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Are Ricoh’s employees paying for the Ikon aquistion?

March 11, 2009

We all know that Ricoh paid too much to purchase Ikon. Any of you that are in deals against Ikon know that Ricoh continues to spend liberally to pay off large leases for Canon equipment IF the customer will switch to Ricoh equipment (It must be nice to have deep enough pockets to buy market share). But who is paying the price for Ricoh generosity? Is it Ricoh’s employees?

In a cost cutting move. Ricoh apparently announced the following changes for its employees:

  • Suspend the Employer match for the 401K plan for 2009
  • No merit increase for FY2009
  • bonus control program which caps payment at 75% of the annual potential for bonus payout
  • Universal standard work week moves from 37.5 hours to 40 hours, without pay increase
  • hope these actions will save $20 million in FY2009

Did I miss the part where they told us how much of a pay cut that Ricoh’s CEO was taking? After all wasn’t he at the helm for this growth by acquisition strategy. Buying companies (like Savin, Lanier, & Ikon) doesn’t guarantee you will capture there market share. Do you think Ricoh is beginning to figure this out?

It sounds like Ricoh is trying to balance their budget on the backs of the rank & file workers. Does Ricoh really think that they will keep there best & brightest people with this plan? I think not! Especially with the Large Independent Canon Dealers & CBS growing like crazy. Hey guys (& girls) come on over the water is fine over here.

We, the Independent dealers have continued to be fiscally responsible. We don’t buy our market share, we earn it. As a result we are growing and we are hiring. In this economy that’s a certifiable miracle!

That’s my $0.02
Vince McHugh
vince.mchugh@necs.biz
WWW.NECS.BIZ

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32 comments

  1. Yikes!


  2. Oh by the way, Ricoh cost cutting moves did NOT apply to IKON employees, only ‘Ricoh’ workers.


    • Mr Anonymous,

      Isn’t that a slap in the face to the loyal Ricoh employees? Many of whom stuck with the company through the Savin & Lanier mergers. It does seem to me that Ricoh treats the people at the companies that they buy better than the people whom work for them directly. I worked for Ricoh after the Savin merger and up until just after the Lanier merger. It surprised me that Ricoh would purchase a failed company (Lanier) for pennies on the dollar and then take a large number of the people who ran that company into the ground and put them in charge of a large part of the Ricoh operation. I think that you will see the same thing when they integrate the Ikon personnel into the Ricoh organization. Let’s hope that these same people who ran Lanier & Ikon into the ground will do the same for Ricoh.

      I think you are starting to see “merger fatigue” at Ricoh. With these new cuts I think that you will begin to see a “talent exodus” from Ricoh. The smart ones already have their resumes polished up and circulating. I bet that the On Demand show will be a great place for all that Ricoh talent to start looking for their next soft place to land.


  3. There has indeed been a “talent exodus” occurring at Ricoh, for some fortunate people such as myself, who had other available options in this tough economy. My concern is also for the Savin / Lanier / Ricoh Independent dealerships that are now being treated as badly as the Ricoh employees. In the words of Nori (a former Lanier guy) to one large Dealer, “I won’t need you in fours years.” That was two years ago, by the way. Get ready for competing with IKON who will offer 3 years of free service to upgrade IKON Canon machines to Ricoh products. Keep on growing, my friend!


  4. What a joke! NECS would be the last place I would go if I was looking to bring my talents elsewhere. CBS maybe. You are a bitter man Vince. Did Ricoh steal your lunch money?


  5. Keep drinking the Kool Aid, Manny!


  6. Manny,

    We’ll see what happens when Ricoh begins to combine RBS & Ikon. There will NOT be a seat for everyone when the music stops. Are you good at playing musical chairs?

    If what I hear is correct, Konica Minolta will stop Ikon from re-selling their re-branded KM MFDs on April 1st 2009. Which will leave Ikon with only Ricoh to sell. This should cause them to move up the merger since so many of the Ikon Sales reps can’t or won’t sell Ricoh.

    How much Ricoh did you sell when you actually had a choice to sell Canon, Konica Minolta, or Ricoh? Did you sell more Ricoh than Canon? More than KM? Or where you like the typical Ikon Rep selling 30% or less Ricoh.

    Now that you will only be able to sell Ricoh did it suddenly become the best product on the planet? Maybe you ARE drinking the Kool Aid.


  7. Vince- I am not worried about acquisitions. If I am doing my job and selling then I will be fine. And I AM SELLING.


  8. Manny – who couldn’t sell with the pricing and outcost you are enjoying?


  9. Manny,

    If you can sell you will always find work!


