Rusty Gregory explains MMSA layoffs

mmsa21 years ago, Mammoth Mountain went through what was called Black Monday – the layoff of 150 employees after a series of droughts.  This year, the layoff number was half that but the agony just as bad.  Mammoth Mountain CEO Rusty Gregory said that the regional drought and low skier demand led to “draconian and severe reactions.”

The CEO explained that every few years the Eastern Sierra suffers drought.  Contingency plans for drought, he said, get more severe the more severe the drought is.  This year, he said, it was a national phenomenon and the perception of virtually no winter hurt the ski industry across the nation.  As of Wednesday, he said. skier visits were down 33% and revenues by 29%.

Wednesday’s layoff included 75 year-round employees with an average longevity of 10 years.  Two vice presidents were in the group of lost jobs.  One had worked at the Mountain for over 40 years.  Gregory said the Mountain faced a drop off of $40 to $45 million in revenues – not enough, he said, to stay in business.   The CEO said, “We re-did our priorities which were to keep the doors open and maintain a great guest experience.”  Those whose jobs were not directly related to the on mountain experience were listed for layoff.

Gregory said, “These were 75 year-round employees that we normally need.  We don’t have the money to pay them.” He added that everyone who was laid off was in good standing.  He said he hopes he can re-hire them, but not until the Mountain is financially able.  Among those who lost jobs were workers in accounting, supervisory positions, maintenance, mechanics, equipment operators, information technicians.  Some were in management, others were not.  Gregory repeated that you “can’t take $40 to $45 million out of an annual $150 million budget and wait to go broke.”

Earlier in the winter, Gregory had cut expenses and finally cut hours and pay.  He said President’s Holiday looked good, but it wasn’t enough.  Gregory met with top management in several day long meetings.  He said they looked at what jobs to eliminate or consolidate.  Labor takes up 50% of the annual $150 million in revenue, according to Gregory.  Officials decided to reduce the cost of employees in the amount of the revenue reduction.

Gregory did agree to some severance and to health insurance for employees and their families for a period of time related to years of service. Year round, Mammoth Mountain employed 359 people.  The layoff of 75 amounts to 20.8% of the workforce there, according to Gregory.

How will the Mountain deal with maintenance and the “fix-it” time of year  during spring and summer?  Gregory said, “We’ll get to it when we get to it.” He repeated that the priority is to keep the Mountain open as a good experience for guests.

After Rusty and his executives put together a plan, top management, mostly, delivered the bad news to workers on Wednesday.  As of Thursday, the layoffs were still underway.  Going forward, Gregory said, “I hope to re-hire.  In the past, a significant number have been brought back at the same pay and level of benefits, but,” he said, “it certainly will not be until winter.”


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29 Responses to Rusty Gregory explains MMSA layoffs

  1. Bret March 1, 2012 at 3:32 pm #

    Can I ask you a question Rusty”? 
    How many in the layoffs were SENIOR MANAGEMENT MEMBERS, you know the ones that make the most on the Mountain??? 
    How about all that money you spent/wasted on the Marketing Department, especially 
    Howard Pickett the one you wrote an email essay describing how great he was and how 
    Mammoth was so lucky to have him 4 years ago? Seems to me he has had 2 mass layoffs under his belt, is he going to get any of the blame or is its just the snow??? In a way I think 
    you are better off paying shaman to dance for snow at 60K than a manager at 250K 
    Was your son among those that lost their jobs?
    Before laying people off did you consider 4 or 3 day work weeks or have cuts across the board to minimize its effects on the community?
    Have you consider working for much less like 50% of you normal pay until things got better?
    Last year was a record year in terms of snowfall and revenue what made you budget for an even higher number this year?

    • 2 March 2, 2012 at 6:33 pm #

      2 VPs were laid off, which is about the same ratio of regular employees. (20%)

      • ohandread March 2, 2012 at 6:38 pm #

        oh and read the articles and posts bro. Hours were cut down first for seasonals, then for hourly full time employees then 10% pay cuts across the board. Why would JR get laid off? He is responsible for building all the parks which would be a huge loss if we didn’t have somebody doing that. It’s not like he is getting paid as an consulting he actually works and is a needed even if he is an easy target to pick on.

