High-flying hubris, Terry Hall

Battle of the Titans: Sir Ronald Trotter, Hugh Fletcher and the Rise and Fall of Fletcher Challenge
Bruce Wallace
Penguin, $34.95,
ISBN 014100472X

Bruce Wallace was in an excellent position to write a book that exhaustively chronicles the history of Fletcher Challenge, and backgrounds the immense ambition of its founders, Sir Ron Trotter and Hugh Fletcher, to form a New Zealand-based corporate giant. Wallace spent seven years working for the company’s corporate office as a high-profile executive dealing with image and public relations issues. By his own account, the Fletcher way of doing things was to encourage social interaction over a few drinks in executive offices. As a result, endless stories, views, gossip – and a lot of accurate history – must have been exchanged.

To anyone with a journalistic background – as Wallace had – this must have presented a wonderful opportunity to get the inside story of a company that during his time there (in the late 1980s and early 1990s) was at the height of its power. After his return to television, friendships forged during his FCL days, coupled with the interest one always holds in firms one has worked for, would have ensured that he continued to be unusually closely acquainted with what was happening to the company during its last painful years.

The Wallace writing style – plenty of quotes – is explained by his background in broadcasting. Both radio and television love live “soundbites”. To a considerable extent, he has invented many conversations in an attempt to enliven the text. This has led to some criticism (though not from journalists) from people who say they were irritated by the use of direct quotes in this manner. One broker said to me: “How could Wallace know precisely what Ron (Trotter) said to Hugh at that point?”

Publicity and other reviews have tended to characterise the book as “lifting the lid” on the last days of Fletcher Challenge. While it does cover this period, to me that is one of the more disappointing parts. Facts are crammed together in the company’s final countdown.

I also feel more could have been drawn from the clash of personalities and ideologies during this brief and remarkable period that followed the sensational removal of Kerry Hoggard as chairman. This catapulted Roderick Deane into the chairmanship, giving him a clear majority among the remaining tiny number of like-minded directors who were prepared to forge ahead with breaking up the once proud company.

This period was fairly well documented by the media. However, the book doesn’t seem to contain any startling new information about it for the many people (myself included) who have followed the Fletcher Challenge story for so long. This dramatic last-gasp period, following the demise of the power base of Hugh Fletcher, and before that Sir Ron Trotter, is worthy of a book on its own when the dust settles further.

Battle of the Titans remains remarkably up to date. Its real value lies in spelling out some of the many problems the group encountered. This includes the personality clashes between Fletcher and Trotter that plagued its later years and its ongoing battles to control debt in a difficult global environment. Fletcher Challenge was unlucky in a way that its rival Brierley Investments was not. Both Trotter and Fletcher were men of vision and wanted to create a great international company from a New Zealand base. They hired the best business brains the country could find, took risks and made mistakes that they seemed willing to acknowledge. It was not to be, and Wallace places much of the blame on Fletcher.

This book is important because it collects much of the country’s corporate history in a single accessible place. It has provided a fascinating read for someone like me, who reported most (if not all) the events it describes for Reuters, The Dominion and overseas publications. The first 200 pages (out of 250) contain much new information that I’d love to have known at the time – such as a proposal for Fletcher Challenge to buy the National Bank of New Zealand to add to its stable of finance companies that included Broadbank and the Rural Bank. The “what might have been” attempt to buy Telecom is also chronicled: Fletchers were invited to join the successful US bid for this company, but didn’t realise its full value. Joining would have changed history by providing a cash cow for Fletcher Challenge.

And I didn’t know till I read this book that a story I’d written for the Financial Times and The Australian about the group’s debt had caused panic within the company and a major international effort to reassure the world’s capital markets.

 

Terry Hall is a Wellington business journalist.