When Robert Bernstock was appointed to the newly created position of President (not Vice President, mind you) of Shipping and Mailing Services, the Postmaster General was enthusiastic: “Bob is a proven leader and particularly well prepared to help us meet the challenges ahead.” In particular, said Potter, “Bob has a proven record of building businesses and delivering revenue while driving down costs. His addition is a perfect complement to the strong team that’s already in place. Bob’s commitment to excellence will allow us to build on the record of service the nation’s postal customers have come to expect.”
He sounded like just the guy the USPS needed- the man described as “the savior” of the USPS’s retail business by an unnamed witness in the recent OIG report on Bernstock’s misuse of postal funds and employees. But what was it about his track record that led the PMG to welcome him so enthusiastically, and. as we know now, bend rules and skirt laws to keep him happy?
Here’s a Bob Bernstock timeline- see if you can figure out why he was supposed to be the savior of the US Postal Service:
1985: Bernstock joins Campbell Soup as Director of Marketing for Frozen Foods
1988: General Manager of Swanson Frozen Foods
1989: General Manager of the Soup Business Sector
1990: Sector Vice President – Soup, for the North and South America Division
1992: President and Chief Executive Officer of Campbell Soup Company Ltd. in Canada
1994: Bernstock named President of Campbell’s new International Grocery Division
At this point Bernstock was seen as a possible successor for Campbell’s Chairman and CEO, David W. Johnson. But in May, 1995, a new player came on the scene: Dale F. Morrison, a Pepsico executive, was hired as President of Campbell’s Pepperidge Farm division. Morrison’s performance at Pepperidge Farm earned him a promotion in November 1996 to the post of President, Campbell International and Specialty Foods. Morrison was now seen as Bernstock’s chief rival in the competition to succeed Johnson. The press release announcing Morrison’s promotion seems to foreshadow the eventual winner:
“In just 18 months as President of Pepperidge Farm, Dale Morrison has demonstrated outstanding leadership and strategic thinking ability. He and his team have transformed Pepperidge Farm into a model for our `Best in Show’ goals. Dale’s proven track record in the food industry and his general management of international businesses give him the tools to meet the challenges of expanding Campbell’s array of brands into new global markets and distribution channels,” Johnson said.
“Bob Bernstock’s strong leadership of U.S. Grocery continues his long record of winning performances at Campbell as President — U.S. Soup, President — Campbell Canada and President — International Grocery. U.S. Grocery is the Company’s `engine’ for cash and profit growth reflecting brand power in core competencies like soup, sauce and juice. Bob’s challenge is to build market share for heat-processed brands in the world’s greatest consumer market — the United States,” Johnson said.
In other words, Morrison’s a star, while Bernstock has work to do…
July 1997: Campbell’s names Morrison, not Bernstock, as its new CEO. Dow Jones suggests Bernstock may be a problem for Morrison: “Especially tricky, observers say, will be winning the support of Campbell’s U.S. grocery President Robert F. Bernstock, a longtime company man who was widely considered Morrison’s chief rival for the CEO post.”
September 1997: Morrison solves his “Bernstock problem”: Campbell announces that it will “spin off” its Vlasic Pickle operation as a separate corporation, with Bernstock also “spun off” as the new company’s CEO. The Associated Press reported that “analysts were skeptical about the new company’s prospects. Prudential Securities analyst John McMillin characterized it as “Campbell playing a game of gin rummy – getting rid of their losers.”
March 1998: Vlasic Foods International is born, with Bernstock as CEO. He says “Vlasic Foods International has a strong portfolio of businesses and icon brands. Approximately 70 percent of our sales come from businesses in which we are the market leader, providing a superb foundation for building a growth-oriented company. Our dedicated management team is focused on the vast opportunities within these businesses and delivering superior shareowner returns.” Vlasic shares open at $25.31.
