Home 2003 October

Why? That’s the question that dominates the mayoral candidacy of Charles V. Ryan.

Why would someone 76 years old — who first had this job when JFK and then LBJ were in the White House, nearly a decade before I-91 was finished, and when the United States Armory was still the largest employer in the city — want to run now?

Ryan answered that question in a number of ways in a recent interview with BusinessWest. For starters, he said he was asked to run — first by a few friends and supporters, and later by a growing number of people, especially in the wake of publicity following his efforts to have the city take over its libraries from the Springfield Library & Museums Assoc. He also said he was running because no else would step forward and challenge state Sen. Linda Melconian, who announced her intentions soon after Michael Albano said he wouldn’t seek a fifth term.

"I think that’s a sad commentary on our city," he said. "There’s something wrong when the mayor’s not running and only one significant candidate comes forward; I stepped in to fill a vacuum that should never have existed."

But the real reason Ryan is running is to "right the ship," to use his words.

Holding aloft the recent financial review of the city conducted by the Mass. Department of Revenue’s Division of Local Services, Ryan said that document uses hard, plain English to say what many people have known for some time — or should have known: that the city has been spending far more money than it’s been taking in over the past several years. As a result, the state’s third-largest city is taking on water and is in serious danger of sinking into bankruptcy or receivership.

Those are words that some people in Springfield don’t want to hear, Ryan told BusinessWest, and words he says Melconian has castigated him for using.

"She believes we shouldn’t be saying things like that … that we could scare away businesses that might want to come here," Ryan said. "I think that’s the wrong attitude to have. People should be told the truth … I think they can handle the truth."

Ryan said there are a number of issues confronting the city and its business community — everything from troubled schools to a declining manufacturing sector — but the overriding concern in Springfield at the moment is finances. And he believes he can put Springfield back on course, in part because he’s occupied the office before and enjoyed some success there, but also because he has a plan for reversing the trends cited by the DOR.

"I understand the job," he said. "And I’m also my own man — I say what I want to say, and I do what I want to do. Too many politicians are beholden to too many people; I’m not beholden to anyone."

Ryan said he’s ready to give the city at least two years in the corner office, and probably four or more if his health allows him. But he said he would step down in two years if he thought the city was making progress — and if the right candidate emerged to lead the community.

In any case, he believes he’ll have enough time to set a course for reversing the city’s fiscal fortunes.

On-the-money Analysis

Ryan acknowledged that Springfield is a much different city today than it was when he first took office in January, 1962.

There has been a mass exodus of the white middle class, he said, leaving a more diverse, much poorer population in its wake, one heavily dependent on state assistance. Also, the city’s business community has changed. The Armory and many other large employers are gone, replaced by an economy dominated by smaller businesses. And what large employers remain, he said, are mostly owned by out-of-town corporations, as are many of the banks. Ryan also believes the city had better leadership in the 1960s — in City Hall and in the business community.

"We were a city on the move back then," he said. "I would speak around New England, and people would ask me what our secret was. I told them there was no secret, just honest, effective government."

Indeed, while some things have changed in 36 years, the basics of running a city have not, said the candidate, who told BusinessWest that the first rule of governing a community — or running a business or one’s personal finances, for that matter — is to spend less than you make.

This will be Ryan’s first priority, if elected, and he said that much of the focus will be on the revenue side of the equation, not the spending side.

To be more specific, he said he will mount an offensive to collect more of the property tax revenues that have gone uncollected in recent years. He will also push the state to honor its obligations to this city and all other communities in the Commonwealth.

"We’re a city in trouble … right now we’re a candidate for bankruptcy; the day of reckoning is coming," he explained. "I think it’s high time the state started to take us more seriously."

Ryan said he wasn’t running against Michael Albano this fall, and he didn’t want to dwell on what the Albano administration didn’t do or should have done. But he did tell BusinessWest that he thought the city should have put some money aside during the boom years of the late ’90s. Its failure to do so left the community with no option other than mass layoffs when the state was forced to slash local aid early this year.

"The good years are a time when you put some money in the bank and get your city looking attractive for business development — and that never really happened here," he said. "Instead, we’ve been spending $5 million a year more than we’ve been taking in the past several years. Every other community had money in the bank, but we were like a family with all its credit cards maxed out.

"When you spend more than you take in and live beyond your means, that’s a deadly combination."

Just how deadly was spelled out in the DOR’s report.