    • 2 March 2, 2012 at 7:00 pm #

      2 VP’s (20% of the total)

  2. upthecreek March 1, 2012 at 5:46 pm #

    I don’t think the drought has anything to do with it.. I think this was just an excuse to do something that corporate wanted to do for years. Clean house.

    Sad for the poor sheeple that got the BOOT

    How is the weather in Balboa??? Rusty

    MM is out of control

    • Dave March 2, 2012 at 10:52 am #

      Of course the drought had A LOT to do with it! Are you serious?

      Not that I don’t agree with your point about corporate fueled greed wanting to downsize… they always look for an opportunity to downsize to maximize profit. The big issue is what they do with profits during BOOM years!! It goes straight out of our town and into Starwood coffers to fuel other projects and to pad invester’s portfolios.

      It’s bad management to leverage ski area based on receiving snow. You just CAN’T guarantee snow will fall.

      Any farmer or rancher will tell you – YOU HAVE TO SAVE $$ for the rainy days!! That’s conservative planning. And they should have had more of a reserve fund to at least LIMIT their layoffs, or offer some severance pay, at the minimum.

  3. dean March 1, 2012 at 5:50 pm #

    Hard times. My heart goes out to all of the families.

  4. enoughalready March 1, 2012 at 9:23 pm #

    Explain all you want Rusty. I do not think your words are worth much.

    “21 years ago, Mammoth Mountain went through what was called Black Monday – the layoff of 150 employees after a series of droughts.”

    So after just half a season of a slow snow year, on the heals of a record year and spewage of broken words and promises. Rusty MMSA CEO found no other solution than to axe 75 year round employees. “Those whose jobs were not directly related to the on mountain experience were listed for layoff.” Why the separation? Why the disconnect? Who are you kidding, Rusty? Those were your people. That have families, homes and lives that they built around their jobs. At your ski area! They are all “directly related”. “On mountain experience” is a nice way to say these employees could not directly snag money from your guests.

    Who could believe these numbers you pull out of the air. $40 to $45 million? Why such a loss? Did you bet on the weather? I sat thru a “safety meeting” one Saturday and was told that my hours would be cut because the Mountain had lost $2-$3 million dollars. When I pressed the situation and stated it could help look for their lost money, I was told that they did not lose it really, that they just over projected their monthly income. So they were crying over the loss of something they never even had and I (we) would have to pay for their mistake. Sounds kinda crazy. You bet it does. Thats how that mountain works. That was a topic for their weekly “safety” meetings for an on-hill employee.

    Rusty is not a self made man. He was groomed to be this CEO. He’s mommy and daddy bought him a ski area when they bailed out Dave in the 1990’s. Now he is employed by Starwood and has failed to meet their expectations. He is slashing and cutting and squirming. He could not build his World Class Resort. He could not be the “Employer of Choice” He could not be saved by the airport (with 4 flights a day). He has no idea what to do with June Mt. (other than threaten the town of June Lake when he does not get his way).
    Goes to Washington D.C. looking for handouts from the FAA to remodel the airport (that the town is going bankrupt over).
    Isn’t there somebody else out there that can do this job?
    Starwood, Is Rusty’s pink slip ready ?

    • Rob March 2, 2012 at 12:52 pm #

      enoughalready – wow that was one mean & nasty post.

      Rusty has always been a gentleman to me. Sometimes I think he’s damned if he does, and damned if he doesn’t. I know for a fact he’s always in the crosshairs.

      Times have changed a lot since Dave, it’s a lot harder to get anything done now days. I wouldn’t be the least bit surprised if that was part of Dave’s reason for retiring.

