Lord Hanson

Archetype of the Thatcherite tycoon
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The Independent Online

James Hanson was one of Britain's leading businessmen and the very archetype of the Thatcherite tycoon. During the 1970s and 1980s, he and his partner Gordon (later Lord) White became famous for the way their group took over badly managed groups and removed all the dead wood, including major assets.

James Edward Hanson, businessman: born Huddersfield, Yorkshire 20 January 1922; chairman, Hanson Transport Group 1965-96; chairman, Hanson Plc 1965-97, chairman emeritus 1998-2004; chairman, Trident Television 1972-76, 1984-85; Kt 1976; created 1983 Baron Hanson; married 1959 Geraldine Kaelin (died 2004; two sons, one stepdaughter); died Winterbourne, Berkshire 1 November 2004.

James Hanson was one of Britain's leading businessmen and the very archetype of the Thatcherite tycoon. During the 1970s and 1980s, he and his partner Gordon (later Lord) White became famous for the way their group took over badly managed groups and removed all the dead wood, including major assets.

They were often accused of "asset-stripping" but in reality, their policy consisted of squeezing as much profit as possible out of the assets they had acquired, having sold off those which they deemed irrelevant. They were so successful that Hanson was the first British businessman to earn over £1m a year and he was once described as "Europe's most potent capitalist".

James Hanson was born in Huddersfield in 1922, the elder son of Bob Hanson, a Yorkshireman of enormous drive who worked until he was 82, and whose business methods were reckoned as pretty rough even by the loose standards prevailing in the inter-war years. James Hanson took after his father in his drive, his ruthlessness, his ambition (he always wanted to be rich and to have a title) and what he called his "terrible temper". Long-term associates learnt to cope with the temper, knowing that outbreaks of ferocity would usually be followed by a return to friendship and support. Both father and son gave their subordinates considerable freedom to run their own businesses, albeit within strict financial guidelines.

Hanson had a chequered school career. He enjoyed his time at Elland Grammar School in Leeds but was too ill to go to Uppingham, a major public school, and had an unhappy stay at a much less distinguished establishment called Merlegh, now long closed. His first job was as a trainee accountant, but the Second World War broke out soon after he had started work and while still only 17 he joined a local territorial regiment, the 7th Battalion, the Duke of Wellington's Regiment.

Astonishingly, for those who only knew the active, upright figure of later years, he remained relatively weak, partly because his height had shot up from 5ft 8in to 6ft 4in between the ages of 16 and 21. So, much to his chagrin, he was forced to become a staff officer.

His most formative experience came when he joined the Army Broadcasting service in Athens with a reputation as an expert in swing music. Nearly 40 years later, this taste - what he called "relentlessly middle-brow" - found an outlet when he set up Melody Radio, a station based on what he termed "easy listening". Hanson's major artistic interest was photography and he once had a photograph published in Life magazine.

In 1948, the family's road haulage business was nationalised and James and his younger brother Bill decamped to Canada, partly to get away from the prevailing business environment but more importantly to escape from a domineering father. James Hanson stayed there on and off for 14 years, for some time in the shadow of Bill, a glamorous figure who had spent much of the war in secret warfare and had become the youngest major in the history of the British Army. James admitted that while they were both working in Canada, "Bill had all the ideas. I was a good organiser."

But in 1952 Bill Hanson died suddenly, leaving his family devastated. For James the only consolation was teaming up with Gordon White, his brother's best friend from their days together in the Army. From then on, until White's death in 1995, the two were inseparable and formed one of the most formidable partnerships in the history of British business. "We're twins really," Hanson said. Hanson and White had complementary personalities. As White once put it: "If he were climbing a mountain, James would follow the footpath. I would look for a short cut."

"I don't have his flair for spotting winners," Hanson once said. "He's the one responsible for the creative side" - a repetition of the relationship he had had with Bill. But their first years together were devoted to social - or rather sexual - rather than business success. In the 1950s, Hanson and White became famous for squiring some very desirable women. Hanson dated Jean Simmons and became engaged to Audrey Hepburn, but Hepburn (or, according to Hanson, her producers) decided that her career was more important than marriage to someone who was decidedly patriarchal in his attitude towards women.

Another engagement, to an heiress called Evelyn Bates, also failed to end in marriage but in 1959 Hanson married Geraldine Kaelin, an American divorcee (who died of leukaemia earlier this year). The marriage produced two children, one of whom, Robert, became a director of his father's group. Marriage revolutionised Hanson's private life - he even gave up hunting because his new wife was not interested.

In the early 1960s, Hanson and White returned to Britain. But their first efforts were hampered by the fact that bank managers were decidedly reluctant to lend serious sums of money to a private company. So, like many other ambitious entrepreneurs since then, they obtained a stock market quotation through a "reverse takeover" - i.e. selling their own businesses and thus acquiring a controlling stake in Wiles Group, which was already quoted. This was one of the many satellites of Jim Slater's financial empire of the late 1960s and early 1970s. In 1968 the company was renamed Hanson Trust and the couple were on their way as independent operators.

