TDG - Transdigm

[Astrea]

One red flag quote from the TDG reviews:

"They only care about money not people's lives on a commercial or even civilian business plane. The greed is so self infused they don't realize they are going to kill people flying."

[Shooter MacGavin]

thank you. 

one has to obviously consider the n=1 nature of that review and as previously stated, the self-selecting nature of unhappy people posting online. Even so, there are a decent number of disgruntled employees at TDG and a glassdoor review of 1.6 stars for the CEO (only 11 reviews), which is a little bit of a red flag.  I guess I'm going to proceed with caution, keep an eye on this one as a long but maybe look elsewhere for now. I really like the business model but management and culture is a big deal in my opinion.  There are some other acquisitive companies that better ratings on glassdoor.    Thanks for the feedback.

[cmlber]

thank you. 

one has to obviously consider the n=1 nature of that review and as previously stated, the self-selecting nature of unhappy people posting online. Even so, there are a decent number of disgruntled employees at TDG and a glassdoor review of 1.6 stars for the CEO (only 11 reviews), which is a little bit of a red flag.  I guess I'm going to proceed with caution, keep an eye on this one as a long but maybe look elsewhere for now. I really like the business model but management and culture is a big deal in my opinion.  There are some other acquisitive companies that better ratings on glassdoor.    Thanks for the feedback.

TDG is very open about their business strategy.  Buy companies running with too much SG&A who don't utilize their pricing power, fire most of the employees, raise prices, rinse and repeat.  It's not surprising that the bulk of the 11 reviews on glassdoor for a company with that strategy would be negative.

Ironically, if you look at their subsidiaries on glassdoor, the reviews are average, around 3 stars.  One of them even referenced how small the company is (as a positive).  The 11 people posting on glassdoor probably found out who Nick Howley was because they got let go and were told it was because they were acquired by Transdigm so they Googled the company. 

[SlowAppreciation]

just recently started kicking the tires on this name so I don't know it well.   Looking at it as a LONG.  Anyone been following the story for a while?  Do you get nervous with their acquire and fire culture?  It seems from their presentations that they make no bones about letting people go to make numbers.  I looked on glassdoor and their employees kind of confirm this.  Maybe that makes good business sense..I don't know.  The returns speak for themselves.  But aggressive cultures always make me a bit uneasy (Valeant anyone?).  Anyone  who's followed them for a while have any thoughts on their culture/their approach to acquisitions?   Thank you for your input.

Funny you say this, as I've been doing some work on TDG the past week and I actually highlighted the "Employees" section of their 10-k as it seemed very lukewarm to me:

TDG:

....We consider our relationship with our employees generally to be satisfactory.

So I then went to Glassdoor and came across the same reviews you posted. Who knows if it means anything, but it did catch my attention. For what it's worth, here's what a few companies I've been researching say in their 10-k about their employee relations:

FAST:

None of our employees is subject to a collective bargaining agreement and we have experienced no work stoppages. We believe our employee relations are good.

TTC:

The total number of employees as of October 31, 2016 was 6,329. We consider our employee relations to be good.

JBT:

We maintain good employee relations and have successfully concluded all of our recent negotiations without a work stoppage. However, we cannot predict the outcome of future contract negotiations.

Liberty Global:

We believe that our employee relations are good.

[AzCactus]

just recently started kicking the tires on this name so I don't know it well.   Looking at it as a LONG.  Anyone been following the story for a while?  Do you get nervous with their acquire and fire culture?  It seems from their presentations that they make no bones about letting people go to make numbers.  I looked on glassdoor and their employees kind of confirm this.  Maybe that makes good business sense..I don't know.  The returns speak for themselves.  But aggressive cultures always make me a bit uneasy (Valeant anyone?).  Anyone  who's followed them for a while have any thoughts on their culture/their approach to acquisitions?   Thank you for your input.

Funny you say this, as I've been doing some work on TDG the past week and I actually highlighted the "Employees" section of their 10-k as it seemed very lukewarm to me:

TDG:

....We consider our relationship with our employees generally to be satisfactory.

So I then went to Glassdoor and came across the same reviews you posted. Who knows if it means anything, but it did catch my attention. For what it's worth, here's what a few companies I've been researching say in their 10-k about their employee relations:

FAST:

None of our employees is subject to a collective bargaining agreement and we have experienced no work stoppages. We believe our employee relations are good.

TTC:

The total number of employees as of October 31, 2016 was 6,329. We consider our employee relations to be good.

JBT:

We maintain good employee relations and have successfully concluded all of our recent negotiations without a work stoppage. However, we cannot predict the outcome of future contract negotiations.

Liberty Global:

We believe that our employee relations are good.

I really wouldn't expect a company to say something to the contrary here. 

[SlowAppreciation]

Well that's my point. TDG DID say something different from any other 10k I've read as far as I can remember.

[Schwab711]

TDG has used the same wording since at least 2006. I searched EDGAR and at least Ford, Toyota, American Tower, and Seritage use identical wording.

[cmlber]

Well that's my point. TDG DID say something different from any other 10k I've read as far as I can remember.

Go on Thesaurus.com and type in "good," "satisfactory" is a synonym...

[SlowAppreciation]

Well that's my point. TDG DID say something different from any other 10k I've read as far as I can remember.

Go on Thesaurus.com and type in "good," "satisfactory" is a synonym...

Like I said, probably didn't mean anything but it just read more cautiously than other 10ks.

And yes, it's a synonym but they are not of the same degree. I'd rather receive a "good" grade on a test than a "satisfactory" one

[Astrea]

I agree, these are heavily lawyered documents. May seem template but there are nuances. No alarm bells though with the use of satisfactory.