Business View: Calling car dealers: this supermarket may need you

Click to follow
The Independent Online

Isn't America wonderful? This is a country where you get what you pay for. You give more than $100,000 to the campaign to re-elect the president, George Bush in this case, and you are rewarded with a plum ambassadorial posting. Ronald Spogli, an investment banker, gets Rome, while Robert Tuttle, a car dealer from Beverly Hills, makes do with London.

Isn't America wonderful? This is a country where you get what you pay for. You give more than $100,000 to the campaign to re-elect the president, George Bush in this case, and you are rewarded with a plum ambassadorial posting. Ronald Spogli, an investment banker, gets Rome, while Robert Tuttle, a car dealer from Beverly Hills, makes do with London.

With a motor trader at the court of St James, you begin to wonder what other jobs could be lined up for the grand skills of those who flog second-hand pink caddies. An American car dealer might have been able to palm off MG Rover as a going concern - something that was beyond the ability of some of the UK's best insolvency experts. Or maybe one could be put in charge of the rebuilding of Wembley. "Sure you can stage the FA Cup final here next May - never mind the odd loose brick."

Or we might get a car dealer to be the new chief executive of Wm Morrison. This is the company that only communicates by profit warnings - except last week's was not a warning, it was a "clarification". (Though if you are scything between 60 and 80 per cent off the consensus profit estimates, it does tend to look like a warning.)

As we report in the article on this page, after finally conceding that it needs genuinely strong and independent non-executive directors, Morrisons is having the devil's own job finding some. And given the choice, would you take the role? The company seems to have lost control of its costs, it does not seem to know how much money it is really making, and many in the City do not swallow the assertion that it has not run into some sort of trading difficulty.

The next task is to recruit a new chief executive. This is a fiendishly hard task as the group has been run like a family company since William Morrison first had a stall in a Bradford market.

To quote the White Stripes: "I've said it once before but it bears repeating". And I repeat: this company will not move forward until Sir Ken Morrison announces his retirement. The venerable chairman may have given up executive responsibilities, but he hangs over the place like a grumpy ghost. A new broom needs to attack the business and get to the root of what has gone wrong in the Safeway integration, and what was going right before Morrisons paid £2bn for Safeway.

It is not surprising that many of the shareholders still hold back from saying Sir Ken should go, given his formidable reputation. But he seems not to understand one or all of: the type of affluent customer Safeway could attract; the difficulty of trading from a range of different-size stores; or the south of England.

Morrisons needs a strong- minded, experienced and energetic food retailer to sort it out. Or a car dealer with $100,000.

The duck and the dragon

Another job for our wealthy car dealer could be chairman of the Royal Bank of Scotland. The natives on RBS's share register are starting to get nervous, having gained the belief that Sir George Matthewson would have named his successor by now. And the hope was that it was a successor who could keep the chief executive, Sir Fred Goodwin, in check.

Sir Fred is in the curious position of being disliked by the City despite having not really done anything wrong. He has shown himself to be a great buyer of banks and builder of businesses. Yet when he talked about taking a stake in a Chinese financial group, he was cut off at the knees.

Everyone thinks that Sir George is too close to Sir Fred, a bit like Paul Myners is seen as being too matey with Stuart Rose at Marks & Spencer. But the word in Edinburgh is that the close relationship may be getting strained.

Sir George is now in danger of becoming a lame-duck chairman. And the City wants someone who can tame a chief executive seen as a dragon.

j.nisse@independent.co.uk

Comments