The right-wing blogosphere lit up yesterday because of Wisconsin Reporter‘s report:
In attempting to explain her two-year work hiatus in the early to mid-1990s, Democratic gubernatorial candidate Mary Burke has said she was just burned out after an intense period of leading European operations for Trek Bicycle Corp., her family’s Waterloo-based global manufacturer.
In fact, Burke apparently was fired by her own family following steep overseas financial losses and plummeting morale among Burke’s European sales staff, multiple former Trek executives and employees told Wisconsin Reporter.
The sales team threatened to quit if Burke was not removed from her position as director of European Operations, according to Gary Ellerman, who served as Trek’s human resources director for more than 21 years. His account was confirmed by three other former employees.
“She was not performing. She was (in) so far over her head. She didn’t understand the bike business,” said Ellerman, who started with Trek in 1992, at the tail end of Burke’s first stint as a manager at Trek.
Ellerman said Richard Burke, Mary Burke’s father and founder of the family business, asked Tom Albers, Trek president and chief financial officer at the time, to fly to Amsterdam to evaluate Mary’s performance.
It wasn’t a pretty picture. The European operations were in disarray, Ellerman said.
Full disclosure: Ellerman is chairman of the Jefferson County Republican Party. As to the possibility that his accounts are politically colored, Ellerman said, “I was there. This is what went down.”
A former employee with the company told Wisconsin Reporter that John Burke, Mary’s brother and current Trek president, had to let his sister go.
The former employee, who asked not to be identified for fear of reprisal from the Burke family, said Mary Burke was made to return to Wisconsin and apologize to a group of about 35 Trek executives for her treatment of employees and for the plummeting European bottom line.
Managers in Europe used to call Burke “pit bull on crack” or “Attila the Hun,” one source said.
“She never made money in Europe when she was there … Germany was gushing blood and it would take profitability from everywhere else,” the former employee said.
“There is a dark side to Mary that the people at Trek have seen … She can explode on people. She can be the most cruel person you ever met,” said Ellerman, who started a consulting business after he was “asked to leave” Trek in 2004 over a difference in hiring philosophy.
As HR director, he said he heard plenty of complaints about Mary Burke, but he said she was “hands off and everyone knew it. She was absolutely bulletproof. She could do anything she wanted.”
To a point, apparently.
In her campaign against Republican incumbent Gov. Scott Walker, Mary Burke has bragged that European sales climbed to $50 million on her watch. She originally said the increase was closer to $60 million in a 2004 resume to officials in Gov. Jim Doyle’s administration, the Democrat who in 2005 tapped Burke to be his secretary of the now-defunct state Commerce Department.
Ellerman and the other employees tell Wisconsin Reporter that Burke’s sales boasts are lies, that the European division did significantly lower numbers — at least $10 million lower — during her tenure as director. Most of the sales increases, they said, were in Trek’s United Kingdom market, which was well established before Burke arrived, and in the Japan operations, which Burke had nothing to do with. Any growth in sales was well offset by the losses sustained in Germany and other European countries, according to the former executives.
Trek is a privately held company and does not disclose its sales or earnings figures. Mary Burke, too, has refused to provide documentation of the numbers. …
“She had a list of excuses, but the fact is she made fatal errors. She thought she knew everything,” the former employee said.
John Burke, who at the time was vice president of sales and marketing, was forced to “unravel” the mess his sister Mary made of the European operations,” the former Trek employee said.
The former employees’ recollection of Burke would seem to jibe with Burke’s predecessor at the Commerce Department.
“She’s a disaster,” Cory Nettles, secretary of Commerce under Doyle from 2003 to 2005 told one of Doyle’s top aides in a 2006 email, according to a Milwaukee Journal Sentinel story published earlier this month.
Nettles told the newspaper he didn’t remember sending the email, which the Journal Sentinel obtained in an open records request.
Regardless, he said he does not feel that way anymore.
The Burke family, publicly at least, has had nothing but smiles and accolades for Mary Burke, praising her business acumen.
John Burke’s book about his father, published in 2012, refers to Mary as “the brains in the family.” In the book, One Last Great Thing: The Story of a Father and a Son, a Story of a Life and a Legacy, John applauded his sister’s performance in Europe.
“I hired my sister Mary, the brains of the family, to move to Europe and run the business. Mary and her team opened Austria, Spain, the Benelux, and France the following year. Trek’s business in Europe took off,” John Burke wrote.
That’s revisionist company history, sources insist.
Following her forced apology, they say, Mary Burke left her family company in a huff in 1993, taking off for the snowy mountains of Colorado and Argentina — her “snowboarding sabbatical,” as some of the candidate’s critics have derisively put Burke’s personal work stoppage.