"In Springfield, past practices and the absence of sound financial policies have left municipal government wholly unprepared for any fiscal crisis," the DOR wrote. "Instead, spending on a budgetary basis has entirely consumed revenue collections. Reserves that accumulated in overlay accounts — a non-revenue source — have steadily been depleted for spending purposes. Uncollected taxes and deficit spending create enormous obstacles to generating positive free cash and are major contributors to the decline in fund balance in recent years.

"The trends are clear," the report continues. "It is becoming increasingly difficult to keep the city in the black at year end. If current practices persist, the city will continue to experience a decline in fund balance and will reach a point where it fails to meet the accepted tests of fiscal stability."

Dollars and Sense

Ryan says that, if elected, he has no intention of allowing those practices to continue.

He says he wants the city to spend no more — and preferably much less — than it takes in, and the key, naturally, is to raise more revenue, so the city won’t have to cut programs or personnel to balance its budget. And one place to start this process is in more vigorous property tax collection.

Ryan said the total owed the city is about $43 million, and it has been growing steadily over the past several years. A lack of personnel to collect bills that are past due is part of the problem, but he says the city hasn’t had the will to find solutions to this problem. "We send out a tax bill, but there’s no follow-up," he said, adding that this scenario will change under his administration.

"We need to make this a priority — and right now it’s clear that it isn’t — and we need to articulate that we intend to make sure the deadbeats honor their responsibilities like everyone else does. And I’m not going to have any amnesty periods — I want people to pay up, and that includes interest and penalties."

When asked how much of that $43 million total could be collected, Ryan said he isn’t sure, but believes the city could realize 50% or more if it becomes aggressive with tax collections and commits energy and resources to that task. If elected, he said he will seek out communities that have a strong track record in tax collections and work to employ best practices here.

He said he can and will be aggressive on tax collection, and that’s something Melconian — who was late with tax payments on two different properties 42 times over a 12-year span and cleared up past-due notices just before she announced her candidacy — can’t do.

"How can she get in front of people and try to get tough on tax delinquents with her track record?" he asked. "She can’t be taken seriously on that matter … people will laugh at her and say, ëif she didn’t pay, I’m not going to pay, either.’"

While working on tax collections, Ryan said he will also try to establish a better working relationship with the state and, in the process, work to receive more of the help that one of the largest communities in the Commonwealth deserves.

He said the state has mandated a number of programs in recent years, but has not followed through with the money to pay for them. The current fiscal crisis facing the Commonwealth is no doubt part of the reason, he said, but another is a simple lack of accountability.

"Not only is there a legal and moral obligation on the part of the Commonwealth to be supportive," he said, "it’s in the best interest of the state government to join with us in a partnership to not only save the third-largest city, but revive it."

He said bankruptcy would obviously not be good for the city, but it would also be detrimental to the Commonwealth, and this is a point he will stress to the Romney administration.

"If we got our fair share, we would be successful; it’s as simple as that," he said. "We have to restore stability to the point where our revenues exceed our expenses every year. Until or unless we do that, we’re highly vulnerable.

"This is not a highly complicated problem," he continued. "But when you’re starved for revenue — and we’re talking about revenue that you’re entitled to, from the tax deadbeats on one hand and the Commonwealth of Massachusetts on the other — you’re heading for a very bitter conclusion."

Balancing Act

Overall, he said the city must face up to its fiscal troubles and confront them, not hide from the facts or stand in denial.

That’s why he believes Melconian is doing the city and its residents a disservice by skirting words like receivership and denying that this is a real possibility for the city unless current trends are somehow reversed. He called such an attitude part of a conspiracy of silence, one that won’t fool any business contemplating a move to Springfield.

"To think that someone is going to come in here and invest $15 million or $20 million without taking our temperature or finding out what our financial condition is — that’s malarkey," he said. "All I want to do is change the facts, not use semantics to hide the facts.

"Instead of having less revenues than expenses, we’ll have less expenses than revenues," he continued. "Instead of having an empty bank account, we’ll have money in the bank; instead of having an alienated business community, we’ll have a business community that will become my partner in making this happen."

When asked what he thought he could accomplish in two years (if that’s how long he stayed in office) and if he could attract talented people to his administration knowing his time in office would be brief, Ryan acknowledged that these were fair questions.

As for the former, he said he could, in a short time, set a new tone for the city and achieve significant progress on key financial issues. He said the process starts with leadership and convincing the state that the city is being managed in a fiscally responsible manner.

