic recession. In 2003, ACBL and all of its parent companies filed Chapter 11 Bankruptcy so that they could reorganize their debt when they emerged out of the bankruptcy their name then changed to its current name American Commercial Lines The problem that ensued from all of the acquisitions happened to be that ACBL was in possession of everyone elses of derelict equipment. The number of boats and barges looked great on paper but in reality there were high price scrap heaps. This Company had the reputation of having the worst equipment on the river for this time period. The boats were rusted piles metal that barely ran and the barges were so old and warped as well. I remember I had four different gage marks on each corner of the barge when I loaded a three compartment barge. The reason that ACBL bought these boat companies was not for the equipment but for the contracts that these companies held. Once ACBL had enough sustainable contracts, they started to scrap and sell boats and barges right left. It was during the time of the Bankruptcy and the years that followed that ACL started to refurbish the

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existing boats in the fleet with updated electronics (i.e. new AIS, Internet, and cable TV for the crew), new propulsion system, new main engines and gen sets. All of the boats were refurbished to meet the ergonomic standards for crew members too. ACL looked like a company that was financially sound but in all fairness, it was a company that was completely broke from the inside out. The company retained too many employees that were not able to perform to standard for a long time. Once ACL started removing the deadwood (both in equipment and in personnel) and starting replacing with quality personnel and equipment, ACL only then started a turnaround process that enabled them to competitive on the national market as barge line operator.

Solution ACL decided to move the majority of the Liquid operations away from Jeffersonville, IN and in to the Houston so it can eliminate majority of operating cost and to be more efficient for ACLs customer base. ACL announced in August 13, 2007 the opening of its new Liquid Transportation Division Headquarters in Houston, Texas. The opening of new regional headquarters, combined with the 30 new 30,000 barrel barges built form Jeff Boat (division of ACL) in Jeffersonville, IN, starts the long-term strategic plan to capitalize it currents gains from 24% to 40% just on the through the Liquid Division alone. Senior Vice President of Sales and Marketing, Michael P. Ryan Stated, The opening of this new Liquid transportation Division in Houston has generated tremendous amount of positive feedback from our Liquid Customer Base. Establishing a permanent office presence in the marketplace provides us the opportunity to more effectively present our value proposition to our existing and new partners in the petroleum and Chemical industries ACL has made Houston, Texas its Headquarters for its Liquid Transportation Division as it is clearly stated; overall this concept can be deemed a success being as 90% of all petroleum or chemical product originates out of Texas to begin with. CEO of ACL, MIKE RYAN: One of the things we look at, not the only thing but one of the things is the available units every day. Because as we improve the efficiency of the operation, it creates more capacity, turning units faster, so -- and some of our categories I mentioned it earlier, on the 30,000-barrel units that we have, this morning there aren't any. We don't have any available to a customer, so -- and we've had that situation on 30-Ks now for about a month. So, that's the kind of tightening in the marketplace that we'd like to see, we're starting to see that in the other categories as well, and that's the sequence of recovery for us. It moves from the return of the demand that pressurized the system, and then we get into a much stronger position for stock pricing, and then contract discussions, and we are starting to see that. Now, that's going to be accented here in the second half with the

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grain harvest, but I think even as you go through the grain harvest we will continue to see this underlying element of non-grain that continues to return as well, and puts more demand for the long term on our system.

ACL started branching out with their tankering service that was a stand-alone service in order to meet the customers needs. This stand-alone service is labeled ACL Shoreside Tanking Service instead of the Vessel operated tankermen The main plan was to form a group of Tankermen that would travel from their home of record to meet the barge wherever it may be transfer the product and then head back to their home of record. The only problem with that was the Liquid Dispatcher worked out of Jeffersonville, IN at the Main Office while the Barge Tankerman Supervisor worked out Houstons Liquid Terminal and the tankermen of the north worked in four different states which were Ohio, West Virginia, Pennsylvania, and Kentucky The Main problem is the once the products leave Texas and arrive in Ohio, West Virginia or anywhere else that is not in Texas there is one person(the Tankerman Supervisor) that is trying to control all of the employees that hold a tankerman license in the Northern Area as well as all the tankermen in gulf region as well. There is just too much ground to cover for one man to be as effective as the liquid division needs to be. The supervisor had tried to get all of the tankermen all of the tankermen together for dinner on him but not everybody could attend due to the fact some of the group had to work during that time. Another time he tried to have weekly teleconference calls, but the same thing happen again some of the tankermen had to work during that those calls. Our Supervisor thought that the teleconference calls would be the most effective means of communication within our group/team but the main reason that it was not met with success was it did not bring to the table all of the required elements to the table. Out of the seven requirements and steps that he should have brought to the table to have the positive result he desired to achieve, he only brought two and those two were team members that were self-starting and High in initiative and the other were team members that worked hard to meet the team goals. The other five steps of having a virtual successful team were not even a consideration during any of the teleconference calls. Realistically, there should have been a Liquid Division Team along with supervisor in charge for the complete northern Division that was left in the Jeffersonville area to manage the to Manage all of the sales and a single individual to set up the transfers of the products for their customers for the region. The situation could have been a bit a different if these supervisor made an attempt to meet the team when became the supervisor instead of being the boss that dictated to his tankermen. The communication was not a two way at any time, which lead to his tankermen being arbitrary to anything that was presented to them by him. The resentment was felt throughout the whole team which in turn lead to him turning on all of the tankermen at didnt have his way of thinking.