  5. Benett Kessler March 1, 2012 at 11:34 pm #

    For more info, here is Rusty Gregory’s post on the Mammoth Forum:

    Re: MMSA CEO cuts pay and expenses as skier visits drop
    by rusty » Thu Mar 01, 2012 5:23 pm

    Hi guys,

    Yesterday was an awful day. Instead of trying to answer your specific
    questions or comment on this thread, I’ll give you a short explanation of
    why we laid off 75 of 359 total year round employees with an average
    length of service of 10 years. This layoff is the most severe reduction in
    our work force since 1991 when 150 employees lost their jobs in what is
    now known as Black Monday.

    Yesterday’s layoffs are an extension of cost cutting that began on January
    1. With no snow on the horizon or on the ground, other than what our
    snowmaking crew had provided, and with 30% less revenue coming in each day
    than we expected, costs needed to be cut. First and foremost, we didn’t
    and won’t try to save money by cutting back on mountain or guest
    operations. You can count on us keeping all facilities open at Mammoth
    according to our normal winter schedule as long as there is sufficient
    snow to ski to those facilities. You can count on us operating all
    facilities through the spring break holidays when we close typically
    Canyon and Eagle. We will operate the primary lifts around Main Lodge to
    the top of the mountain for as long as the snow lasts up through the July
    4th holiday. You can count on us opening next year as soon as there is
    enough natural snow to ski Chair 1 or the first Thursday in November if we
    have to rely on manmade.

    Starting after the New Year holiday, we cut non employee expenses wherever
    we could and began reducing the hours of seasonal employees, cutting many
    to 0 hours. We then reduced our year round hourly employees significantly,
    in some cases down to 20 hours per week. We provided free meals at Canyon
    Lodge to keep our seasonal employees in town and help with expenses for
    our year rounder’s. We crossed our fingers for snow by mid-January. Snow
    finally came on January 21st, but unfortunately skiers and snowboarders
    did not – at least not in the numbers we expected or needed. Realizing
    this was no ordinary drought and that the market was not going to follow
    the patterns of the past, we cut more expenses by cutting year round
    salary employees pay 10% and I cut my pay 15%.

    It snowed a couple more feet right before the President’s Holiday and we
    had our first busy weekend with 16,500 visits on Saturday and 17,500 on
    Sunday, which was by far the best weekend all year although still less
    than typical 20,000 visits per day for this holiday. The following week
    visits trended back down to the season average and has stayed there ever
    since. If this trend continues and I see nothing on the horizon that
    indicated that it won’t, we will bring in $40,000 million less in revenue
    this year than last year’s total of $140 million. We simply don’t have
    enough money coming in to pay the expenses for the size year round staff
    we are carrying. Cutting seasonal employees further would require us to
    reduce operations and I WILL NOT DO THIS. Additionally, by March 15, we
    will be in breach of our loan covenants, which means that the bank will
    make us cut expenses aggressively. I decided to cut year round jobs. I
    believe that if I didn’t act yesterday that I would be causing many more
    job losses later this year. I learned this painful lesson in our slow
    response to the circumstances that led to Black Monday and the layoff of
    150 employees referenced above. This is no one else’s decision other than
    mine. Barry Sternlicht didn’t tell me to do this. Neither he nor any of
    our other partners has told me to do anything. They remain supportive
    solid partners and friends.

    Monthly revenue is running $10 million less than last year. I had 5 days
    of meetings with my top managers to figure out which year round jobs to
    eliminate in order to save $500,000 per month. We did our best to cut jobs
    that would not directly impact the day to day operations of the mountain
    or guest services. Management and higher paid jobs in administration, IT,
    accounting, and maintenance took the biggest hit. 2 VP’s were let go. I
    delivered the news personally to the 10 employees with the longest tenure
    with the company, from 28 to 44 years. I am still crying. But my pain is
    nothing compared to the pain and hardship I have burdened 75 top
    performing, long time employees and their families with.

    The majority of the 150 employees who were let go on Black Monday in 1991
    were rehired by the company within 1 year. I hope and pray that this will
    be the case again. Because I know you Forumites care about our people and
    like to know the details I have included the letter that each laid off
    employee received.


