Skinflint's City Diary
There is no doubt that Peter Walker's appointment to the Department of Trade and Industry will be readily welcomed by industry. John Davies was simply not up to the job.
Business activity is now rising strongly, so it is said, and the most recent survey of capital investment is claimed by the hopeful to be encouraging. Peter Walker would be advised not to take the forecasts too seriously, since my own straw poll indicates the reverse. The outlook for employment in industry looks bleak, and capital investment, at any rate in the engineering industry must in the last month or two have fallen away drastically. There is not a single worthwhile machine tool company, unless it has developed outside the industry and into general engineering, that may be said to be still soundly based. Alfred Herbert, Archdales in Walker's own constituency, the big private company H. W. Ward and Co, Noble and Lund and most others are so short of orders that their futures are in peril. B. Elliott and Co., have retrenched and cut back once again to being mainly exporters, and fixed investment is being redirected into general manufacture. The American firm Kearney and Trecker have lost £450,000 and a half-interest has been sold sold to the small but brave W. E. Norton (Machine Tools) for £500,000. Nortons are going to have the utmost trouble obtaining enough orders to maintain production. The epitaph for Britain's machine tool trade is R.I.P. and investors who realise it first will lose least.
Let us hope that Peter Walker has some other ideas than entry into EEC for reversing the trend. I fear he will fail unless he gets back to the fundamentals — which are possibly some measure of protection and to see money is made cheaper; and thus investment in industry will be made more attractive than investment in government stock or, come to think of it, investment in the company knackers' work followed so enthusiastically by some of Walker's young admirers.
Bowater was made without telling Jim Slater of Slater Walker who has a big slab of Bowater shares. Slater was using the power these shares gave him to persuade Bowater to agree to bid for Slater's associate, Ralli International. Didn't someone at Trafalgar House speak to someone at Slater Walker? If they didn't it is not altogether a surprise. Jim Slater is known to love being overbid more than succeeding in a takeover when it is on his own account and to snatching a profit on the cheaply built up holding in the victim's shares.
Selling Bowater
In a disputed situation like this, with at least two bidders in the field and the prolonging of a decision for the clammy blessing of the ineffective Monopolies Commission it is a time for those with big holdings to sell Bowater's shares at the higher prices put on them by Trafalgar House. Slater will possibly sell his lump to Trafalgar subject to being released from his implicit support for Ralli who will doubtless be suitably recompensed.
For the small investor who likes taking his profits this is a good time to sell Bowater. The Trafalgar bid has effectively blocked Ralli's chances of a quick merger. Takeover by Trafalgar House, if, and when, it eventually occurs, will mean the liquidation of the newly created Trafalgar shares by institutions with large holdings of Trafalgar already in their portfolio. If the bid fails Trafalgar will probably come back—so be on the safe side and sell these too, 'if you have any, whilst they are supported.
Highway patrol
Egon, Ronay, the pocket-sized Hungarian emigre, in his Dun/op Guide to Hotels, Restaurants and Inns in Creat Britain and Ireland, published by Hutchinson at £1.80, makes the unsurprising discovery that motorway cafeteria facilities are appalling. Granada's cafeteria at Frankley is described as having the atmosphere of a "sad holiday camp." The Blue Boar Group on the M1 and Mobil's Burton West station on the M6 have a rough time from selfappointed investigator Ronay.
Granada have kindly old Lord Bernstein's watchful blue eye on theni continuously. A former child actor with the Rank Charm School, now an agelesS swinger and film producer, has been telling me of his lordship's tireless drive for efficiency in his Granada chain.
Bernstein apparently drove into a motorway service station where the service was off-hand, the attitude casual and the premises seedily run down. "Tell me," Bernstein commanded the attendant, "why are these signs and displays not la accordance with the firm's Standard Practice Instructions? Send the manager over to me — it's about time you people, realised that Granada will lose money you don't use the company's colours ape smarten yourselves up." A glimmer of pleasure appeared on the attendant's unhelpful face, looking at. Bernstein in the back of his Rolls Royce. "Well for a start push off, smartypants this ain't a Granada station!"
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