4. United Fresh, PMA merger falls through

12/28/2012 12:21:00 PM
Greg Johnson

Year in Produce 2012It seemed as if the entire produce industry looked forward to the merger of the United Fresh Produce Association and the Produce Marketing Association, but the two groups’ boards could not come to an agreement in 2012.

On July 13, the two boards ended 18 months of negotiations, and the ultimate sticking point was who would lead the combined organization.

The PMA board insisted its CEO Bryan Silbermann be the head of the group, and the United Fresh board wanted the position to be open, which could have led to its CEO Tom Stenzel being the leader.

In the wake of the failed merger, both groups vow to prove their value to their members.

The Packer’s National Editor Tom Karst proposed a half-joking solution to the leadership strategy of a new merged association.

Feb. 13
Finding a way to see who wants it the most
Tom Karst, National Editor

How many times have you heard people say they love their job so much they would still do it even if they were paid nothing? Well, you haven’t heard me say that, because I have a mortgage, college loans, and the list goes on. You get the idea.

Not many people can afford to be so generous with their sentiments toward their employer or so disdainful of their pocket book. But I’ve thought about the concept as I think of a central problem that may hold up a merger between the United Fresh Produce Association and the Produce Marketing Association.

Let’s face the facts. The industry has two lead lions in the pride. Tom Stenzel is the longtime leader of United Fresh, and Bryan Silbermann is at the top of his game at PMA. Both are well-compensated for their work, to the tune of six figures plus-plus. Should the boards of a unified association decide its new leader based on lobbying prowess? Is it the track record of financial growth? Should the balance sheet or “business model” execution alone tell the tale? Number of employees? All of those questions are of little consequence. Both are familiar and trusted figures in the industry. These associations are “member driven” but are defined by their larger-than-life presidents.

Let’s assume — for the sake of argument — that both are equally qualified to lead a unified organization. How will the industry decide which lion will lead the pride?

Here is how I would approach the problem. Both men would be eligible to lead the organization, but the job would be awarded in reverse Dutch-auction style.

... Here is the scenario. Start the auction clock at $100,000 annual salary for a three-year contract and give Stenzel and Silbermann a buzzer. With every 10 seconds that passes, the salary for the chief executive officer and president would increase by $10,000. The first man to hit the buzzer would be given the job. Perhaps the buzzer would ring immediately or linger unrung until $600,000. In either case, the group would have itself one leader.

At United’s annual convention in Dallas, the produce industry awaited a solution to the issue but would be told to keep waiting.

May 7
PMA, United Fresh continue merger talks
By Tom Karst, National Editor

DALLAS — Perhaps closer to a union than they have ever been, significant hurdles remain in merger talks between the United Fresh Produce Association and the Produce Marketing Association.

Steffanie Smith, immediate past chairwoman of Washington, D.C.-based United Fresh and chief executive officer of River Point Farms LLC, Hermiston, Ore., and Mike O’Brien, past chairman of the Newark, Del.-based PMA and vice president of produce for St. Louis-based Schnuck Markets Inc., lead a task force for the merger discussions.

“No final decisions have been made, and published reports implying otherwise are incorrect,” Smith and O’Brien said in a statement May 2.

Frustration with the lack of progress began emerging both within the two associations and the produce industry as summer began.

June 11
United Fresh, PMA leave industry dangling
Tom Karst, National Editor

Three words said it all — and nothing.

With the e-mail message “talks are continuing,” Mike O’Brien, immediate past Produce Marketing Association chairman and vice president of produce and floral for Schnuck Markets Inc., St. Louis, summed up the status of merger discussions between United Fresh Produce Association and PMA.

Finally, the news emerged that the two associations reached a stalemate, and the talks were over. There would be no merger. United’s chairman David Krause was open with The Packer about the issues that doomed the merger while his counterparts at PMA, Mike O’Brien and Rich Dachman were more circumspect.

July 23
Merger derails on leadership, vision differences
By Tom Karst, National Editor

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, 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,” O’Brien said July 18.

“However, in the end we weren’t able to accomplish this.”

“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.

“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.

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.

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.”

By the time Fresh Summit 2012 arrived in Anaheim, Calif., PMA’s Bryan Silbermann could reflect on the industry that both associations empower.

Oct. 29, 2012
Silbermann envisions global future for PMA
By Tom Karst, National Editor

...Speaking about high-level negotiations between national trade associations that ultimately failed to find enough common ground, (Bryan) Silbermann said the failed merger between PMA and the United Fresh Produce Association this year won’t kill the working relationship between the groups.

... “We are certainly not an organization that believes in going it alone,” he said. “We feel a responsibility and obligation as the largest association in the industry to include whoever wants to work together with us on any subject matter.”



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