United Conservers need a chief executive and have to ask the shareholders
CHRISTOPHER FILDES
These are dire days at Blue Water House, head office of that long-established British company, United Conservers. The results were disastrous, the prospect is daunting, the boardroom is split, the switchboard operator is snivelling into her mouthpiece and the managers are out to lunch. Belatedly, they now realise that great landmarks in the corporate scene can be eroded. If this sort of thing can happen to Marks & Spencer or British Telecom or Marconi. it can happen to them, too, and their company can join the 90 Per Cent Club, whose members (mostly dot.coms) have lost nine-tenths of their erstwhile value. At UC, the standard response to any crisis is a putsch. Loyalty has been described as the company's secret weapon. which is usually buried in the chief executive's back, but the most recent incumbent — a suit from McKinsey with a penchant for focus groups and bullet points — has left a poison pill behind him. He had the company's articles rewritten to ensure that his successor will be chosen by the shareholders. This has gone down badly at Blue Water House, where no one quite knows who the shareholders are or would think of consulting them on anything. In the company's heyday, the customary processes of consultation could be completed over lunch. Now the polling cards have been sent out to some 330,000 more or less elderly shareholders, not all of whom will survive the excitement. In this election, the swing vote may come from the cemetery, and the auditors will have a high old time before they certify the poll. Then the next chief executive will find that this is where the trouble starts.
Hard thinking
MARKETING is the issue. The former finance director who is one of the two candidates wants to move back into the middle of the High Street, where he would be among friends (they have been writing in to say so) and looks, indeed, just the type to be drafted as president of the Confederation of British Industry — a notorious Sell signal. He accuses his rival of cultivating niche markets, and his rival retorts that in the middle of the road you get run over. The High Street has not been a safe place for C&A or even Marks & Spencer. In a sense they are both of them right: UC needs a competitive edge in a mass market. Its story is a familiar one, of success leading to complacency, leading to introversion, leading to loss of touch and loss of nerve. Some now regard this company as doomed to be taken over or to have its best bits picked up cheaply from the liquidator, but it has a decent franchise, and I would back it to survive and even prosper, if it can raise its game. It is a long time since any hard thinking went on in Blue Water House.
Alan Thespian
ALAN GREENSPAN begins to look like Henry Irving in his seventeenth season at the Lyceum. It is a wonderful act, but we are used to it now, and the effect is wearing thin. Presiding over the Federal Reserve Board as it cut dollar interest rates for the seventh time this year, he was careful to leave himself room for an eighth in case this one fails to do the trick. When this drama was playing to full houses, eighteen months ago, it was thought to have a happy ending, and the great actor-manager encouraged us to think so. Putting his famous soliloquy on irrational exuberance behind him, he reeled off a splendid speech, explaining how the new technology was making everything different, and giving plenty of opportunity for capital investment. With a fine touch of dramatic irony, he had called the top of the market, and by a process that Aristotle would have identified as reversal and recognition, a different ending is now playing itself out.
Easy does it
I HOPE that Stelios Haji-Ioannou has not started to inhale his own publicity. This is always a bad sign. EasyJet, the cut-price airline which charges for drinks but is quick on the draw with the trolley, has made him famous, and I began to worry when he picked a fight with Barclays Bank (of all opponents) over landing rights at Luton. Then came easyeverything. his chain of Internet cafés, and here comes easymoney. In partnership with London Scottish, a finance house which, like its customers, is not in the first rank, he is going into the credit card business, in which Barclays is the market leader. Meanwhile his airline's most advertised customers, the Blairs — those weathervanes — have switched to Ryanair. Easycome, easygo.
Where the money went
THE BBC's idea of good news, as evinced in its one o'clock headlines this week, is that July has turned out to be a record month for mortgage lending. Jeff Randall, its newlyacquired business editor, still has some explaining to do to his colleagues. He might ask them whether they associate inflation with a surge in the money supply, or if that is too difficult, he could ask them where they think the money went Some will have gone to householders who have bumped up their mortgages and hurried out to spend the difference — July was a busy month for retail sales, too. Some will have gone to would-be householders, stretching themselves to get into the market, however late in the day. Some has been pushed out in the 'Buy to let' schemes which the lenders are promoting. Why settle, they ask, for one house and one mortgage? Borrow the money, buy another house and rent it out. Of course, you would have to find tenants who would behave themselves and pay the rent, but you could still be caught using borrowed money to finance two investments in a falling market, and even the BBC could not mistake that for good news. 1 still think you would be better off in the Ritz.
Happy for some
HAPPY BIRTHDAY is copyright, as a stiff note in the Wall Street Journal reminds us. Compressed in 1849 and registered in 1935, this harmless ditty would have been set free in nine years' time, but Congress has given it a 20-year extension, much to the benefit of its proprietors, AOL Time Warner. As their corporate lawyers chant:
Happy birthday to you — If you sing this, we'll sue, 'Cos we own all the rights to Happy Birthday to You.
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