Archive for August, 2007

Far be it from me to tell John Tory what to do. On the other hand, as my former boss Robert Stanfield used to say, why offer a target when you don’t need to?

The leader of the Ontario Progressive Conservative Party may have fallen into the same trap as Stanfield did in the run-up to the 1974 federal election when Stanfield campaigned on price and income controls. Voters thought his policy was a great idea as long as it didn’t affect their wages, which, of course, it did. Pierre Trudeau made hay with his scoffing line, “Zap, you’re frozen,” and went on to win handily.

With a provincial election scheduled for October 10 John Tory had to deal with the same dilemma that confronts all Leaders of the Opposition. Do I come up with ideas, or do I just hammer away at government ineptitude?

He chose the honorable former route, as did Stanfield, but may live to rue the day he took a stand on extending funding to religious schools. A coalition called Working Families is already running TV ads showing teachers’ strikes and public protests they say were caused by similar PC policies in previous administrations.

If the past is prologue, we know what happens next.

Is there any reason to be cheerful about the sale of Stelco to U.S. Steel? Some would argue shareholder value has been enhanced and jobs saved. But 1,000 jobs have already been lost in the past year as the turnaround team whipped the place into sufficient shape for an auction.

That makes all four major Canadian steel companies sold off in the last 18 months to foreign buyers. Dofasco, IPSCO, Algoma and Stelco are all gone taking with them millions in government tax write offs over the years and, in the case of Algoma, two time-consuming court-ordered runs at salvation.

Steel is just the latest sector to perform in this mediocre way that, to me, makes two sad statements about Canadian business leaders:

• they lack management expertise to run competitive enterprises in a global environment;
• they’re frightened to bulk up and become acquirers, preferring instead to run things just well enough to attract a buyer from abroad.

The flip side of such second-rate performance is that too few CEOs are willing to take a chance beyond our borders. Canadian banks whine about the need to merge at home, a risk-free proposition if there ever was one, while the Royal Bank of Scotland aggressively expands around the world.

Sole exception to this endless season of lassitude is Dominic D’Alessandro of Manulife with his successful takeover of John Hancock. In the dozen years he’s been in charge, Manulife’s value has gone from $2 billion to $60 billion.

As for the so-called men of steel, they’re not good enough for scrap.

When I was researching the first book I ever wrote, The Moneyspinners published in 1983, some of the CEOs of the Big Five Banks didn’t know quite what to make of me. Russell Harrison of CIBC declined my interview requests with utter disdain. Others gave me hours of their time, and revealed their innermost thoughts. Rowland Cardwell Frazee, Chairman and CEO of the Royal Bank of Canada, was among the latter group. Frazee died on July 29. He was 86.

Frazee was the first of the chairmen I wrote about to invite me on his plane, a Lockheed Jetstar. I met him in Manhattan and we flew to Halifax, where he gave a speech, and then set out for Toronto. It was a wonderful opportunity to spend hours with my subject, tape recorder a-running.

Suddenly, the pilot’s voice boomed in the cabin: “There’s some pretty nice real estate coming up.” “Well, it’s either St. Andrew’s or St. Stephen,” said Frazee, speaking of the towns in New Brunswick where, respectively, he planned to retire and had been his boyhood home. As he pressed his nose against the window and gazed down at the sunlit coast, he could have been a boy again, winsomely yearning for the seaside he loved so much.

Frazee might have been tough in meetings, but he certainly showed his softer side to me at a time when bankers didn’t admit to such emotions. His leadership style was forged in the Second World War as a major battling up the boot of Italy. Raw recruits worried how they’d react when first fired upon. He empathized with them and tried to explain how it would be. As he recalled those conversations, he wept.

But of all the constituent parts of Rowlie Frazee’s life, nothing had a greater impact than his daughter, then in her late twenties. Born with muscular atrophy, Catherine never walked, but there was nothing wrong with her mind. She told her father about the environment and nuclear disarmament and why the bank should have better access for the disabled.

The two of them talked once about modern music. Rowlie complained how a recent concert in Montreal was nothing but dissonant, individual noises. Catherine had just attended a similar event in Halifax but had discovered understanding. She looked up, saw a jumble of wires, and decided, “The music was playing the ceiling.”

Rowland Frazee, banker with a social conscience, is listening even now and hearing that music with the ears of a man who spent his long life learning all the while. Few bankers of any era could say the same.