The Birthday Girl (5 page)

'Hiya, Tony, you ready for the inquisition?' he asked.

'As I'll ever be,' Freeman said. He nodded at the printout in Maury's hands. 'Anything I should know about?'

Anderson held the paper out. 'I was just taking a last-minute look at the figures. It's not a pretty picture.' He sniffed and ran the back of his hand under his nose.

'Tell me something new,' Freeman said, scanning the numbers. He knew Anderson was right. The company's financial 34 STEPHEN LEATHER position was precarious at best and he could see no reasons for optimism. They were due to see their bankers at 11.15 and Freeman was expecting the worst. CRW Electronics was covering its interest payments, but cash-flow projections suggested that this state of affairs wouldn't continue for much longer. Even the time and place of the meeting underlined the way the company's fortunes were progressing. In the good old days of the Reagan arms build-up the bank officials would come to CRW's offices for lunch in the boardroom, eager to fund their expansion programmes. Now it was a half-hour at the bank's city headquarters with the minimum of hospitality. The next stage on the slippery slope would be Chapter 11, protection from creditors, unless he and Maury could do something to stop the rot. Freeman passed the printout back to Anderson. 'Your car or mine?'

Anderson smiled. 'I think they'd rather see us in the Lumina, don't you? Under the circumstances.' He sniffed again.

Freeman grinned. 'Maybe we should take the bus. Are you coming down with a cold?'

'Just a sniffle,' Anderson said. 'I think it's the air-conditioning. Hey, what do you call a blind elk?'

Freeman shrugged.

'No eye-deer,' Anderson said. '

Freeman gave Anderson a half-smile and checked his wristwatch. 'Better we get there early,' he said.

They parked the Lumina in an underground car park close to the headquarters of the First Bank of Baltimore. As they sped up to the top floor, Freeman checked himself in the mirrored wall of the elevator. Anderson chuckled. 'It's like being sent to the principal's office, isn't it?'

'Yeah. I was just thinking that it wasn't that long ago that they were beating a path to our door.'

'They will again, Tony. Once we're back on our feet.'

They were made to sit in the bank's reception area for a full ten minutes, which Freeman took to be yet another sign of the institution's displeasure, but when they were finally ushered into the corporate lending office at least he was able to greet a friendly face, that of Walter Carey, an affable man in his early THE BIRTHDAY GIRL 35 f sixties with whom he'd been doing business since he started at CRW. There was no game-playing with Walter. He walked quickly from behind his desk to shake hands with Freeman and Anderson in the centre of the room and his handshake was firm and dry. He showed them to a highly polished rosewood table, big enough to seat twenty, and waited until they had taken their places before sitting down himself. The office door opened and Walter's secretary, a smiling matron with grey curly hair and surgical stockings, backed in carrying a tray with a pot of coffee and cups and saucers. Walter got to his feet and took the tray from her, thanking her profusely. He was a gentleman of the old school, and Freeman wondered how he'd managed to survive in the cut-throat world of modern banking.

Walter put the tray down on the table as the secretary closed the door behind her. Freeman noticed that there were four cups and saucers on the brass tray - either the secretary had made a mistake or they were expecting another. Without asking, the banker poured coffee for Freeman and Anderson and waved his hand over the milk and sugar, suggesting that they help themselves. He served himself last and waited until they had sipped the hot coffee before speaking, and even then it was to enquire about their respective spouses. Walter stirred his cup slowly, far more than necessary to dissolve the single spoonful of sugar he'd put in. Freeman realised he was waiting for something. Or someone. The door opened and, as it did, Walter's spoon clattered against the side of the cup, spilling some of his coffee into the saucer. Freeman caught his eye and smiled reassuringly. Walter smiled back, but he couldn't hide the apprehension he was obviously feeling. It suddenly hit Freeman that perhaps Walter's position at the bank wasn't as secure as he'd thought. He turned to look at the new arrival.

A tall black man was closing the door, a manila file under his arm. He had broad shoulders, a square jaw and close-cropped hair, and he walked across the office like a male model on a catwalk. He flashed a smile that showed perfect teeth and as he held out his hand Freeman saw a big gold watch on the man's wrist. 'Tony, Maury, I'd like you to meet Lennie Nelson,'

Walter said as he got to his feet. 'Lennie's our new VP in charge of business development.'

