EIGHTY-TWO YEAR OLD LEE IACOCCA STRIKES OUT
One of America’s great 20th Century industrial titans and personalities had some interesting things to say about the current economic mess we are in. Much of what he had to say was disparaging towards President Obama and the Democratic Party, but even after discounting those political comments, he was on the money about many things, one of them being; “Where have all the leaders gone?” he argues, “Name me an industry leader who is thinking creatively about how we can restore our competitive edge in manufacturing”.
It is sad we have an environment within American industry which almost matches that of Wall Street. Industrial leaders are all about the compensation package they receive and in order disguise that fact, it comes under the heading of stock holder value. Their remuneration is directly linked to the stock price and cutting costs. Not often, I look to my former homeland New Zealand as a beacon of commonsense and fair play, but I can recount a story of one of New Zealand’s most successful businessmen who also happens to be in the same industry as me.
Bruce Plested, founder of Mainfreight (now in the USA after taking over Target Logistics) one of Australasia’s largest transport companies began his career working for Brambles, a large Australian conglomerate. He rose to become Auckland branch manager of Brambles International. The forwarding industry in N.Z. in the seventies was continually being held to ransom by the labor unions. Bruce always settled the disputes ahead of his competition and when he was finally fired in 1978, it could be said his career in transportation should have been at an end. He had burned his bridges! Instead he partnered with former Bramble’s head storeman, Howard Smith and opened up on his own. Over the next twenty five years he swallowed up every one of his opposition to become one of the largest public companies in N.Z. Not only did he and Howard become multi-millionaires, but also many of his staff who came aboard during the eighties enjoyed huge financial reward when the company completed its IPO in 1996.
About four years ago in his annual report, as Chairman he restated his corporate objectives in order of priority; firstly staff would continue to benefit from the company ESOP, it would maintain the same levels of re-investment and above all Mainfreight would keep to its program of investing back into the local communities. His last consideration was to ensure after all this was accomplished, hopefully the company’s profits would continue to sustain a fair dividend yield for shareholders. The “Wall Street” of N.Z. and the media pilloried Bruce and told him these actions were destroying shareholder value and they would have no alternative but to place a sell recommendation on Mainfreight’s stock. Bruce’s response was the company’s prospectus upon going public in 1996 clearly stated these philosophies. Now the company’s revenue through exponential growth exceeded a $billion it was even more important not to lose those core ideals. He told those gathered at the AGM that if they did not agree, they were free to take the recommendation of their financial advisors and sell their stock.
My point in relating this story is Bruce Plested is a fearless leader. He proudly stands up for what he thinks is right. And he is right. Every major Australian or New Zealand competitor over the thirty years since he has built up his business has either folded or been swallowed up by Mainfreight. His belief in his people to always do the right thing for the company and for him to do the right thing by his people has created probably one of greatest success stories in N.Z. business. Funnily enough in spite of Bruce’s “unorthodox” attitude towards the financial world has worked to the benefit of all Mainfreight’s stockholders, as the company is still the darling of the N.Z. Stock Exchange.
America was once full of Bruce Plested’s, Lee Iococca being one of the better examples. Today, we need to see the return of leaders who will act in doing the right thing by America. It starts with bringing the plants back home and re-employing Americans. The Skilling’s, Embers, Kozlowskis, of this world who dominated the headlines because they were nothing but crooks are just the tip of the iceberg of the corporate world as I see it today. Most Fortune 500 CEO’s are self serving thieves who conduct business hiding behind a bunker. They cannot fail. If they get the boot, their golden parachute takes care of them for ten lifetimes; if they succeed, they earn more than they could spend in a hundred lifetimes. We need the return of true leaders to help rebuild industrial America. For starters maybe we should ask octogenarian Lee Iacocca to take over the reigns of General Motors! With former workmate Bob Lutz, (seventy seven and still Deputy Chairman of GM) the pair of them could restore Detroit back to being the industrial capital of the world!
