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TS03 Inc Trust Units TSTIF



GREY:TSTIF - Post by User

Comment by Drrwongon Jan 29, 2018 11:50pm
262 Views
Post# 27459951

RE:Why would they get out?

RE:Why would they get out?Excellent question, as this is something I have been pondering in the last couple of days--just to make sure I am not missing something. Just like Echo mentioned, Getinge's results were not very good, especially in the Americas region. As with any company going through major reorganization/restructuring, management at various levels are hard pressed to show financial performance. This will include their US management team, and this is where I think the conflict comes in with the TSO3 deal. If you look back at my previous blogs, I believe Getinge does not make much profits from selling VP4s. The main reason Getinge wanted to sell VP4s is because it is a revolutionary product that could get their sales people into unopened customer doors. We must remember Getinge has been plagued by years of poor customer service and a consent decree in the US, so there are many "closed" doors. Once Getinge gets through the door, they can then try to cross-sell other Getinge products where they will make a lot more money Since Getinge is not making much profits from VP4, they are also not incentivizing their sales people to push VP4 sales. In fact, I have good reason to believe Getinge has not been paying sales commissions on VP4 sales until very recently (previously just a salary). Why? Because Getinge could theoretically be losing money on each VP4 sale after sales commissions, which will negatively affect their bottonline in the region. We all know it is common business practice to have "loss leaders" to attract new customers, but this is happening in a time where management is very hard pressed to make their numbers due to the ongoing restructuring. Looking at some of the comments made by the two user organizations at the TSO3 analyst day, it confirms all the positive attributes of the VP4--ease of use, cost reduction on a per equipment basis, sterilization of scopes, etc. Most importantly, these two organizations are voting with their feet--they are ordering an additional 12 VP4s. This leaves me to the conclusion that the only reason VP4 is off to a slow start is due to channel conflict at Getinge. I know this looks bad for RR, especially in light of the 3M deal that also fell apart under his watch. I hope I have laid out a credible and logical reason on why Getinge has been dragging their feet, and please feel free to add to my comments. At the end, if VP4 is something the end users love and need, it will find a way getting to them--either via Getinge, TSO3 or a new channel partner (or acquirer) like Cantel or JNJ...
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