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The Refiner’s Fire
Maggelet agrees, saying, “We’ve now proven that we’re an over 40-year-old company with a very solid reputation. We cratered it for a few months—we really did. But we came out of it. We paid people back and people respect that.”
There are two main questions FJ Management officials are asking now: Could this experience have been prevented and what can we do to keep it from happening again?
Lortz says even though Flying J seemed to be in a very stable position in 2008, circumstances avalanched into a situation no one saw coming. The immediate problem at the time was cash flow and not having a defined plan for the company if cash wasn’t readily available.
Maggelet says to “know your cash.” Understand every aspect of where cash is coming in and going out. Identify and study all the credit vehicles available and develop a risk profile that is re-examined a couple times a year. Simulate catastrophic circumstances and determine how your company will survive if cash flow is suddenly cut off.
In Flying J’s situation, it looked like there was a considerable amount of cash when all the companies were combined, but it was never determined if independent divisions could function with their own cash.
“There wasn’t enough analysis done regarding the credit vehicles we had in the company and between the different companies,” Maggelet says. “Would it have been possible to bankrupt one of the divisions without bankrupting the parent company? If we had looked at it sooner, would that have been a better approach?”
Maggelet says what really pulled her through was her belief in the company. She didn’t listen when others said Flying J would never recover, and she did whatever she could think of to make the business succeed.
She says sticking to fundamental values like honesty, integrity and treating people respectfully helped employees, vendors, stakeholders, creditors and investors trust that things would work out. Keeping communication lines open during the bankruptcy process was invaluable. Rumors and speculation can destroy morale, and people get nervous when they don’t know what’s happening, so Maggelet made sure regular updates were distributed.
“I chose to be open from the very beginning,” she says. “I think that worked very well because over time people trusted what I would say, whether it was good or bad. I asked them, ‘Do I give you enough information?’ and they said, ‘Sometimes I think you give us too much,’ because it wasn’t always good news.”
Maggelet and the FJ Management board are ready to put the past behind them and learn from their mistakes. The company’s divisions are growing once again and Maggelet is optimistic, believing the right decisions were made.
“We’re happy about where we are,” she says. “We think we’ll be a very viable business in Utah for many, many years to come. I’m very excited about that.”