BREAKING NEWS: Nortek Reorganizes Its Reorganization

AVC GroupToday, just a short time ago, Nortek Inc.’s AVC Group released an announcement that a major new phase of their reorganization is in the works. Specifically, the AVC Group which currently is the merged brands of Niles Audio, Elan, and Xantech, will be expanded to include SpeakerCraft, Proficient, Panamax/Furman all under the same roof. Furthermore, Nortek’s former reorganizer – Mark Terry – has been reorganized out of the newly restructured company.

The news follows by just  two days the announcement that Jeremy Burkhardt will “retire” and leave the company – perhaps lifting the thin veil over the real reason for the former head of SpeakerCraft’s departure. The news on Burkhardt was generally a surprise to the industry – but sources inside of Nortek had made us aware of “more shoes to drop” in a continuing reorganization of Nortek brands.

Significant strategic move…
The company’s release stated that this announcement is of a “significant strategic move to address the rapidly changing needs of the technology consumers and dealers alike.”

The newly expanded organization will be headed by Bill Pollock, president of Panamax/Furman. Marketing functions will be handled by Paul Starkey and Dave Keller will head sales. Keith Marshall will lead SpeakerCraft/Proficient, as was announced after Burkhardt’s departure.

Thankfully, dealer support continues…
These changes are to take effect immediately and the company says no dealer contracts will be changed…and tech support and other dealer support functions will continue.

“Mark and his team have done an outstanding job combining the AVC Group brands together and creating a world class infrastructure to service our customers and dealers,” said Sean Burke, Group President of Nortek’s Technology Products Segment. Burke went on to wish Terry well in his new “endeavors.”

“This is far more than a strategic realignment,” added Bill Pollock. “It represents an important and historic step for our industry. We’ve joined the expertise and efficiency of the industry’s most important technology brands and formed a new resource for our dealers that represents a unique opportunity for them to grow both ROI and competitive standing.”

Insiders paint a picture of internal confusion…
Insiders tell us that there is confusion tantamount to pandemonium within operations. Little to none of this information has been announced internally and employees are left to try and divine just what this means for day-to-day operations. In some cases, basic functions such as basic order entry are not running smoothly.

One insider told us that for the sake of efficiency, customer- and dealer-friendly policies are being thrown out the window. Apparently there is constant debate internally about how to integrate these companies and policies.

Clarke asserting himself…
This new round of changes is said to be the result of new CEO Michael Clarke asserting a new direction in driving the company to more efficient and profitable operations. We have heard that Clarke is bringing in “his people” to execute dramatic change. Perhaps not surprisingly, there is a lot of internal confusion and strife as a result.

We keep hearing from multiple sources that there is more to come as this integration continues to unfold. As we reported recently, the TECH division at Nortek has been an under-performer and therefore getting its fair share of attention from upper management.

It’ll be interesting to see how far Nortek will go in trying to squeeze out efficiency and whether dealers will go along with these many changes.

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