Information Technology Reference
In-Depth Information
During the 24 May meeting, the managers anonymously
passed a cost-of-living salary adjustment resolution, demanding
an increase of 0.8 per cent per month since each employee's last
salary adjustment. Did they have a complete financial picture of
the corporation? Did they know that the extended line of credit,
still awaiting the Bank's final approval, could not be used to
pay for salaries, and that Kutt had stopped receiving his own?
Kutt was absent from the meeting, but Wallace, a director of
the company with full knowledge of
MCM
's financial standing,
was not.
Everybody wanted a chief operating officer to run
MCM
's
day-to-day operations: the directors wanted it, the managers
wanted it, and even Kutt was not opposed to the idea of bring-
ing in a
CEO
to assume, under the president's supervision and
subject to the ultimate control of the board, full responsibility
for the operations of the company. Reg Rea was doing that suc-
cessfully at the Kingston plant and he could, at least temporar-
ily, have filled the much-needed
CEO
position. Unfortunately,
his managerial skills went unnoticed.
Dissatisfaction with Kutt in the managerial ranks started to
resemble open revolt. In June, nine of the core members of
MCM
wrote a memo to the board of directors requesting that Bruce
Wallace, rather than Kutt, represent their interests as sharehold-
ers on the board of directors. During the June board of directors
meeting, Kutt was informed that certain management personnel
were dissatisfied with the way Kutt was running
MCM
. He was
told about meetings between those employees and certain direc-
tors where dissatisfaction was openly expressed. In Kutt's view,
the source of the negative feelings was primarily discontent with
salaries; certain employees “wanted to buy more common shares
of the Company that I had previously agreed to sell to them.”
In July 1974, the crisis reached its climax. In the 3 July letter
sent by the Managers Committee to the board of directors, the
managers wrote,