    • PoundSand March 2, 2012 at 9:34 am #

      Come on Rusty, have you bought a lift ticket at Mammoth, eaten and drank on the Mountain. WAY OVERPRICED buddy so like econ 101, nobody is buying. Most people don’t have salaries like you do and most of my buddies don’t either.
      I have one request and I do hope you honor this, PLEASE PLEASE PLEASE don’t ask for a bailout from the taxpayer cause I don’t want to fund your failing business model.

  6. jose chavez March 2, 2012 at 7:09 am #

    blame the weather if you want, i blame over priced ticket sales and higher food cost. oh, and poor management. mammoth used to be a winter destination everyone would want to visit, now most people dont want to go for their own reasons. thru the years, new buildings and remodeled chairlifts have come about. but in all the mountain has remained pretty much the same. too bad management did not stay with the same old school values it once had.

  7. Friar Tuck March 2, 2012 at 8:43 am #

    Top Ten Reasons Mountain Mountain and town are now failing.

    10. The vision for both entities are based on the greed factors instead of the need factors.

    9. The business community is ripping off the town coffers by under reporting sales income by the millions.

    8. The tax base funds many subsidies in various forms for the benefit of the businesses owners. This results sometimes in the lack of funds for programs that serve the non business community. A balance between the two competing needs and interest is essential for a vibrant community.

    7. The wages are so low by most employers, a paycheck to paycheck lifestyle has become the norm for the majority of locals and transient workers alike.

    6. The political arena is not conducive for the truly talented to offer up their services for the betterment of the community. The backdoor deals is a way of life in this community and a major pitfall to achieving anything of substance that doesn’t revolve around a profit for those who wield the real power in this community.

    5. We get the leaders of the community that we deserve. The disconnect by many citizens for whatever reasons is a large factor why the town is run like a fiefdom by the business interest with one thing in mind.

    4. The dependance on the tourist industry for survival is successful when based on the value perception of the current customers. The targeting of the another customer demographic at the expense of the existing base will usually lead to failure.

    3. Pricing and not delivering a good value from the current customers point view will eventually become the “word” on the street that a business depends on for customer loyalty. When you loose the loyalty of the people who made you successful, be it customers, employees, vendors or financiers, it’s just a matter of time till you reap your comeuppance

    2. Alienating the largest growing demographic by chasing the same smaller percentage demographic as your competitors is a poor business plan. The tourist business is about disposable income and time, both are shrinking in todays economy. If you have the money you don’t have the time and vice a versa.

    1. When all else fails, evaluate, adjust and return to what works in the long run. The boom days are over in this town for many years to come. Not focusing on the long game is our largest failure. The instant gratification and greed mentality has destroyed what was once this communities charm, ” the goodness of it’s people “. Many honest ethical folks have picked up and left town because of the Carpetbaggers and Profiteers have destroyed the ambience of this town most likely forever unless they go broke and forced to leave too. I have my fingers crossed!

  8. Justmeagain March 2, 2012 at 10:57 am #

    The mountain is still to top heavy. What about the department heads who are collecting full time wages and putting in less than half their work hours. Are they now going to pick up the load of their staff that has been let go? I seriously doubt it. They will just manipulate the ones remaining with fear that they will be the next one to be let go. When are you really going to make the right cuts? You have employees that have other businesses or some that just spend their time on the internet (on company time). Rusty, do you rally know where your employees are, when they should be in their offices? Maybe you take away their Blackberry and their internet access, then call their extension and see who answers….Probably one of the work bees or not, now they have been laid off.

  9. upthecreek March 2, 2012 at 12:05 pm #

    So it looks like it is TRUE..
    MMSA is run by the Banksters.

    and my guess is Rusty will be spending a lot of this time in Balboa not Mammoth


  10. whoisreallytoblame March 3, 2012 at 1:56 am #

    Why does everybody blame Rusty? Why not who really benefited in this whole deal.. Simply follow the money. Dave McCoy “The Legend”. He was already wealthier then any of us will ever be. In his golden age when he had more then enough money to last him and his family the remainder of his days. He leveraged his legacy and sold it off to the highest bidder inflating the value and sucking in whomever would bite. Rusty, Starwood, and Intrawest all got wrapped up in the moment, they invested more money then they had, took out huge loans to buy out an old man and give him wealth beyond his means.