May 1998: Vlasic says earnings will be less than expected, partly due to weak Swanson and Vlasic pickle sales. According to Reuters: “… while analysts described the abrupt change in 1998 expectations as “pretty ugly,” they also said it was only the latest in a series of downward adjustments for Vlasic. “This is about the fifth time we’ve had to lower our numbers on Vlasic, and the company’s been public for barely that many weeks,” said Prudential Securities’ John McMillin.” Shares drop to $24.50.
September 1998: Vlasic announces a fourth quarter loss of $24 million. Shares drop to $15.12.
April 1999: Citing disappointing sales performance, analysts downgrade their ratings of Vlasic stock- shares are now worth $10.81.
September 1999: Vlasic’s fiscal year produces a loss of $126.3 million. By fall, its shares are down to $7.00.
February 2000: According to Reuters, Vlasic is “seeking ways to better manage the company and warned that investors can expect sour sales in fiscal 2000 as well as a loss for the second quarter”. The stock closes at $4.00.
June 2000: Vlasic announces more losses, as analysts doubt that it can survive. Shares trade for around $2.00.
January 2001: Vlasic announces the resignation of CEO Robert Bernstock. Vlasic shares are worth 34 cents. At the end of the month the company files for Chapter 11 bankruptcy. Meanwhile, Bernstock is announced as the new CEO of Atlas Commerce, which describes itself as “the leading provider of Internet business applications for private eHubs”. Knight Ridder summarized Vlasic’s downfall:
The company was done in by a host of issues, including repeated failures to deliver on promises to Wall Street and questionable management decisions at a time when the company had no margin for error.
The underlying problem was that Robert F. Bernstock, the widely admired Campbell veteran picked to head Vlasic, tried to expand it aggressively. Vlasic was in no position to grow because of its high debt and lackluster businesses, food-industry analysts say.
But heading a modestly sized company and building it conservatively was never Bernstock’s intention.
When the spin-off was announced in September 1997, Bernstock beamed with excitement at his chance to lead “a global company anchored by such strong brands as Vlasic and Swanson.”
At the time, it would have been hard to envision the exasperated shareholder who confronted Bernstock last month at Vlasic’s annual meeting, saying: “You don’t seem to have the zest. You don’t have a positive attitude.”
Bernstock had no response to the shareholder. He resigned on Jan. 10 and is now chief executive officer of a software firm in Malvern. He declined to be interviewed for this article.
Bernstock is sued by investors who claimed he and CFO Mitchell Goldstein had misled them about the companies prospects. The suit is eventually dismissed.
December 2001: Bernstock’s tenure as CEO at Atlas Commerce ends as the company is acquired by Verticalnet
September 2002: Bernstock resurfaces as “Senior Vice President & General Manager, with responsibility for Air Fresheners, Food Products and Branded Commercial Markets” for Dial Corporation.
May 2003: Bernstock leaves Dial to become Executive Vice President, President, North American Consumer, for Scott’s, the lawn and garden company.
August 2005: Bernstock is promoted to Chief Operating Officer for Scott’s.
September 2006: Scott’s announces that Bernstock is leaving the company. The company’s CEO says his departure is due to “differing views on long-term strategy and the need to reinvigorate the culture of the North American organization… it is impossible to succeed without alignment on both long-term strategy and culture.” Bernstock receives a $2.2 million lump sum payment from the company. He is not replaced, as the company announces it is discontinuing the position he held.
July 2008: Postmaster General Jack Potter announces Bernstock’s appointment to the newly created position of President, Shipping and Mailing Services Division. The Chicago Tribune quotes Potter as saying that one of Bernstock’s advantages is that he “is not shackled with a mail background, allowing him to bring an outside business perspective to the agency”.
Based on the history, it would seem that Bernstock had a solid career at Campbell’s, but didn’t make the grade when it came time to fill the top job. His stint as CEO, at Vlasic, was an unmitigated disaster. He followed that with short, undistinguished stays at small companies, finally ending up at Scott’s, where he made it to COO, but was obviously not seen as part of the company’s future, and was let go.
So why was Bob Bernstock seen as the man to save the USPS?