Nelson's handshake was as firm as Walter's had been, but there was a slightly damp feeling to it. 'Good to meet you both,' he said, handing out business cards. He pulled out the chair at the far end of the table, the one opposite Walter, and dropped the file in front of him as he sat down. 'So,' he said. 'No need for me to ask how business is, is there?' He patted the manila file as if it were a sick child. 'This is depressing reading, but I guess you guys know that, right?'

Freeman nodded, wondering where the conversation was going and knowing that he wasn't going to enjoy the journey. 'We're suffering from the peace dividend, that's for sure,' he said.

Nelson nodded. 'You and every other defence contractor in this country,' he said. He sat back in his chair and unbuttoned his jacket. His shirt gleamed as brightly as his teeth. 'I tell you, when Gorbachev announced the break-up of the Soviet Union, while everyone was cheering and saying what a great guy he was and how it was peace at last, I was on the phone selling defence stocks like there was no tomorrow. People don't look ahead, most of them. They don't think. If I was in the defence business, I'd have seen the writing on the wall years ago and started diversifying. The margins in the defence business are like nowhere else, but if there's no business, what good does it do you, right?'

Freeman found himself nodding in agreement and saw that Anderson was doing the same. Freeman tried to speak, but Nelson raised a hand and continued unabated. 'I'm obviously not as close to the company as you are, I understand that, but I do have a fresh perspective. I can, as it were, see the wood for the trees. And gentlemen, I have to tell you that the wood is pretty rotten.'

'I don't think that's ...' Freeman started to say, but before he could get any further Nelson started speaking again. Freeman tried to continue but Nelson simply carried on talking. It was clear that he had no intention of stopping and it was Freeman who gave up first. He looked at Walter and the old man gave him a sympathetic smile.

'The way I see it, your company's problems stem from its inability, or unwillingness, to move into new product areas. From what I've seen of your inventory, the company manufactures nothing but defence equipment. Correct?'

'That's what we do,' Anderson said. 'We're a defence contractor.' 'Exactly,' Nelson said, as if Anderson had made an amazing intuitive leap. 'But unless the Cold War starts to heat up again, only die big boys are going to stay in the game. Smaller independents like CRW are going to be squeezed out. If we were having this conversation two years ago, I'd suggest that you sell the company, but I don't think that's an option any more. To be frank, I don't think you'd find a buyer.'

'Sell the company?' Freeman repeated incredulously. 'What in God's name are you talking about? We made profits last year.'

'You made a pre-tax profit of 330,000 dollars last year. But you made no provision for the write-down of obsolete inventory you're holding. You're carrying missile guidance systems to the value of six million dollars on the books. How much do you think they're worth now bearing in mind the SALT talks?'

Anderson shrugged. 'We might still find a buyer. That's why they've not been written down.'

Nelson looked at Freeman and raised his eyebrows. 'What do you want me to say?' Freeman asked. 'You're right, we're probably not going to sell them, not right now anyway.'

'They were built for a contractor who went under last year. You're never going to unload them,' Nelson said. 'And they're not the only assets that are being carried on the books at way above their market value.' He tapped the unopened file on the table. 'According to the financial projections I've made, you'll be lucky to break even in the current year, and next year you'll be in the red to the tune of 95,000 dollars. Gentlemen, diversification is the key to the survival of your company. And to that end, I have two words for you.'

Freeman grinned. 'Golden parachutes?' he said.

Nelson smiled tightly to show that he'd got the joke, but his eyes remained cold. 'Video phones,' he said.

'Video phones?' Anderson repeated. He looked at Freeman. 'Video phones?'

'Video phones,' Nelson repeated. 'Do you have any idea how many telephones there are in this country alone? More than one billion. And within the next ten years they're all going to be replaced by video phones. It's the technology of the future, and I think CRW is perfectly situated to get in on the ground floor. The video guidance system you've been developing for surface-to-air missiles could easily be adapted to a communications system. Think about it.'