  10. And the bloodletting continues at Ricoh, where a talented person in field sales supporting Independent Dealers was just let go today. So the answer is “yes” Ricoh employees are paying the ultimate price for the IKON acquisition. The talent pool is diminished and the RFG Dealer community suffers as well. Other field employees are getting negative commission checks (i.e. THEY owe Ricoh money!). Again, employees at Corporate and in Dealer Sales are subsidizing the IKON acquisition.


  11. I certainly hope anyone who reads this blog understands where the information is coming from. Someone who works for a competitor that continues to speak negitively without knowing the facts.

    For years the Canon organization has been the arrogant company of the industry that has become content in their minimal R&D. They have tried to rely on their branding only.

    I take specific offense to your comment “We, the Independent dealers have continued to be fiscally responsible. We don’t buy our market share, we earn it. As a result we are growing and we are hiring. In this economy that’s a certifiable miracle!” You have lost employees, even to Canon when they have cherry picked some of your best employees. Where IKON and Ricoh has grown their service organization by 15% in most areas.

    On top of it all IKON has tried to hold their margins where NECS and Canon have given away the farm in a fiscally irresponsible manner to buy the business. Over time in this economic climate the only people that are going to suffer from your extreme discounting is your customers. How many employees does Ricoh/IKON have nationally? 25,000+ Canon has approx 4500 and have plans to make it a whopping total of 7500 max. How about NECS in the Northeast?

    When you no longer have employment, I would be glad to have you contact our corporate recruiter. Let me know.


  12. Andrew,

    Thanks for the reply. I appreciate you feedback especially since you were honest enough to identify yourself as an Ikon sales rep.

    Having worked at Ricoh for over 2 years I can speak from experience. I have to laugh at a couple of your comments.

    Concerning arrogance, there was no company more arrogant with their customers or their employees than Ikon. See the post on this blog http://theconnectedcopier.wordpress.com/2009/04/25/you-are-going-to-have-to-explain-to-my-boss-how-this-happened/

    I think that you have really been drinking the KoolAid when it comes to the Ikon propaganda. No one spends more on R&D than Canon. Canon spends more in R&D then many of the other Manufacturers make in GP each year.

    Regarding profitability, Ikon was clearly struggling financially, struggling to even find a buyer. The major stock holder was shopping for a buyer to unload Ikon on for many years. Canon passed, HP passed, Ricoh paid way too much, time will tell if that will help or hurt them.

    As an independent dealer we have to make a profit, it is the only way we stay in business. Granted we make a fair profit, but we don’t give away our products or services like the _BS branches do, and we don’t arrogantly gouge our customers like Ikon did. We make an honest profit by adding value to what we sell our customers.

    As far as us “loosing employees…even to Canon”. You are mistaken, unless you are counting the guy who first went to Ricoh for a few years.

    Lastly, on your comment “When I no longer have employment”, It is Ikon and not NECS that will shortly cease to exist. Ikon has been telling people for the last decade that they would run all the independent dealers out of business. But what actually happened is it that Ikon is going out of business, the independent channel is still going strong. So I will extend the same offer to you IF you find that you don’t survive the Ricoh \ Ikon merge send me a resume and I will see if we might find a place for you in Rhode Island.

    Vince


  13. i am a km/ricoh dealer who competes regularly with ikon. the bottom line on ikon in our market: they are hated and my opinion very dishonest. have know idea how they capture any business at all. ignorant people who want to pay too much for too little.

    ricoh needs new blood. right now its full of dysfunction. the japanese will learn soon enough they need to change ricoh americas culture.


  14. You say CBS is doing well. CBS made all the field techs they kept take a 5% pay cut. Not a temporary cut, a permanent cut. So, they might be back at the same level in a year or two if they get raises. I am sure their are changes coming to IKON as well when they fall into Ricoh’s fiscal year in April. The merger will happen without a doubt. Question is, How big are the changes going to be? I know CBS & IKON employees are all stressed out & worried about their jobs. I think your opinion is biased because you said, “independents are doing well” & “the water is fine”. If, you worked for a company that you thought was in trouble you would never say it. I know a bunch of people that are working for independents. They are not doing well. They are concerned. Worried about losing their job. They already took a pay cut. They are looking for a better place to go. So, I do not think you are being honest & giving everyone the whole picture.


  15. Tom,

    I think you may be confusing CBS with Canon, they are NOT the same. CBS (Canon Business Systems) is a wholly owned subsidiary of Canon USA. They are a dealer, nothing more. CBS tries to pass themselves off as “The Manufacturer”, but CBS has never manufactured anything. They are another _BS organization (like RBS, KMBS, TABS, etc.)

    While I haven’t heard the recent numbers, from what I did hear, CBS lost 42 million dollars last year. I would hardly call that doing well.


