More from Rusty Gregory

rustyMammoth Mountain CEO Rusty Gregory’s post on the Mammoth Forum reveals still more about Wednesday’s layoff of 75 year-round employees, including his own emotional response.  His post includes a link to the letter that all employees received:

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.

Rusty

rusty
MMSA CEO
 

9 Responses to More from Rusty Gregory

  1. upthecreek March 2, 2012 at 1:07 pm #

    @ Rusty

    “Additionally, by March 15, we will be in breach of our loan covenants, which means that the bank will make us cut expenses aggressively”

    There you have it.. the problem with MMSA and the Town of Mammoth lakes.

    Run by a bunch of Banksters

    GGW

     
    • truthbtold March 2, 2012 at 7:02 pm #

      @up the creek

      Your daily sarcastic remarks seem less and less important each day. If you had some balance, maybe bloggers would take you more seriously…

       
  2. PoundSand March 2, 2012 at 1:23 pm #

    Rusty how much have you borrowed from the banks? It seems after a record year there would be enough to weather a bad season, after all droughts do happen. From I have been told your budget for 11/12 was higher than the previous year. What made you think this would be even a better season?
    You have mentioned how its very painful to lay people off, but have laid off anyone in your inner circle (SMG’s)? Looks to me that the highest group of people who make high level decisions should be the first to go.

     
  3. TAKE A VOTE March 2, 2012 at 1:48 pm #

    Should Rusty go or should he stay? Thumbs up to stay or Thumbs down he goes.

     
  4. jose chavez March 2, 2012 at 7:18 pm #

    my family and i were around in ’91 for those layoffs. difficult times, the fire dept handed out food baskets so that many low income families could survive. nevertheles, local families stuck together and managed to pull thru. everyone here would llove a big fish to go under, unfourtunately, it probably wont happen. Rusty Gregory has shown good character by manageing this difficult situation with what he has, alot of employees, some snow, not enough turist. the problem is not the lack of snow or the lack of visitors. it is the high ticket sales, high cost of rentals, and high meal prices. for a town whose major source of income is tourism, they sure dont do a very good job of of tending to them. from a ;awsuit against the town, to the current status of the mountain, good luck to you up there. wish i can say i’ll see you soon, mammoth, i’ll see you when i can afford to visit.

    jose chavez

     
  5. Terry March 3, 2012 at 12:27 am #

    Have you taken more than the 15% pay cut that you took when you gave me a 10% pay cut? As I have taken a 100% pay cut, Go on match me, You can afford it more than me, People matter, Performance matters. your mantras. I did both, do whats best for the company I love and no longer work for.
    I miss the place and the people that do the work.
    Terry

     
  6. Ken Warner March 5, 2012 at 10:32 am #

    Here’s an OpEd from 2005 when Starwood bought most of MMSA.

    http://articles.latimes.com/2005/oct/09/opinion/op-mammoth9

    “CAN YOU HEAR IT? That’s the sound of the fat lady singing. She’s up at Mammoth Lakes, Calif., announcing the denouement of a set-piece performance that seems so completely, well … expected.

    Mammoth Lakes is the latest in a string of authentic, unique mountain communities that are being commodified, standardized and gentrified by corporations that see a chance to make a killing. And kill it they do.”

    “True, ski-area attendance has risen a bit in the last few years, thanks to good snow and regional price wars. But the heady growth of the 1960s and ’70s is past. Starwood Capital Group’s chief executive, Barry S. Sternlicht, knows this. And he probably couldn’t care less.

    He didn’t really buy ski runs and lifts, although his company will operate Mammoth Mountain. He bought the chance to sell a great deal of expensive real estate fluffed up with what marketers call mountain lifestyle. The property his company now controls is made valuable by virtue of its proximity to extraordinary public lands in the Eastern Sierra. That’s the game now in places such as Mammoth Lakes.”

    ————

    And so we have it…..

     
    • upthecreek March 5, 2012 at 3:05 pm #

      “$365 million for control of Mammoth Mountain Ski Area”

      So tell me… How much does a condo/apartment sell for in the Village? Now

      MGW

       
  7. Trouble March 5, 2012 at 8:08 pm #

    Sounds like they are on the same path as the Dodgers owner. Scream bankruptcies then walk away filthy rich. Time will tell.

     

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