"A big part of my job will be to open an aggressive, but also proper and respectful, communication with Gov. Romney and his key advisers," he said. "I want to show to them that Springfield will be under leadership that is going to run this properly and correctly and efficiently."

As for attracting talent, Ryan said he’s been able to do so in the past, and can again, by striving to recruit people who want to work on behalf of a city, and not for a mayor.

"That’s the key," he said. "If people concentrate on the city and its future, and not on how old I am or how long I might be in office, we’ll do fine."

Beyond professional staff, Ryan believes he can recruit what he called "dollar-a-year people" — retired individuals and others with expertise to lend the city on a mostly volunteer basis.

"People have already talked to me about that — they’re ready to jump in," he said. "And we’re not talking about licking envelopes; these individuals want to be part and parcel of a new leadership team.

"Part of what this mayor will do is restore effective leadership, and while doing that, we’ll work with and challenge the business sector for more, and the colleges for more, and the unions for more, from a leadership perspective," he said. "We can’t just say the mayor is the ballgame; the mayor is merely one of the leaders."

Vote of Confidence

Returning to the question of why he’s running for mayor, Ryan says he’s doing so because he believes he’s the captain that can right the ship. And he believes he can attract a talented crew to help him in the process.

"I firmly believe we can be successful," he said. "I wouldn’t be running if I didn’t believe I would get a positive response from the governments or individuals that I need to get a positive response from … I don’t believe in suicide missions.

"It’s a case of charting the course and defining the plan," he continued, adding that those basic ingredients in running a city haven’t changed in four decades.


Bob Penicka, the new president and COO of Top-Flite Golf Company, has a difficult assignment: reversing the company’s fortunes at a time when golf equipment sales are declining and industry analysts don’t know when they’ll bounce back. He believes that by refocusing some marketing efforts and tweaking already-efficient manufacturing processes, the company can drive higher sales — and profits.

Bob Penicka says the building blocks are in place for a turnaround at the Top-Flite Golf Company.

They have been for some time, said Penicka, 41, who was introduced last month as the new president and COO of the Chicopee-based institution. But some of these blocks — including winning brand names, state-of-the-art technology, and a versatile workforce — haven’t always been structured properly or utilized to their full potential, he told BusinessWest, adding that it will be his job to reverse that trend.

This won’t be an easy assignment, given the ongoing sluggishness in the golf industry and forecasts for more of the same, as well as growing competition across all lines of equipment — balls, putters, irons, and woods.

However, Penicka, who has spent the past several years working his way up the ladder at Top-Flite’s new parent company, Carlsbad, Calif.-based Callaway Golf, firmly believes that, with better utilization of the company’s assets, a return to profitability is possible — and sooner than many people think is possible.

He says that a combination of solid products and efficient manufacturing processes (foundations that have been in place), coupled with a debt-free existence as well as the pressures and incentives that come with being a publicly held company, should be a winning formula for Top-Flite.

"We’re a large enough wholly owned subsidiary to have our own P & L posted separately every quarter," he said. "You will find that having that public scorecard coming out every 90 days is a huge motivator to run your business effectively."

Saddled with heavy debt in recent years, Top-Flite, formerly Spalding, was placed under a great deal of pressure when it introduced new products and brands, said Penicka, adding that the company was forced, in effect, to try and hit home runs. Under the umbrella of Callaway, now the largest golf equipment company in the world, Top-Flite can score with doubles and even singles.

"Without the huge debt load that we’ve had for the past several years, this company doesn’t have to worry about hitting a grand slam every time it steps up and does something," he said. "Our goal is to build on a number of smaller successes, and not try to hit the jackpot with one franchise-winning or franchise-establishing product.

"Callaway Golf is in this for the long term," he continued. "We don’t have to return to profitability in one year to make this a go. That’s a goal of mine — I would like to achieve a profit next year — but we have a longer-term vision."

In a wide-ranging interview, Penicka talked with BusinessWest about Top-Flite, the golf market and its future, and his challenging assignment — to reverse the fortunes of a company that has been underachieving for several years.

Course of Action

Penicka says the Top-Flite name remains one of the most respected in the golf industry — especially within the golf-ball market — and he told BusinessWest that it’s his mission to use that name to drive profits, not merely sales.

To achieve that end, he’s putting together a multi-pronged strategy that will involve everything from revamped marketing to new product development to changes on the factory floor.