  16. A little over a year ago my branch released one tech without cause. Two weeks ago they let go three more without cause. These were our top talent. The timing is also amazing. As supporting the Olympics leave us short, they close the parts warehouse for a whole week to do inventory then they take away our ricoh service manager and put in an IKON manager who still has no access to the Ricoh network to manage workload, and we loose three techs. IKON calls are also coming to the overwhelmed techs on top of their impossible workload. I fear the next round of cuts caused by upset customers who purchase non Ricoh equipment as a result of us failing to respond to service calls in a timely manor. Even worse… I fear I’m next. This is the reward of those who go above and beyond. So when you see a tired, sad and worried little man enter your dealership with a resume, you will understand.


    • My condolences, really. Having worked for Ricoh during the Lanier Merger I feel your pain.

      I have often heard Ricoh described as a company that hates itself. And I think there is a ring of truth to that. Ricoh seems to think that the companies that they purchase (Savin, Lanier, Ikon) have the people that will magically fix what is wrong with Ricoh. Why a rational person would think this when the a fore mentioned companies had either been bankrupt, or severely struggling financially when they were purchased is beyond me. But I too have seen Ricoh replace good, talented, hard working people, who had been loyal to them, with key people from the company that they just purchased. Maybe they have no confidence, or a low self image which makes them more easily influenced by people who “talk a good game”.

      Unfortunately the same pattern that I saw with Lanier is repeating and will continue to repeat itself with Ikon. You need to take control of your own destiny, start looking for alternate work. Don’t wait for them to let you go because the market will be flooded with talented people. I know that this can be scary, especially if you worked for the same company for your whole career. But if you can fix one BOX (copier brand) you can easily learn to fix another.

      Another thing that you can do to separate yourself from your competition is to get CompTIA NET+ certified. It is the single best certification, IMHO, that a copier tech can have to help them work on a “connected copier”. Start looking at other dealers in your area, especially Independents. Get your resume prepared, have someone proof read it. Get letters of recommendations from key industry people who you trust to keep their mouth shut. Do NOT tell your coworkers that you are looking to jump ship. Nothing good can come from this information getting out before you are ready to leave.

      Best of luck to you!


  17. Yes Yes Yes the employees are paying for this merger. All people except sales have been mandated 8 hours of NON PAID furlough every pay period. No raises, no overtime. It hurts, to the point of not being able to pay the bills. I am having to supplement over 11,000 because i had to take a company car versus using my personal car and getting reimburse. The car payment, insurance, maintenance…………everything goes away. Yes I am looking !!!!!hoping not to loose my house.


  18. Yes Yes Yes the employees are paying for this merger. All people except sales have been mandated 8 hours of NON PAID furlough every pay period. No raises, no overtime. It hurts, to the point of not being able to pay the bills. I am having to supplement over 11,000 because i had to take a company car versus using my personal car and getting reimburse. The car payment, insurance, maintenance does not go for the personal car………. Yes I am looking !!!!!hoping not to loose my house.


    • Carl,
      My sympathies, honestly. It is truly a tough time for many people in our industry. Unfortunately for you, and many other decent people, I think that the worst is still ahead for Ricoh \ Ikon. I think that Ricoh may choke on Ikon as they attempt to swallow it up. It is more likely that Ricoh will end up being run by more Ikon than Ricoh people. We shall see!

      Keep looking, and I wish you luck!


      • As a fairly new Ricoh Tech, I can assure you the feeling as we approach the merger in December is that Ikon bought Ricoh. We are going to their systems and procedures. Ricoh does seem to have the attitude with each acquisition that the purchase will fix the problems. I wish I had worked for Lanier… FSDs that worked, dispatch system that worked…
        I’d would’ve liked to see sales take some of the hits that we took, like the furlough and freezes and such. All while the sales weasels brag about four and five figure commissions.


  19. Vince,

    I understand your point. I really do. The reality of the market is that we are moving away from hardware. Value is the commodity, and I’m not sure how much you know about the _BS subsidiary’s, but that’s where all the value is coming from. The margin on Hardware is getting slimmer and slimmer because of the price war between all the industry leaders (Canon, Ricoh, Xerox, etc).

    Ricoh employees have definitely paid for the merger. But from what I have discovered, the Ikon management team is far more efficient and capable as managers then the Ricoh managers are. They actually manage and develop employees for success, instead of dumping more and more work on overworked employees. I am looking forward to these changes and efficiency improvements. The bottom line is that in this market you have make sure you continue to be valuable, and value is not only measured in hard dollars. Ikon seems to understand that competent and confident employees are the name of the game. Loyalty is equally valuable, so is service reliability and a cohesive symbiotic relationship that benefits both client and vendor.

    There will always be examples of individuals in companies who work the system instead of focusing on being competent. This is because in this country everyone wants more for less. Well not anymore. You have to earn your place.