    What is the end result? A ski area and a community that depends on that ski area so heavily leveraged to the banks with investors having to bite at the bit and scratch and claw any way possible to try to appease the bank.

    Who ended up paying the price? All those people who bent there backs for people like Dave and Rusty to pursue there dreams and were the stepping stones for the very company that now casts them aside to keep a float.

    In this humble cowards opinion. If Dave McCoy wanted to stand as tall as the legends that are spoken of him he would buy the company back and give it to the people who helped built it. The employees and the members of this community. What good is 500-million to an old man? Seems to me he is happy enough with his rhino and a roll of film. In the end it all comes down to the $$$.

    You can blame Rusty, and the outside investors all you want. Call them greedy hounds, but the money that this Ski Area, and town needs is sitting in the bank account belonging to a living legend who resides in Bishop, CA not some corporation based out of LA who cares nothing about this community only the potential dollars it can extract.

    • whoisreallytoblame March 3, 2012 at 6:22 pm #

      Oh Look at all this hate. It’s easy to hate Barry Sternlich and big companies and Rusty but don’t dare say anything about Dave! I’m not saying he was malicious, but the facts are the facts. He didn’t give the company to his family, take it public, or sell it to another resort. It sold it to the highest bidder, and that’s what put us in the situation we are in. He didn’t need to sell it, he could have happy retired with what he had and passed it on. While still letting Rusty take the helm (as he did for many years before Dave left), or he could have held out and sold it to a buyer that didn’t need to take out a loan to purchase the company, but he didn’t.

      • enoughalready March 4, 2012 at 11:17 am #

        @whoisreallytoblame –
        What a great example of some body who really does not know what they are talking about. Get back out there and do some research. If you had half a clue it might have shown.

        • whoisreallytoblame March 4, 2012 at 12:25 pm #

          Oh? What’s 1 point that I am incorrect on? Due tell.

          • enoughalready March 5, 2012 at 5:34 pm #

            It hardly seems worth the effort to inform you, seeing that you seem to know it all anyways. But I’ll try.
            You are correct that Dave really did not have sell when he did. But he decided it was time to go. The Golden Era was over. Rusty had tainted the well.
            Dave had been there for about 50 years. It was his dream and he made it happen. He built it with friends and family. He built it with skiers for skiers. It was a great little ski area with a big mountain and a big name. It was a skiers mountain. Drought years and big snow years came and went. Hard times came and went too.
            Rusty returned in the late 80’s. He came back as Personel Director under Daves watch. (he had worked lift maintance prior and I’m sure something else too) Several low snow years had occured in the late 80’s early 90’s. Snowmaking was archiac at best until the new system went in (91-92?)(which is still archiac). Black Monday hit. Rusty had connections to the money that was bailing Dave out at that time. Basicaly Rusty went from Personel Director to CEO in a blink of the eye. Made many friends on the way up too (kidding). Rusty kept the squeeze on Dave. Rusty was the CEO and Dave the Owner/Operator of the Mammoth Corporation. Dave was hanging in there. He still skied but he was getting older. Some bad planning and investments with YAN (Lift Manufactures) had happened around this time too. In comes Interwest to save the day and the town too (mid to late 90’s).
            Sometime after 2001 Dave decided to sell off the rest of his shares. His kids were done with the ski area long ago. To hand it down was not an option. Dave knew it was worth some money because Rusty had told him so. Rusty knew it was going to be worth a lot more after his money people had their way it. Build the facade, make some changes, buy up as much land as possible around town, jack up the price of tickets. Talk about an airport and big development. Talk up your “World Class Resort” Invite more stakeholders to the party with your best smoke and mirrors.

            (here is where you are wrong “whoisreallytoblame”) Dave sold his shares because Rusty and his money people wanted total control. Daves dream was over (he achived legend status long before this time) Rusty and his money people negotiated the price. They negotiated. They, Rusty and his money people, (Starwood is not in the equation at this time) settled on a price and Rusty bought it. He paid the price that the parties agreed on. Then after a year or two Rusty saw an opportunity to profit from his new ski area and sold it to the next guy. Starwood. (Rusty is an employee of Starwood.) Don’t believe Rusty’s comments about not having to ask anybody and making these lay-off decisions on his own. He has to agree with and answer to his money people. He is not sole owner.