Freeman stared at Nelson in amazement. He couldn't believe that a man more than ten years his junior, a man with clearly no business experience other than the management lectures he'd attended and the textbooks he'd read, should be telling him how to run his company. CRW had its own research team working flat out to come up with new products, and in fact they had already considered expanding their video capability, but it wasn't as simple as Nelson made out. Some of the largest corporations in the world were researching video technology and it didn't make sense to go up against them in the company's present precarious financial position. He was just about to unleash a torrent of sarcasm at the man when he felt a hand on his arm. It was Walter. 'More coffee, Tony?' the banker asked, the concern clear on his face. Freeman realised it was Walter's way of asking him not to make a scene. Walter Carey had been CRW's banker for more than a quarter of a century, and he'd been a pallbearer at the funeral of Freeman's father-in-law. He'd been a tower of strength, but now he looked like a weak old man, frightened for his job. The two men held each other's stare for a few seconds, then Freeman nodded almost imperceptibly. 'Please, Walter.'

The banker poured, his hand shaking noticeably. Nelson sat back in his chair, tapping his fingers on the manila file.

'It's an interesting thought, Lonnie,' Freeman said.

'It's Lennie,' Nelson said, his smile unchanged.

'It's an interesting thought, Lennie. I'll speak to our development people about it.' Freeman nodded at the file. 'Does that file contain details of the other new products we're developing? The computerised navigation system we're hoping to produce for the THE BIRTHDAY GIRL 39 recreational boating market? The night surveillance aids we're hoping will appeal to hunters?'

'And our new line of police equipment,' Anderson added. 'We're also working on a sniper identification system which tracks bullets back through the line of...'

Nelson nodded and held up a hand to silence Anderson. 'I've noted them. But until they work through to sales, they're just pipedreams. You need orders now to keep your cash flow in the positive. Has anything happened on that front recently?'

'We've a group of Middle Eastern buyers coming over to look at our minefield neutralisation system,' Anderson said.

'How much are we looking at, assuming they go ahead?' Nelson asked, reaching into his jacket pocket. His hand reappeared holding a slim gold pen.

'That depends on how many they want,' Anderson said.

Nelson clicked his pen. 'And how many do you think that might be, Maury?' he asked. 'Ballpark figure?' .

'Ballpark? A hundred. Maybe more.'

'Let's say one hundred, shall we? I don't see any reason for being optimistic at the moment. So, that would be in the region of one and a half million dollars, right?'

Freeman nodded. Nelson might be an arrogant son-of-a-bitch but he certainly knew his way around the company's numbers.

'Any other orders in the pipeline?'

Anderson shook his head.

'Well, that'll be a help,' Nelson said, making a few notes on a small yellow notepad. 'But it's not going to keep the wolf from the door for long.'

'Now just one minute,' Freeman said. 'What wolf are we talking about here? The only wolf at our door at the moment seems to be you.'

Nelson smiled, and there was something canine about the expression. 'Perhaps wolf wasn't quite the right word,' he said. He put the pen back in his jacket pocket. 'But I think it is fair to say that CRW is now on the bank's watch-list. We'll be wanting to see you on a monthly basis, and I'd like to be kept informed of any major changes in the business picture. Any new orders, any cancellations, union problems, investment plans ...'

'You mean every single business decision has to be cleared with you? Is that what you're saying?' Walter flinched and Freeman realised he'd raised his voice.

'It isn't necessary to clear anything with us, Tony. But we want to be kept fully informed of what's happening at CRW.'

'For what reason?'

Nelson leant back in his seat. An inch of starched cotton peered out from beneath the cuffs of his suit and Freeman saw the glint of gold cufflinks. 'The bank has a considerable exposure to your company. With things the way they are at the moment, we aren't prepared to risk that exposure. If you're heading for Chapter 11 or worse, we want to know in advance.'

'You mean as soon as it looks as if we're going under, you want first claim on what assets we have left?'

'We already have that. Most of the bank's recent loans to you were against specific properties owned by CRW.'

'Most, but not all,' Freeman said. 'Is that it?' The First Bank wasn't the only institution which had lent money to the company, and CRW had used various buildings as collateral against other loans. Now he understood what was worrying Nelson. If the company went bankrupt with zero cash and a next-to-worthless inventory, it would be lucky to get half of its investment back; if it foreclosed its loans right away, it would just about break even. But taking its money back would be a self-fulfilling prophecy the company wouldn't be able to survive without it. Perversely, that would work in Nelson's favour because he could point to the collapse of the firm as a sign that he'd made the right decision in pulling the plug. He'd come out of it as a hero, the man whose shrewd business savvy had saved the bank's millions.