by Ian Brown
339 pages,
ISBN: 0002159775

Net Profits: The Story Of National Sea

by Stephen Kinzer
294 pages,
ISBN: 0921054084

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Of Tires And Fishes
by Lawrence Jackson

INSTEAD OF sending anthropologists to places like Borneo and Upper Volta, we should post a few on Parliament Hill and a couple more on Bay Street. The beliefs and habits of obscure peoples are worthy of interest, but most of us more urgently need to understand the powerful in our own midst. So when a reporter offers lively insights into business culture and the burden of inherited wealth, we should rejoice and cry for more. The Globe and Mail's Ian Brown has earned this reaction with his account of the rise of Canadian Tire and the machinations of its owners, as well as the predatory amorality of those who hovered about them when big deals were afoot. It is above all a wonderfully human story. Brown sums it up perfectly himself ... Beneath the workings of a company hailed as a model of capitalistic progressiveness lay countless tales of intrigue and woe: the struggles of two brothers to create a company of their own ... the jealous younger brother's attempts to control the show; intramural corporate sex; inter- family rivalries; greed and demolished hopes; a son and a daughter vying to impress their father, and each other; the hidden power of wives; an outsider who tried to steal the company away from the family; the byzantine politics of a corporation ... The only promise Brown doesn't deliver on is "intramural corporate sex." Perhaps the publisher's lawyers sanitized the text. The astounding growth of Canadian Tire began in Toronto in 1922, when J. W. and A. J. Billes bought a garage and tire business for $1,800. J. W. quickly became a wizard at bulk buying of tires and car parts. A. J. was a master salesman. As the business prospered, the brothers developed a franchising system that brilliantly tapped both the ambition of its far-flung dealers and the middle-class passion for tinkering and home improvement. Canadian Tire kept its prices low, yet routinely made 18 cents on every dollar of sales. As sales mushroomed, dealers got rich and the founders much richer. Shareholders watched a share worth $8.50 in 1945 grow to $4,900 by 1987. Trouble began when J. W. died in 1956, leaving most of his shares to charity. Thereafter the boardroom seethed with rivalry between the branches and generations of the Billes family. To finance expansion while keeping control, A. J. Billes began issuing non-voting shares. When the block of shares held by charities became available, A. J.'s two sons and daughter bought them back into the clan in the same way; they borrowed the money, then sold non-voting shares to repay the loan. In effect, the Billes family got the investing public to finance both the corporation's growth and the family's control of the corporation -- a very nice deal for the family. The compensation for non-voting shareholders was a guarantee that if the family ever sold control, the buyer must make a similar offer to voting and non-voting shareholders alike. When the Billes siblings decided to sell out in 1986, securities lawyers advised them of a way to evade this provision. They could get four times the market price for their shares by selling control without honouring the guarantee. In a historic decision, the Ontario Securities Commission forbade this shifty manoeuvre. The Billeses didn't suffer much; they pocketed more than $22 million in nonrefundable deposits on their shares -- and they still had the shares. At the book's end, everyone is suing everyone else. By comparison, Stephen Kimber's Net Profits, a corporate history of National Sea Products, is a gentlemanly tale. This may reflect both the domesticating influence of a commissioned history -Kimber was on the company payroll as he wrote -- and a more genteel style of business in Atlantic Canada. Despite this apparent politesse, NatSea grew into the biggest fish company in North America. It had begun as humbly as Canadian Tire, when 11 partners set up a company to equip and provision the fishing schooners operating out of Lunenberg, Nova Scotia, in 1899. By the 1970s, thirdgeneration owners were running the company, absorbing most of the smaller fry around it. NatSea fell briefly into the hands of its major competitor in 1977, the same year Canada triggered dizzying optimism in the fishery by declaring a 200-mile fishing limit. Reckless expansion nearly killed the major players. Only government intervention saved them from bankruptcy in 1984. A resurrected National Sea Products emerged from that crisis and embarked on another ambitious expansion. But by 1989 the Atlantic fishery was facing the greatest crisis in a crisis-ridden history. Foreign and Canadian trawlers have been catching much more fish than the stocks can stand, and the inevitable quota cutbacks will wreak untold hardship on dozens of communities. At the book's end Gordon Cummings, a hot-shot Toronto executive recruited to turn the company around in 1984, is musing on how to manage the whiplash cycles of the industry. By the time the book was published, he'd been fired. At last report he was suing. So it goes.

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