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Analyze a change effort in the organization

This team could be a Self-managing team that doesnt need to have three different people that each tankerman needs to report to on a daily basis. Each tankerman can effectively plan and schedule work, assignment of work tasks, train new workers, conduct a performance evaluation, and have the quality control that needed through just one good team leader. (Schermerhorn 150) Other common problems of teams include personality conflicts and differences in work styles that antagonize others and disrupt relationships and accomplishments. Sometimes team members withdraw from active participation due to uncertainty over tasks or battles about goals or competing visions. Ambiguous agendas or ill-defined problems can also cause fatigue and loss of motivation when teams work too long on the wrong things with little to show for it. And finally, not everyone is always ready to do group work. This might be due to lack of motivation, but it may also stem from conflicts with other work deadlines and priorities. Low enthusiasm may also result from perceptions of poor team organization or progress, as well as from meetings that seem to lack purpose. These and other difficulties can easily turn the great potential of teams into frustration and failure. (Schermerhorn 154-155)

The expansion for shoreside service is a necessity for ACL and in order to become an effective reliable shoreside tankering service the need for adequate licensed personnel is a must. Without licensed tankermen the barges will not get pumped or loaded by your company and the customers will find another company with adequate tankermen to accomplish the transfer. The expansion to the shoreside tankering took off very rapidly where multiple jobs came into the system but the jobs were not even remotely close (i.e. in different states altogether) to one another for one licensed Tankerman to cover by himself at the same time there just wasnt enough work for two people to remain gainfully employed for a full week. Should the solution be to bid on more jobs in a local area and or train/license more tankerman so that each tankerman could effectively cover each area within his district? The other solution should be to place the supervisor or manager within the area in which most of its work and live in so that there adequate supervision and training can be accomplished with in our district. Tankerman: a person who is licensed through the U.S. Coast Guard to transfer liquid either by pumping the barge till it is empty or loads the barge to the required amount without spilling any product into the protected waterways. The primary function on the Tankerman is to prepare the barges that are assigned to his boat for safe and complete loading and discharging of oil, refined, and petrochemical barges. 2. The Tankerman must be able to make certain that any and all federal and state required documents that must accompany the barges are on board and in proper order.

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3. The Tankerman must be able to communicate with dock personnel and ensure that each person participating in the transfer of the product understands what the product is and how it should be transferred and protected. 4. The Tankerman must be able to participate in the maintenance of the boat and barges, and help with the training of newly hired employees aspiring to become Tankerman. 5. The Tankerman must be able to handle lines and rigging during tow building, locking, and docking activities. 6. The Tankerman must be able to work a rotating six hours on and six hours off watch schedule, and occasionally work different hours not to exceed sixteen consecutive hours without rest. 7. The Tankerman must be able to work on the boat with a schedule based on a ratio of 2 to 1 (i.e. 20 days on, 10 days off or 28 days on, 14 days off). 8. The Tankerman must be able to wear a negative or positive respirator, PVC foul weather gear, rubber gloves and boots to protect himself from harmful cargo contact. 9. The Tankerman must be able to wear a 5-minute escape pack, or a negative pressure respirator, or a supplied airline respirator. Conclusion American Commercial Lines has gone through a very dynamic change from where is has come at the start of the twentieth Century just as small barge line company that pushed coal out of Kentucky. This Company has grown exponentially in the last 98 years to become the second largest inland marine transportation company with in the United States. They didnt get to become the second largest company without a few hiccups along the way. ACL has been acquisitioned, sold off to other companies, merged with a railroad, gone into bankruptcy and have emerged out from the Bankruptcy a much leaner company that still is a leader among the inland barge transportation companies. ACL created a urgency when the bottom fell out of the economy and barging rates fell to an all-time low. That economic recession led ACL to not be able to pay for their current debt, which then lead them into a loan situation and the final step toward their bankruptcy. The ACL Bankruptcy left every employee wondering whether their jobs were safe from the ax, but the upper management insured that each and every one would have their jobs secure as long as they did their job and up to standard. ACL changed their strategy to from mainly dry cargo barges to the Liquid barges. One 30,000 barrel liquid barge could make more revenue than a whole tow of dry cargo barges put together in single day. One of the strategies that American Commercial Lines decided to go with was to do away with older barges and boats and use that capital to refurbish all of the vessels in the fleet and purchase all new barges for both the dry cargo and liquid division. At the same time ACL wanted to communicate to the entire fleet of employees, Captains, engineers, deck hands, and Customers without them they would not be where they are