While Burke told the Milwaukee Journal Sentinel last month that she wanted to “resolve any inconsistencies” about her time away, the details and the timing remain foggy.
Burke told a Doyle administration official in 2005 that she was burned out from her European Trek stint.
“This had been a very demanding job, and as a result I decided I needed some time off,” Burke wrote, as quoted in the newspaper story. “I joined some Spanish friends of mine and moved to Argentina to snowboard for three months.”
Not true, according one former Trek executive.
“She made the statement that she was burned out. She wasn’t burned out. She was fired. (The firing) was definitely over performance issues and there were major people problems over there,” said the executive who also asked not to be identified because the source believes the extraordinarily wealthy Burke family will “destroy any individual” who brings such information public.
She did some other things during her two-year break from Trek, but full-time employment during that period wasn’t Burke’s scene.
Burke’s resume notes that she returned to Trek in 1995 as director of forecasting and strategic planning.
Not quite true, according to Ellerman and other sources.
“I remember (Richard “Dick” Burke) talked to (John Burke). I was there. Dick said we need to bring her on, so they put her in a marketing role and she worked for the marketing director for a while,” Ellerman said. It didn’t last. “She was creating dissatisfaction in the marketing world so John came to me and asked me, ‘What can I do?’ I said, ‘I can’t touch this.’”
Then, Ellerman said, Burke’s father and brother created the strategic planning role.
Another employee who worked with Burke confirmed Ellerman’s account. …
Ellerman claims that throughout Burke’s tenure with Trek, she showed that she was not a person who could bring people together.
“She is very divisive, very opinionated, but she’s not smart enough to have the right opinion,” Ellerman said. “But she’s a Burke, and she got to do whatever the hell she wanted.”
The Milwaukee Journal Sentinel adds another named source:
“I’m not saying she was incompetent,” said Tom Albers, former Trek chief operating officer who left the company in 1997. “Maybe this job was too big for her.” …
Albers said in an interview Wednesday that he was sent to Europe by Richard Burke, the company founder and Mary Burke’s father, to look into problems with the European sales expansion that Mary Burke had been entrusted to head up in the early 1990s.
Albers said John Burke had concerns that his sister was not working out as the point person on the difficult job of switching from outside distributors of Trek bikes in Europe to a company sales force that spanned different countries, cultures and languages.
“I came back and pretty much reinforced what John Burke had told (Richard Burke) that this wasn’t working, and a change had to be made and a change was made,” Albers said. “I felt she was under water and it was going to be very difficult to turn it around.” …
Albers said that he spoke with Mary Burke when he visited Europe and could see why the challenges of the job might have left her frustrated or burned out.
“From my standpoint, there was some truth to that,” he said, citing the difficulties. “But I think there was more to it.”
Trek’s European operations were losing money and there were many people problems there because of Burke’s “my way or the highway” approach to managing personnel, Albers said. At the same time, Albers repeatedly emphasized that Burke faced an unusually difficult job in having subordinates in different countries with different backgrounds from her own.
Albers said that in his understanding Burke “was fired,” but noted he did not know how the decision was discussed within the Burke family.
Albers said he had resolved to answer questions if asked about Mary Burke but not to volunteer them himself. He said he was concerned that he would face criticism and attempts to discredit him and repeatedly said that he respected Trek as a company and was concerned about appearing to detract from it.
Albers’ statement might apply to how most business people feel about getting into politics — they have justifiable concern about how their political activities might hurt their business. Recall that during Recallarama such Wisconsin companies as Johnsonville and Kwik Trip were boycotted by Democrats because their employees dared to exercise their First Amendment rights to donate to political candidates. (Not that that appears to have hurt either, since conservatives quickly organized a “buycott” to support businesses that gave to Walker. For that matter, Maria’s Pizza, boycotted because its owner put a Walker sign on the front lawn of her house, soon found itself with … much more business.) At least one conservative I’ve seen on Facebook says he will never purchase a Trek bicycle. I’m sure that’s not what the Burkes had in mind when Mary thought about running for governor.
The important word in the term “family business” is “business.” Just because you have the right last name does not earn you a right to participate in company management. I’ve watched that lesson play out since I got into the business media two decades ago. (The corollary, however, is that in a family business the right last name might make someone untouchable, even if that person is proven incompetent. Fans of the Milwaukee Brewers found this out during the post-Bud Selig/pre-Mark Attanasio era.)
