Frank Esposito is one of three top executives who have departed recently from the management team at Global Motorsport Group (GMG), Dealernews has learned. Esposito, who joined Global as president in August 2002, was released from the Morgan Hill, Calif., distributor April 21, apparently as part of a corporate reorganization by the company's new owners.
GMG was purchased in March by Dae-Il USA, a subsidiary of Dae-Il Corp., the Korean company that produces GMG's RevTech engines, transmissions and clutches. The relationship between the companies stretches back to 1982. GMG was sold by Cerberus Capital Management LP, a New York-based international investment group. GMG was going through Chapter 11 bankruptcy reorganization at the time the sale was completed. The sale included all GMG U.S. operations, including its Custom Chrome, Motorcycle Stuff, and Jammer divisions, as well as its Custom Chrome Europe operations.
Esposito told Dealernews that he was terminated without notice for economic reasons and then escorted from the building immediately after the announcement. Esposito was told that his position was eliminated, said Esposito. Global CEO Nace Panzica is taking on the title of president, according to Esposito.
Panzica, one of the original founders of Custom Chrome, was not immediately available for comment; however, Steve Veltri, VP of sales and marketing at GMG, says Esposito was terminated due to a "duplication of responsibilities. With the addition of new and some existing employees/personnel, Frank's role as president of Custom Chrome would have been redundant," Veltri said.
Two other executives resigned from GMG within days of Esposito's departure. Maureen Shilling resigned as CFO of GMG, and John Alden resigned as the company's director of supply chain. Alden said changes under the new management caused him to leave the company. "It was not an environment I wanted to stay in," he said. "If Frank stayed, I would still be there. Under Frank's leadership, we had done a good job of turning around the company."
Veltri maintained that Alden's resignation "did not appear to be linked" to Esposito's departure. Regarding Shilling, Veltri said she left for "personal reasons" and decided to leave GMG "well before Frank was terminated."
Shilling confirmed that she gave her notice in March shortly after the sale and left the company May 2. She joined the company in February 2007.
While Shilling's departure was not linked directly to Esposito's departure, she said the two shared many of the same feelings about the new management team. "I knew two weeks after the sale that the culture would be different, and that I wouldn't fit in," she said. "It was clear to both Frank and I that it wouldn't work. But that's not unusual — it is a difficult place for management, following the sale of a business."
Shilling, who said she is taking the summer off, said the previous management team was close-knit group and was making strides toward turning the company around. "It's a success story," she said. "The employees still have jobs, and there is still a Custom Chrome; it's just under different management."
Esposito's sudden termination evidently came as a surprise. "I had been told, and continued to believe, that I would be part of the ongoing management of the company," he said.
GMG has struggled with inventory and cash shortages for many years, but Esposito this week still claimed those problems could be overcome. "The company can be rebuilt," he asserted, "but it won?t be easy. It can be done, but it would take another $10 million at least, over and above paying down vendors and over and above the purchase price." The increased investment required, according to Esposito, would be primarily needed to build up the company's inventory.