Rebuilding the Business 1986 - 1994 - Abigroup

And the Vercot management buyout wasn’t a panacea to all Abigroup’s commercial
woes either. ‘It was frustrating because our operations were making money and were
successful, but money we made was paying for other unsuccessful operations. Due to
the failing Hughes Brothers cash flow issues, subbies began to factor into their prices the
fact that they might not get paid on time, so costs began to balloon. We couldn’t deal
easily with suppliers that we’d previously had good relationships with because they were
no longer getting paid on time and although Bob wasn’t involved anymore, he was angry
because he felt it tarnished his reputation and his name was out there associated with
things he could no longer control. There was also a feeling in the Victorian operations
that the money we made here was being sent up to Sydney but there was never enough
allocated for our business to be sustainable, and ultimately this would affect our viability.
So it was far from perfect in many ways, even though the culture match was good.’
Ron is also keen to explain that the financial difficulties weren’t solely related to Hughes
Brothers acquisition and the Abignano ownership issues at that time. ‘In the late eighties,
the whole industry went into a downward cycle and it was very tough. We [now Abigroup
Victoria as the Salzer name transitioned out] went from nearly $100 million to $35 million
revenue in a year, with cuts in the workforce from 250 down to 50. The recent Global
Financial Crisis could’ve potentially seen a repeat of this traumatic outcome, especially
in the Building Division, had it not been for the growth in the capability and diversity
of the business that was learnt from the late eighties experience. Abigroup in Southern
Region has consequently been able to grow its business by targeting critical opportunities
in tough periods such as the Government stimulus program, and related opportunities
where we’ve had over $300 million of work from schools program down here. Currently,
the Southern Region employs 700 people and there are significant opportunities for more
growth.
‘Back then, John [Cassidy] and Darrell [Hendry] had a way of making you feel you
were on their team; together we will get it done - hence the “can do” culture. In fact,
John’s whole business model was based on it and it still serves the business well today.
For those involved in the acquisition and transition it’s a continuation of the Bob Salzer
business, really. There’s an Abigroup philosophy that was unsaid but very much lived at
Salzer, and that’s to take your idea and get on with it – seek forgiveness later if you get
it wrong. Abigroup is now a $2 billion dollar business with a conservative order book of
$4.5 billion, but I think that philosophy will underpin Abigroup’s success no matter how
big the place gets.’
‘I have no doubt that Bob Salzer would be very proud that original contributors to his
business with continuous service such as Mick McGuire (42 years), Frank Taverna (41
years) and Brian Moody (37 years) have worked for Abigroup for so long. Bob’s wish
when he sold his company to Abigroup in 1987 was that his legacy of a company that’s
recognised as having a can do culture has continued through the actions and loyalty of
people like these who are held in the highest regard by their peers.’
REBUILDING THE BUSINESS
RON LOVETT
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