The tone for the following exciting quarter of a century was set by Wiles's 1968 report, which stated flatly that

our method . . . lies in using the most up-to-date systems of management structure and control. Strict financial supervision is instituted . . . to ensure prompt implementation of sound business methods, but individual management is given maximum opportunity to act on its own. Once the top executives of our companies have been appointed . . . they are given freedom to run their own organisations.

This high-flown rhetoric was never entirely true, especially as the supposedly free executives had to refer any spending decision of £500 or above to the group but, broadly, the principle of devolved management was maintained throughout the next quarter of a century.

But there was a considerable price to pay: a continuing, and often justified, stream of criticism that all Hanson and White did was to "asset-strip", to sell off many or sometimes most of the subsidiaries of the firms they acquired, leaving themselves with a core of businesses which cost them very little. Their technique was only briefly fashionable in the heyday of Thatcherite entrepreneurialism in the mid-1980s but it did have unfortunate long-term consequences, not only because of the techniques themselves, but also because neither Hanson nor White encouraged, or indeed allowed, any long-term planning, especially if it involved fundamental or indeed any type of research or major capital investments.

The very success of the Hanson/ White techniques ensured that their strategy became a firm favourite with the City's all-powerful investment analysts, and contributed greatly to the steady and continuing decline of capital investment by Britain's major industrial groups (so far as Hanson Trust was concerned, the most obvious example was the disbandment of the research group in the battery firm Duracell, formerly a technical leader in the industry).

Hanson and White survived the collapse of Slater's empire in 1973-74. Indeed, the real action started only after White moved to the United States in 1973, finding the business environment there far more suited to his ruthless, bullying, free-wheeling style than that of the still-gentlemanly, still-corporatist Britain. The pattern for the following two decades was that White looked out for possible targets and conducted the negotiations for takeovers while Hanson ran the businesses from a British base (although as time went on, he spent his winters in Palm Springs).

Their successes became bigger as Hanson and White found a number of major groups run by sleepy boards of smug directors. In the United States, White found SCM - where he quickly sold enough businesses to get a billion-pound core business for free. But the couple's biggest triumph was in Britain, through the takeover of Imperial Tobacco, owners of Wills's and Players cigarettes and the Courage brewery business. Once a takeover had been finalised, action was brutal - after the takeover of Imperial Tobacco, the historic portraits of the Courage family were removed by Hanson in person.

Neither White nor Hanson felt the need to conform to any particular code or to become part of a business establishment. Their independence helped to ensure that they could retain the sense of fun and style which had accompanied them from the days of the Wiles group (whose reports had been decorated with photographs of mini-skirted models).

A sense of style came naturally to Hanson. An impressive figure, he was handsome and always impeccably groomed, keeping fit with a daily hour-long bicycle ride. He was naturally insistent on the same standards he applied to himself, of punctuality, politeness and correct dress, for those around him. And the insistence was pretty forceful. For he was not a naturally tolerant individual. As one adviser put it, "the word martinet was invented for him".

Hanson and White's outlook was well expressed in a series of advertising campaigns with themes like "a company from here [Britain] that's doing rather well over there [United States]" showing the justifiably swaggering arrogance that typified their activities. Their reputation in the United States was such that Hanson was immediately, and not entirely wrongly, identified with the aristocratic British financier who out-witted Gordon Gekko, the evil operator played by Michael Douglas, in the 1987 hit film Wall Street.

By the late 1980s, however, Hanson and White faced increasing problems. By then the group was so big that they had to take over ever-larger companies to have any impact on the overall figures. Moreover, a number of imitators had entered the field - including some run by former Hanson employees. At the same time, potential takeover targets had learnt to concentrate their activities on core businesses and to sell off those that did not fit, thus reducing their attractiveness for buccaneers like White and Hanson.

But the point at which the Hanson technique met, if not its Waterloo, at least a check that proved to be final, came in 1990 when Hanson bought a relatively small stake in the most vulnerable of British industrial groups, ICI, as a sighting shot for a full bid, or rather as Hanson preferred to put it, a "friendly merger". If the bid had been successful, Hanson would have merged its own chemical interests with those of ICI and sold the remaining subsidiaries, providing the new group with considerable financial fire-power.

But ICI launched a highly effective PR campaign against the bid, focusing on the unfortunate - if largely irrelevant - fact that some of Gordon White's racehorses were in fact owned by the group (White and Hanson were both keen on horse-racing, and their Ever Ready subsidiary sponsored the Derby for a number of years).

Following the inevitable collapse of the ICI bid, Hanson's long-term failure to invest in its businesses ensured that the only solution was to break the group up into - relatively logical - industrial groupings. The step was not taken, however, until 1996, five years after the collapse of the ICI bid and after the death in August 1995 of Gordon White.

Hanson was naturally shattered by White's death, but in his business activities he remained philosophical, treating the break-up of the group as "natural evolution" (which it clearly wasn't). "My child is Hanson plc," he said. "But my grandchildren are the five companies that we have created and I shall enjoy watching them grow." They didn't, of course, but he probably didn't care too much, for he was never sentimental - he never felt inclined to treat the group named after him as a lasting tribute to his business capacities. "I have never been a monument man," he once said. "In fact, I have always been a little embarrassed at having my name on the door. I have never looked on the company as an ego trip."

After Hanson's retirement in 1997, his main activities were concentrated on his battle against British membership of the European Union.

Nicholas Faith