Reading this gave me more respect for the Burke family (not that I lacked respect for the business; as I’ve said before, the Republicans made a mistake attacking Trek Bicycle when Trek is a great Wisconsin business success story), at least until WITI-TV‘s report of Trek’s reply …
“This last-minute attempt to disparage Mary’s contributions to Trek is attributed to Gary Ellerman, Chairman of the Jefferson County Republican Party. Mr. Ellerman was fired from Trek in 2004. His politically motivated characterizations of Mary and her tenure at Trek are inaccurate. When Mary was in charge of Europe, she grew sales from $3 million to $50 million. In 1993, Mary decided that it was time for her to make a change and she left Trek. In 1995, John Burke asked Mary Burke to return to Trek to help with some key areas of the business. After she returned, Mary assumed the lead of Trek`s Global Forecasting department.”
… which really doesn’t deny Ellerman’s statements other than the sales figure. Trek as a private company (that is, a company whose stock is not available for public purchase; that is, 99.9 percent of U.S. companies) does not have to release public information about itself — financial information, who does what at the company, or anything else. The credibility of that statement is open to question, however, without more detailed information from Trek, though Trek doesn’t have to release that information.
Mary Burke herself didn’t exactly clear up things either. After she made the nonsensical statement, “This is the sort of nonsense, six days before an election, baseless allegations that are deterring from the issues, frankly that are really important here in terms of getting people out and making sure they understand the issues” (try diagramming that sentence, Madison English teachers), Wisconsin Reporter reported this Wednesday night, which too isn’t really the opposite of Ellerman’s claims.
Any father out there also can sympathize with Dick Burke’s telling his son to find a place in the company for Dick’s daughter, whether or not Mary should have been working for the company. I have a hard time believing the phrase “You’re fired, Mary,” would have been used in any sense. And I can see John Burke writing something nice about his sister because he’s his sister, whether or not it’s entirely accurate.
However, nearly all of Trek’s employees and all of Trek’s customers are not from the Burke family. If a family business fails, yes, the family members who participate in the company take a financial hit, but so do all its employees, all its customers (including all the bicycle stores that sell Treks) and all its vendors. That’s why the state of the business is paramount in a family business.
This is why family businesses transitioning to a new generation bring in outside consultants to evaluate the next generation and which of them (if any) are best suited to lead the family businesses into the next generation. Sometimes those evaluations leave hard feelings among the non-chosen ones, but the failure to choose the right leader(s) helps explain why so many family owned companies flounder after the founder’s generation exits. That also explains why some family businesses have family members who have an ownership interest, but don’t work for the company.
As it is, everyone knows that Mary Burke’s campaign is summarized in four words: I’m Not Scott Walker. So maybe no additional comment is needed, but a fair appraisal of Burke as the would-be governor requires it.
No one should care whether Burke is Miss Sunshine in her dealings with other people, unless you work for or with her. Voters should care, however, how competent she is in executive duties, since the governor is the state’s CEO. Notice sentences like “She was not performing. She was (in) so far over her head. She didn’t understand the bike business.” And “She had a list of excuses, but the fact is she made fatal errors. She thought she knew everything.” And “Maybe this job was too big for her.” No expert in business would consider any of that to demonstrate competent management or leadership.
Burke also brought this on herself by touting her business experience. At no point has she said what she did — strategic decisions she made, initiatives she led, or her product or service or marketing innovations — that created this 16-fold increase in European sales. We haven’t even heard what Trek employees working for Burke did, nor have we heard from those employees what a great boss she was. (We did hear those things about Mitt Romney two years ago, which should have convinced more voters than it did.) We’re all supposed to believe, just by her own claims, that she’s a whiz at business. (Which begs the question of if she’s so great in business, why isn’t she in business now?)
Irrespective of what she did at Trek (and mischaracterizing what she did at Trek), combining classless unpleasant rhetoric with advocating anti-business policies makes for a toxic stew. Burke is the candidate of the anti-business party, and she has done nothing to suggest that the views of her party’s mainstream are any different from her own. (She hasn’t said her own position on offshore outsourcing, which her party opposes and her family business does.) If you are honestly trying to win over undecided or nonpartisan voters, you have to give them a reason to believe that you don’t represent the bad people within your own party. (For instance, Bill Clinton, as well as Gov. James Doyle’s famous comment, “We should not, we must not, and I will not raise taxes,” a few years before Doyle raised taxes $2.2 billion.)
The evidence is that Burke as candidate is only parroting what Democratic constituent groups tell her to say. She wouldn’t be the only political candidate to be a puppet; voters have to decide if what a candidate says is what the voter agrees with or believes. It certainly makes you wonder what kind of governor she would be, though.