17/07/2007 - 22:00

Time and place a potent mix

17/07/2007 - 22:00


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Wrong place, wrong time.

How often has that happened to everyone, including Briefcase, which this week will explore four examples of the phenomena – starting with a brief encounter with the premier, Alan Carpenter.

It was about two months ago and Briefcase was passing an idle moment sipping a crisp New Zealand sauvignon blanc while gazing across the Swan River on a sunny day at Zafferano’s up-market noshery in the old Swan Brewery.

“You’re being paid too much, Briefcase,” said the premier, as he strode with minder in tow towards yet another boring lunchtime engagement.

“You’re in the wrong job,” was the retort from a relaxed and comfortable Briefcase.


Roll forward in time from that exchange of mutual taunts from a pair of ancient journalists and it’s pretty obvious that both were right.

Briefcase is enjoying the fruits of the resources boom (sauvignon blanc being his favourite), which is morphing delightfully into a media boom courtesy of internet publishing, while Mr Carpenter is having a thoroughly miserable time.

What the premier is discovering is that being in charge never brings pleasure; it merely brings responsibility for everything that goes wrong, and never a kind word for anything you do right.

Briefcase, having observed this fact close up 30 years ago, still marvels at the way people crave power. Perhaps it’s because they like bossing others, or perhaps they believe they will achieve some greater good for society.

In truth, all they get is a pain in the backside for a thankless job. Just ask Mr Carpenter, who is copping the blame for the mess in the education system, the staffing shortage in the police, the slow implosion of the state-run hospital system, the failure to stop Aboriginal men being beastly to women, and the failure to deliver enough natural gas to industry.

When appointed premier, Mr Carpenter would undoubtedly have believed he had reached the pinnacle of his working life. What he’s since discovered is that he has the job of trying to administer a state that’s running short of everything because of the resources boom, and his government is widely seen as a dead hand on the progress we could be making.

To Alan Carpenter goes the inaugural ‘Wrong Time’ award.


The second award in this series goes to the 600 unfortunate workers at Ford in Melbourne, who have discovered what we already know in the west – it’s hopeless trying to compete with Asia because the only way to make money in the modern world is to sell stuff to Asia.

This crystal clear message is why the resources sector is booming, and why manufacturing has become the sick man of the Australian economy.

For non-followers of events at Ford, here’s a potted history. Some time last week, Ford announced that it was thinking about importing V6 engines rather than make its traditional six cylinder engine in Australia.

The problem is complex but essentially Ford is going broke in the US because it makes the wrong type of cars for a fuel-conscious world, and it will cost too much to re-tool its Australian operations.


It’s at this point that we enter the world of silly suggestions. Among them is one from the prime minister-in-waiting, Kevin Rudd, who seems to be trying to mend a broken bridge to the union movement by saying: “I don’t want to be a prime minister of a country where we don’t make things any more, and making things means still having a viable automobile industry in Australia.”

What rubbish. Since when does making cars make a country rich, or smart.

What Mr Rudd, and the Neanderthals running the union movement, ought to recognise is that Australia must play to its strengths. That means maximising the profits from its resources sector, and ploughing the proceeds into the development of new technologies that leap across the natural advantage that Asia has – cheap people.

Clinging to this belief that making cars, or undertaking some other form of metal bashing is a noble craft that must be preserved at whatever cost is as futile as Canute demonstrated eons ago when proving that he couldn’t tell the tide to turn back.

The Ford workers are not only in the wrong place at the wrong time, they’re in the wrong jobs.

What they should be told is take your machine skills north, or west, and make twice as much by joining the resources boom.


The third example, which will take a little while to prove, is that of Melissa Karlson, daughter and heir of the late Bill Wyllie.

Last week, she gave her support, and a fistful of dollars, to the establishment of a private equity fund. In principle, there is nothing wrong with this; but the timing is awful.

Private equity is on the nose, and setting up a fund which attempts to pick winners from small firms that need capital can be a deadly game when asset values are at a peak.

Briefcase wishes Ms Karlson all the best but is concerned that her professional advisers are encouraging her to try and follow in Mr Wyllie’s footsteps.

Bill Wyllie was a one-off. Tough, uncompromising and a superb spotter of under-valued assets. He was a man in the right place at the right time.

From what has been reported, Ms Karlson will be relying on hired help to make the investment decisions using a private equity structure that is showing every sign of having passed its use-by date.


The fourth example is another crystal ball job. It involves Wesfarmers and Richard Goyder, who, unless he has a very large rabbit in his hat, is looking very much like a man in the wrong place at the wrong time as far as saving Coles from its own self-destruction is concerned.

If the deal proceeds, and there’s no guarantee that it will given the slide in the Wesfarmers share price, then Mr Goyder will be attempting to rewrite a number of records.

He will be trying to run a national business from Perth, something that never works; trying to run the biggest workforce in the country at a time when Australia is on the verge of wall-to-wall Labor governments and ascendant unions; and all without the private equity partners who walked away from Coles because the deal was too hard and too expensive.

Mr Goyder’s solution could be to get control of Coles, and then behave like an asset-stripper of old, selling the supermarkets to a foreign operator, and keeping a few plums for Wesfarmers such as Liquorland and OfficeWorks.

To try and do the lot could well be the undoing of Wesfarmers which, despite its self-belief, has tried grocery retailing before, and failed.

Not that anyone at the firm likes to talk too loudly these days about the Charlie Carters grocery chain, which Wesfarmers ran into the ground about 20 years ago.


“Nothing is so firmly believed as that which we least know.” Michel de Montaigne, 1595


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