He’ll also make full use of a varied business background, one that is grounded in science, not sports, and manufacturing processes, not sales and marketing.

Indeed, upon graduating from Ohio State University in 1984 with a degree in chemical engineering, Penicka went to work for General Electric and its lighting division, where he held a number of engineering and management positions. From there, he went to Harman International Industries in Indianapolis, a maker of branded audiophile equipment, where he served as vice president of Manufacturing for the Automotive OEM Division.

He then joined Chicago-based putter maker Odyssey Golf in 1996, and was serving that company as vice president of Manufacturing when it was acquired by Callaway in 1997. He was subsequently promoted within Callaway to vice president of Manufacturing Technology, senior vice president of Golf Club Manufacturing, and, in 2001, executive vice president of Manufacturing in the golf club and golf ball operations.

He was serving in that capacity when Callaway began its pursuit of Top-Flite this past summer. Penicka told BusinessWest that he understood early on that if Callaway survived the bidding war for Top-Flite, he would be packing his bags for Chicopee.

And as the bidding process for the company continued, Penicka started to scrutinize the company he had watched from 3,000 miles away. While he was not able to talk directly with employees and managers at Top-Flite until the deal actually closed on Sept. 15, he was able to make observations and begin the process of plotting a new course of action.

One thing he and others at Callaway noted was that Top-Flite needed to refocus some marketing dollars. In recent years, Penicka explained, the company invested heavily in marketing its Strata lines of golf balls and its Ben Hogan lines of irons, at the expense of what has historically been the company’s bread and butter — the value-priced Top-Flite golf ball models.

"The Strata and Ben Hogan brands are important to this company, but so is Top-Flite, and it has been getting the short end of the stick recently," he said. "I believe that if we spend some money on that brand, we’ll see an impressive return on that investment."

By focusing more marketing dollars on Top-Flite products, the company will likely regain some of the market share in the value-priced segment of the market that has been lost to a host of new competitors, including Nike, Titleist, Maxfli, and Callaway itself.

Top-Flite once owned about a quarter of the value-priced ball market, and has seen that share erode to about 15%, said Penicka, adding that the company can regain some of what it lost by pushing the brands that put it on the map.

Aggressive marketing will be necessary, he said, because the golf market is not growing at present — Callaway and other companies have created programs in an effort to involve more people in the sport for the long term — and that means equipment makers will have to take a bigger piece of the existing pie if they want to grow.

"I think stagnant would be a generous term to describe what’s been happening in the golf market," he said, adding that sales have been declining for several years for a number of reasons, including everything from the prolonged economic slump to the fact that many young people simply don’t have the time for a game that takes five or six hours to play.

While re-directing some marketing dollars, Penicka will also look to streamline some of the production processes, with the goal of making the company more flexible overall. He described the Chicopee plant as efficient and certainly current with new technology, but he believes there is capacity that is not being utilized.

"Top-Flite is the low-cost producer in the United States, and I think it can compete with some of the golf ball manufacturers in Asia that have very low labor costs," he said. "But there are some opportunities we can take advantage of."

Specifically, he believes the company needs to become more responsive and reduce its lead times.

"We’ve got a large, high-volume factory that is set up to run in big batches; the factory evolved over the years and wasn’t laid out with a lot of flexibility in mind," he explained. "Our product mix has become more complex, and our customer base has become more complex — and demanding. I think there’s some opportunity to go to smaller, batch-type production to where we can be much more responsive to our customers than I think we have been in the past."

Top-Flite has placed a great deal of emphasis in recent years on the quantity of golf balls it produces at its plants in Chicopee and Gloversville, N.Y. — about 1 million a day, according to recent counts — but in the future, more focus will be put on profitability, not sheer volume.

"That will be our priority," he said. "We’ll be happy if, in some categories, we have to sell less product, but can spend less against it and make it more profitable than it’s been. We need to stress profits, not sales."

Looking for a Bounce

Penicka joked to BusinessWest that there are some things about California he won’t miss — including the insanity of the gubernatorial recall vote. "I’m coming to a state where people don’t have to face the prospect of seeing an actor on the ballot," he said.

In making that move, however, he’s taking on a huge challenge, one he believes the entire company is up for.

"I see building blocks here that we can use as the foundation to return to profitability," he said. "There is a great workforce of knowledgeable, motivated people who are hungry right now.

"They want to build on their success and restore the image of the Top-Flite company to what it once was," he continued. "I don’t think it will take us too long to do that."