Merger derails on leadership, vision differences - The Packer

Merger derails on leadership, vision differences

07/17/2012 06:25:00 PM
Tom Karst

(UPDATED COVERAGE, July 18) Failing to agree when it counted, the United Fresh Produce Association and the Produce Marketing Association saw 18 months of work go for naught when the two groups ended merger negotiations July 13.

While United Fresh leaders say PMA’s insistence that Bryan Silbermann be appointed the new chief executive officer of a merged association was the only reason a merger didn’t happen between the two associations, PMA merger task force chairman Mike O’Brien, immediate past PMA chairman, said there was no place for blame in the negotiations.

“Honestly I believed that we would be able to accomplish a merger and that PMA and United would be stronger working together, however, in the end we weren’t able to accomplish this,” O’Brien said July 18.

“Our goal is to move forward and do what is right for the membership of PMA,” said O’Brien, vice president of produce and floral for Schnuck Markets Inc., St. Louis.

On July 17,  United Fresh leaders said that the leadership issue stood in the way of the merger.

“The joint task force negotiated all other provisions except for one and couldn’t come to agreement ... on the future leadership of the new association,” said David Krause, president of Paramount Citrus, Delano, Calif., and chairman of United Fresh.

O’Brien said he couldn’t say that PMA’s insistence on Silbermann as the leader of the new group was the only reason the merger didn’t happen.

“From where I stand, it is not about Bryan Silbermann or Tom Stenzel. This is a symptom of two different of visions of what one combined association might be.”

PMA’s board felt having the most powerful and sustainable single association demanded the leadership of Silbermann, O’Brien said, noting that PMA and United Fresh agreed in February 2011 to the principle of selecting the chief executive officer of the merger group in advance.

While the leadership issue was identified early on as a potential problem for the negotiations, the process stalemated within the task force and later with the groups’ full boards, Krause said.

PMA’s board proposed June 29 a plan to install its CEO, Silbermann, as chief executive of the merged group, Stenzel said. The United Fresh board rejected that July 6 and countered with a proposal that would have left the position open until the 40-member board for the merged association was in place.

“PMA rejected it and hadn’t voted on our proposal and were standing on original (plans),” Krause said.

O’Brien declined to talk about specific events in the talks.

“We not here to talk about why and where and what happened because I don’t think that is really productive,” O’Brien said.

Rich Dachman, chairman of PMA and vice president of produce for Sysco Corp., Houston, said concerns focused on the strategy PMA is built on, and that it would not be continued in success without Silbermann.

“For us, it was about continuing our strategy successfully,” Dachman said. “That was the board’s main concern, that it would not happen if it wasn’t done in the way we proposed.”

United Fresh is focused on more singular issues, Dachman said, while PMA has expanded their business model to many marketing opportunities.

O’Brien characterized PMA as a global marketing association and United Fresh as a Washington, D.C.-based advocacy group.

 Krause said the failed talks are a great disappointment and many in the industry share that sentiment. While some United Fresh members are happy the merger didn’t occur, others both in and outside United Fresh have been vocal and upset that the merger didn’t happen.

“We knew this was going to be the case,” he said. “We’re disappointed, but we think we did everything in our power as the joint task force to culminate this merger.”

Dachman said PMA leaders are talking with United Fresh, looking for ways how the groups could work together and show the industry they can do some good things together.

“I’m hoping that United responds in a positive way,” he said.

Silbermann was not available for comment on July 18.

 Krause said he has heard from many in the industry who are frustrated and are intent on doing something. That could mean companies pulling out of both associations or choosing one over the other.

“We feel good about our position and our role within the industry and our membership has been clear about that,” he said.

Stenzel said United Fresh will try to highlight their importance in public policy work compared with PMA.

“We’re not going to watch the press releases say it is an equal effort by our friends at PMA because it is not,” he said.

At the same time, Stenzel said PMA also will promote its benefits.

“None of that says we won’t collaborate,” Stenzel said. “The last thing I would ever want is for PMA to be going to FDA with one message and us to be going with another message,” he said. “I’ll sit down with Bryan any day of the week to hammer out a common position for the good of the industry.”

Krause said he couldn’t predict if merger talks will be revived.

Dachman said there is no way predict if merger talks will resurface again.

“Five years ago, if you would have asked us if this would have occurred, we wouldn’t have the answer,’ he said. “I don’t think we can tell you what is going to happen in the future, we have to focus that we are moving forward as two organizations and we are going to do the best we can to achieve the goals we have and assist the industry.”

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charles pierce    
duxbury,mass  |  July, 18, 2012 at 09:07 AM

to me the issue is simple: where did united go the last 15 years under stenzel and where has pma gone under siberman??

Andreas Economou    
Philadelphia  |  July, 18, 2012 at 09:58 AM

As previously mentioned our industry needs trade associations that only protect and promote the interests of licenced USA produce businesses. Organizaions that create domestic employment and in turn their members pay the appropriate USA income taxes. So the question is, which of the two associations has always made sure the USA business welfares have been continiously sheltered and endorsed. You know the answer.

marylou owen    
minneapolis, mn  |  July, 18, 2012 at 11:22 AM

This comment has been deleted.

Jerry Welcome    
washington dc  |  July, 18, 2012 at 01:33 PM

I do not agree with Mary Lou's statement. It is not the job of the associations to do market promotion for the industry, that's more the job of each individual produce compay member. Trade associations should be there to promote the mutual interests of the industry, bring the collective voices of the industry together to address key issues and provide opportunites for members to come together to solve problems and build stonger business relationships. I think United Fresh has always done a good job of these key association goals. Clearly the produce industry is the loser here. Having a divided association structure that is duplicative and overlapping is a waste of members money and time, both extremely important inputs to a successful indstry trade group. Speaking from experience I can say putting the needs of members before the individual interests of the associations staff leadership is shortsighted and harmful to the very members that both groups seek to serve.

marylou owen    
minneapolis, mn  |  July, 18, 2012 at 11:22 AM

I am completely disappointed in the United Fresh response of pulling out because of PMA'a request to have Brian Silberman as the CEO of the combined group. In my opinion Mr. Silberman is the correct choice for the combined group. I have the upmost respect for Tom Stenzel, however the merged group needs the marketing and thrust that Mr. Silberman brings to the table. Mr. Stenzel, in my opinion, brings value and expertise to the political arena - and we need that as well - however, as in any organization there are those who are the "sails" and those who are the "rudders" - we need both and we all need to recognize which one we are to move forward.

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