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today. The vision and core values that ACL has, has been in effect for over ninety eight years will continue to guide them as they chart into future endeavors The Mission statement is to deliver premium transportation service an solutions to meet the changing needs of their customers. The values of ACL are the backbone that have kept the company one of the best in the business. One the first core value is to never compromise the safety of people, the environment, property or equipment. By making Safety the number one priority, the employees will make sure that all actions end in positive result and that there were no short cuts into the decision making process. The second core value is to Deliver Superior on time service to all of ACLs Customers. The third core value is to set the standard in transportation and manufacturing solutions by innovating solutions to be technological advantaged amongst their competitors. The right way to do things is not always the fastest way to do to accomplish required tasks but in the long run, Integrity will always win out when achieving success. Finally, Value of the products and service increase the profitability and sustainability for our stake holders and investors else that is involved which is the basis for long term success as well. American Commercial Lines wanted to make sure that all the parties that were involved were aware that of the changes that were happening throughout the Company. In order to combat the rumors that were flying around, the management sent representatives to each and every vessel to have a question and answer session the help alleviate any undue stress that the bankruptcy might have caused. They also mailed out info to all the rest of the employees that might have missed the meetings on the boat. ACL wanted the world to know that journey ahead was going to put ACL on the map for much greater things to come and chance to evolve the company to become a much better company to have a career with. Informing the bankers, stakeholders, investors, and employees alike allowed these people to minimize risk, sustain performance and to create advantage on continuous basis. All of the success that ACL has achieved has been since the emergence has not come overnight. Every monumental step forward has been part of the strategic plan to achieve it desired state. One of the successes that ACL has achieved, has been the move of the Liquid Division from the Jeffersonville, IN to Houston, Texas which enabled ACL to be more competitive against other companies that dominate the Houston Area. Even though the Gap has closed between where the liquid division was and where it is today but it has opened a gap between the supervisors and the tankermen in the Northern division. The overall success for this division could be labeled as a coup for ACL even with all of minor setbacks and inconsistencies that they have endured. By breaking down the goal of being self sustaining by a certain time frame is not an event that can be achieved by one person alone nor a single event. The reason that it has

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taken ACL many years to rid itself of derogatory name it once had is because ACL took small winning incremental steps to improve its strategic plan and the end result is a company that will be around for the next 100 years providing premium transportation service to its customers.

References

The Terminal Learning Objective associated with is proposal would be have to be D. Given knowledge of group dynamics and decision-making, apply this knowledge to a case analysis to diagnose an organizational problem and recommend solutions.

http://www.aclines.com/site/about/about-acl.html http://www.blessey.com/Employment/PDFs/tankerman.pdf http://www.businessreviewusa.com/reports/American-Commercial-LinesInc-Grandfather-Inland-Waterways18835http://web.ebscohost.com.proxy.devry.edu/ehost/detail?sid=165dfc1d -a1d34f37827bc6dc3837f6c6%40sessionmgr198&vid=5&hid=120&bdata=JnNpdG U9ZWhvc3QtbGl2ZQ%3d%3d#db=bwh&AN=32U2766610493FDW http://web.ebscohost.com.proxy.devry.edu/ehost/detail?vid=18&sid=165dfc 1d-a1d3-4f37-827bc6dc3837f6c6%40sessionmgr198&hid=120&bdata=JnNpdGU9ZWhvc3QtbGl 2ZQ%3d%3d#db=n5h&AN=B2IDMKE1034557

http://www.prnewswire.com/news-releases/american-commercial-lines-openshouston-texas-headquarters-for-its-liquid-transportation-division-58060622.html Schermerhorn, John R. Organizational Behavior, 12th Edition. John Wiley & Sons, 11/2011. VitalBook file. http://www.torbenrick.eu/blog/performance-management/how-to-ensure-successfulperformance-measurement/

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