TAKEOVER/MERGER MANIA UNFORTUNATELY GETTING BACK TO NORMAL
When I became an investor (believe me, very small) in New Zealand listed companies in the seventies, the New Zealand Stock Exchange listed a hundred or so companies that represented local commerce from banking, retail, wholesale, auto wholesale/retail, manufacturing, export, forestry/timber, primary produce, fruit and vegetables, transportation, chemicals/pharmaceuticals, fishing to housing and food processing; in other words the full gamut of business activity. All were proud indigenous companies. Before leaving in the mid eighties, I remember the “Corporate Raider” of New Zealand, Ron Brierley, whose public company Brierley Investments Ltd. was basically a share trader and predator, claiming New Zealand will end up with only ten locally-owned companies worthy of stock exchange listing. At the time I disbelievingly thought, “Yeah, right!” Within fifteen years, how true his statement ended up being so right on the money. In fact he would have been more on the money had he said five and not ten. And Ron Brierley and his protégées using OPM (other peoples’ money) played a huge role stripping any N.Z. company of assets they could get their hands on. Industrial parts of N.Z. today resemble the rust belt of the Midwest. Where once productive factories thrived, a miniature Detroit now exists.
Mergers, acquisitions and bankruptcies (caused by asset stripping or over borrowing) have by 2009 led to about five New Zealand companies that provide any value in investing in. The remaining companies are a “hodge podge” of nefariously run outfits that would be lucky to be registered as “pink sheets” in New York! During this transition over the past twenty-five years to change the face of New Zealand from a primary and a worthy secondary industrial base to financial services has changed the country’s culture completely. Until they were shuttered, factories, especially in provincial towns were a huge employer of unskilled labor. As they closed down one by one, the social fabric of New Zealand went into huge decline. Today, violence in the streets is perpetrated by gangs of lawless, unemployable, unemployed thugs. It is rampant throughout the country and worse still, violence within the family units of the uneducated now dominant underclass is amongst the most horrific of all civilized countries.
With the first hand experience of witnessing the demise of the value system that had made N.Z. such a great country to live in, the opportunity for jobs for the unskilled workforce (not everyone can or wants to be a brain surgeon) and the exploitation of the lucky few who still have jobs has in so many ways changed the way of life for that country. Just as is the case with Mexico and the United States, some European countries are even warning young adventurous travelers to avoid visiting N.Z. because of the growing trend of tourists being randomly and viciously assaulted. Usually America being at the cutting edge of change is the first to experience the results of such change, but here is an example of a tiny country with barely four million people, who can vouch what the greed of the financial world has done to irrevocably change the face of society forever and can resultantly teach America a few simple facts of life.
How much profit does a company have to make and how much debt does a company need to accumulate to get bigger and bigger? Why do Private Equity firms, again using OPM, have to acquire for no other reason than to strip the once strong companies bare? After the raping and pillaging, through an IPO then sell them absolutely debt-ridden to pension funds, run in cohorts with the same dirt bags, who are also there for nothing but greed and avarice. What is wrong with Microsoft remaining Microsoft? Why does Oracle need to acquire Sun Microsystems? Why did Yellow Freight have to take over Roadway? CF, the largest of the three had already gone broke. Amazingly enough if CF had not been split in two, that wonderful pioneer of trucking would today still be in business only bigger and better. Presently Cadbury, for nearly two hundred years the greatest confectionery firm in the world (run until recently by the Quaker Cadbury family) will rue the day they got sucked into buying Snapple from a PE firm. Those rat bastards ended up with 3% of Cadbury, forced it to spin off the beverage business and have now engineered Kraft to take the company over. For what, I ask? The “merged” company probably shed thousands from its workforce, so the workers will be worse off; the shareholders will end up with a debt ridden entity; the chances are the size of a block of Cadbury’s chocolate will shrink thus also ripping off the consumer; but investment banker Nelson Peltz (head of the PE partnership) will make out like a bandit.
Takeover/merger mania helps maintain the rotten bastards on Wall Street and the City of London forever spilling over with shiploads of money. They couldn’t less about the real consequences of their actions. The simple fact is America is going the way of New Zealand. Society is being destroyed. I don’t want to hear President Obama talk anymore about education. There will always be the few achievers who will become doctors, scientists, CEO’s, geologists, politicians, lobbyists etc. The bulk of us only need or have the ability to handle the three “r’s”; reading, writing and ‘rithmetic. They just want to work an honest to goodness 40 hour week at being a productive member of society, just like the good ol’ days! Factories once housed those salt of the earth/heart beat of America types. Just think back to WW 2 and the huge contribution the generation of the depression made to not only America, but also to the world. Without GI Joe, Hitler and the Emporer of Japan would have carved up the globe between themselves. Look how GM and Ford at the flick of a switch stopped making cars and instantly converted their plants to making the best tanks and planes the world had ever seen. It was the factory worker, not the Harvard MBA, being paid a fair wage for a fair day’s work that gave America the greatest middle class the world has known. Where is it today? Decimated! Hey Barak, regulate the financial industry right now and stop talking about the stimulus plan unless you can prove to me, jobs are actually being “imported” back to America. I don’t need my roof littered with Chinese-made solar panels installed by cheap illegal immigrant labor. I want my Pontiac down to every last nut and bolt 100% made in America. And the last thing I want to see is a lawless America with the streets of every city filled with the unemployed becoming unemployable street violent thugs destroying what is left of our once great culture. Barack, pop down to N.Z. and you will see what I mean. We don’t deserve a society filled with the underclass and the social problems an underclass create, we want the middle class thriving and driving America forward once again.
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