  20. Joe,

    Thanks for the insightful comments. I think that it is pretty clear that Ikon will end up running RBS, and to some degree Ricoh USA. And I will say that you are right there are some talented people in Ikon. It sounds to me that your Branch has got a good management team and they are building some chemistry. That’s good for you!

    My concern is that it seems like the Ricoh corporate management team likes for all the branches to be “the same”. When I was at RBS we had the only branch that hit its “triple crown” numbers for the year, and this branch had never before done it in its history. At the end of the year (during the Lanier merger) they scrapped everything we put in place for the last two years to get the branch where it was (successful) because they wanted all the branches to be the same (= mediocre). I hope the same doesn’t happen at your location, because from what you are saying you have some good things going on there.


  21. Thanks for your frank views about life on the inside as a Ricoh\Ikon MAE. You make some excellent points and your frustration level comes through loud and clear. Unfortunately I don’t think that you are or will be heard by your Ricoh \ Ikon management team because they think that they know better than you.

    Your point on the hire, train, fire, hire train, fire cycle was exactly what they were doing at Lanier before they merged with Ricoh. According to one stat that I heard at an _BS management meeting the Lanier branch we merged with had over 100% turn over. When I question how you could have over 100% they said that they based it on an 18 month stay. And that they had more people leaving then coming. I will say that the young people that they had running sales teams would not have been considered even senior sales people in most sales organizations. They were just way to green.

    We all knew that Ikon wanted Canon to buy them. And truthfully all of the large Independent Canon Dealers were thrilled when Ricoh bought Ikon, though the large Ricoh, Savin, & Lanier dealers weren’t. It is refreshing to hear your honesty about how you would lead with Canon, then KM or HP or Kyrocerra BEFORE selling a Ricoh. We always saw that to be the case, until Ricoh purchased Ikon then the reps did a 180 and started to say that the Ricoh’s were the best product on the planet. While I do understand that you can only sell what you have, it sounded disingenuous (at best) to their customers. Many customers will stay loyal to their trusted Ikon sales rep at least for the first round of the new Ricoh products, but when they don’t work as well as the Canons that they use to have, and they start feeling the heat from their end users then that will strain the long standing relationship, and it will open doors for other Canon dealers, and other dealers in general to win that business.

    Brian, put out your feelers to the large Independent regional Canon dealers and see what they are offering. Speak to your former colleagues who are already over there and see what they have to say. With your background I bet that you will find a soft place to land.

    Best of luck!
    Vince


  22. Let me start by saying that Lanier was not a failed company. We were financially hurting due to the fact that Harris Corp slapped us with all their debt when they spun us off. Ricoh bought Lanier for their systems, processes and manpower.

    Now to answer your question: Ricoh employees are paying the price. Ikon is ruining our company and I will not go down with this sinking ship!

    As a specialist, Ikon has no idea of what I am capable of or exactly how to use me so they strip all of my capabilities away in an effort protect tue positions of my Ikon counterparts. I am now unable to make but a fraction of what I was making while my annual quota has more than doubled. My Ikon counterparts have to generate half of what I do with the ability to make more than me. I have invested is many industry standard certifications, they don’t even gave any. Now I get a longer commute and loose my mileage reimbursements. Layer upon layer of management has been created, again to protect the jobs of the Ikon employees. I have to say that I am very disappointed in my company and that after more than a decade with them, I have to begin looking elsewhere.


  23. I went to work for Ricoh and now I work for IKON. This is the worse merger I have ever seen. Ricoh is treating their employees like crap


    • Super,

      I lived through the Ricoh \ Lanier merger, but it sounds like we could re use the cartoon and just change the name of the Iceberg from Lanier to Ikon.

      What do you think?


  24. Apparently Ricoh employees are still paying…

    http://www.hallway.com/companies/ricoh-employee-reviews?nt=43663


  25. I work for Ricoh and previously IKON. Yes, the Ricoh employess are paying for the IKON merger. The manager and supervisor of my department have been replaced by an IKON manager and supervisor. They seem to have this impression or opinion that EVERYTHING Ricoh is wrong or stupid including all the employees. They manage through tyranny and abuse. The other people in the department are not stupid and hard workers. They (and I) do not deserve this treatment.

    Apparently, they are trying to drive us away to save positions for IKON people.

    IKON spends money like crazy getting bonuses, equipment etc., Ricoh gets nothing. Oh wait, we get threatened to be fired.


  26. I worked for Ricoh in the support center in Tucker (formerly Lanier). Every time there was a merger, entire departments were on the line. You were basically interviewing for your own job with every merger and there were many! Eventually I woke up and left in 2008. I guess everything happens for a reason…I’m making 30K more than I in 2008 did for less work. Go figure!


  27. and it continues, Ricoh just disincentivised the whole Professional Services staff by removing the short term incentives. Basically caping pay and treating the PS staff like service techs. You just install or “integrate” I’m gone



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