            This has nothing to do with Dave anymore. He is not involved . He is free to ride his Rhino all he wants. He sold what he needed and got out of there. He is and will always be the Man who made his dream come true. He built his dream on skiing. Skiing on a big mountain and having a whole lot of fun.

            When was Dave supposed to buy it back to make this all work out for Rusty???

          • whoisreallytoblame March 6, 2012 at 12:55 am #

            Won’t let me reply to you. So read up. I never said Dave was supposed to sell it back. I said it would be the noble thing to do. Clearly you read as well as you make up stories. Yes Dave sold @ the peak of the market and profited yes you bought in the whole “Dave kids” wanted nothing to do with it. His grand kids neither right? That’s why Casey still doesn’t work there, and Roma up until recently didn’t as well? This has everything to do with Dave and the position he put the mountain / town in when he choose to sell it when and how he did. Disagree all you want, but take the man of a pedestal for a little bit and trying looking at things from a logical approach and instead of so emotionally charged and you might see how things really played out as well. You can’t seem to let go of some silly conspiracy theory you have that “Rusty” ruined everything. I’m not by any means saying he help, however Dave put him that position and the two of them worked together set things in motion to how they played out today. To put the blame solely on Rusty and claim that somebody like Dave must have been hoodwinked by his charm as he never could have done any wrong is preposterous.

          • enoughalready March 6, 2012 at 12:56 pm #

            I tried.

  11. Jake March 3, 2012 at 6:00 pm #

    whoisreallytoblame If you believe that we should throw you in jail with Rusty the rip off man.

    So funny how Rusty has fooled all if you suck ups over the years. Next time I see hime drive by I am going to throw an egg at his car.

    • whoisreallytoblame March 4, 2012 at 10:25 am #

      Oh Jake, why is that? Follow the money. Bottom line is nobody forced Dave out. He sold the company off for as much money as he possibly could at the height of the market leaving the Ski Area in a huge debt. Like it or not, that’s the truth. I’m in no way implying that I agree with all or even any of the decisions Rusty has made over the years but he’s not the one that took out the big loan he to pay a kings ransom for the resort.

      So what do you disagree? That Dave was already wealthy? That he sold the company off to the highest bidder, when he didn’t need to? That when he sold the company the new people that bought it had to take out loans to pay Dave which put it in debt? That he currently has wealth beyond his means, That the most noble thing he could do would be to buy back the company at it’s current devalued rate with the money that he and his family could never spend in 10 generations and give it back to the people who built the company with him? Yes all these things I’m saying are SO terrible. I should be thrown in jail.

      • boywhite March 6, 2012 at 7:52 am #

        I find it hard to believe you were actually educated by our school system? Or maybe that is the problem! Sad………

      • Rob March 7, 2012 at 12:23 pm #

        I’m a firm believer that when Dave owned the mountain he could sell it in any manner he saw fit.

        Who is anyone to say what he should or shouldn’t have done.

        • Big AL March 7, 2012 at 4:52 pm #

          Yep Rob, I didn’t quite understand that twist on this story, except that it could have been to try to take the heat off of Rusty, not even a good try though.

  12. Harry March 7, 2012 at 10:58 pm #

    Dave is 90+, his kids were not interested in the Mountain (remember they sued him). What do you think if they inherited the Mountain? They would fight like cats and dogs for their share, not of the Mountain but sales price and individual profit. I believe that Dave did the correct thing for his family and the Mountain.

  13. Jds November 23, 2012 at 8:29 pm #

    Many memories of that day,remember the time ,come spring,everyone that lived there went on unemployment benifits,no work at all,in the summer,good times huh,i was a patrolman luckly working,shoveling snow into toboggans from the trees to a run ,pack it out then a skier would take it off ,oh well do it again,just lucky to have a job


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