The.Economist.2007-02-10 (966424), страница 37
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Air Zimbabwe offered him a Chinese-built MA60 instead—but, citing safety concerns, herefused to embark.Copyright © 2007 The Economist Newspaper and The Economist Group. All rights reserved.About sponsorshipQantas AirwaysFasten your seat beltsFeb 8th 2007 | SYDNEYFrom The Economist print editionAn attempt to take over Australia's flag carrier hits political flakWITH its choir of sunny-faced schoolchildren perched on top of Sydney Opera House, Qantas Airways' marketingcampaign—“I Still Call Australia Home”—has proved supremely successful at tugging the heartstrings of a fiercelypatriotic nation.
Combining a sentimental ballad with some of Australia's most stunning landmarks, theadvertisement culminates with a dramatic aerial shot of the choir standing on a pristine beach in the kangarooformation of the airline's logo.But the flag carrier's success in branding itself as an Australian treasure has boomeranged, after it recommendedto shareholders an A$11.1 billion ($8.6 billion) takeover bid from Airline Partners Australia (APA), a consortium ledby Australia's Macquarie Bank which includes Texas Pacific Group, an American private-equity giant, and Canada'sOnex Corporation.
Recognising Qantas's iconic status, APA has tried to put an Australian face on the consortiumsince launching its takeover bid in November, and has repeatedly stressed that it is Australian-controlled and thuscomplies with laws governing the airline's ownership. But now it has voluntarily submitted itself for approval fromAustralia's Foreign Investment Review Board (FIRB), a 30-day process that APA had previously argued wassuperfluous since the bid was not foreign.The reason for the U-turn? Some severe election-year political flak, which could yet throw the deal off course.Much of the opposition has come, predictably enough, from the unions and a rejuvenated opposition Labor Party.The unions argue that the deal would lead to big job cuts among Qantas's 37,000-strong global workforce—93%of which is Australian—as maintenance and back-office tasks are transferred to China and India.
This appeal toeconomic nationalism has struck a chord. Polls in a handful of marginal government-held constituencies found that80% of respondents opposed the government's “hands-off” approach.The ruling Liberals must also take note of the concern of their coalition partners, the rural-based Nationals. Theyrecall the pioneering days of Australian aviation, when the Queensland and Northern Territory Aerial Services, asQantas was then known, provided a lifeline for remote communities.
Worries over the loss of regional serviceshave prompted leading National party figures to call for a separate Senate inquiry into the deal. Other critics worryabout a break-up—a bloody dissection of the “flying kangaroo”.Not everyone agrees. “Political obfuscation,” cries Peter Harbison of the Centre for Asia Pacific Aviation, aconsultancy. Qantas dominates the regional market, he notes, and makes more profit from it than from otherroutes. Regional flights also feed long-haul routes. As for asset stripping, Mr Harbison says Qantas would befoolish to divest Jetstar, its budget carrier, when the low-cost market is growing fast.Peter Costello, the finance minister (and prime minister in waiting), will ultimately determine the government'sposition on whether the deal is in the national interest, and his public rhetoric so far has been suitably patriotic.
“Ifanyone tries to lift the foreign ownership in Qantas above 49%, they will be stopped,” he told reporters inCanberra this week, sternly invoking the rule established when Qantas was privatised in the 1990s. But since theAPA bid has been carefully constructed to guarantee 51% Aussie ownership, and Mr Costello himself urgedrepresentatives of the consortium to put itself before the FIRB, he is widely expected to give deal the go-ahead.He may well impose voter-friendly conditions, binding APA to safeguard routes and jobs. The challenge for APAnow, as it fights to win over both the government and at least 90% of shareholders, is to navigate the dealthrough the smoke and subterfuge of election season.Copyright © 2007 The Economist Newspaper and The Economist Group. All rights reserved.About sponsorshipManaging the militaryBack to school for the admiralsFeb 8th 2007 | CHAPEL HILL, NORTH CAROLINAFrom The Economist print editionCan business schools help the armed forces?“THE higher you get, most of us think we're perfect,” says Jim Shanley, a former Bank of Americaexecutive, as he hands out a form for assessing personality flaws.
His scribbling students at the Universityof North Carolina's Kenan-Flagler Business school are not aspiring chief executives or MBAs, but three-staradmirals. On this week-long programme, the first of its kind, they are learning a range of skills such asencouraging innovation, making better decisions about fleet finances and communicating more clearly.A generation of executives cut its teeth on Sun Tzu's “ The Art of War”.
America's navy has put thecombat boot on the other foot, using civilian executive courses to burnish leadership. Admirals have longgone to Princeton or Harvard for foreign-policy refreshers. But Vern Clark, the Chief of Naval Operationsfrom 2000 to 2005 and the first CNO with an MBA, made a point of sending admirals to business school.UNC now runs six courses a year for one-star admirals; last month's course was its first for three-stars.Air force officers took their first course at Kenan-Flagler last October.How useful can this be? Commanding a submarine division, or even organising the navy's supply-chain, isvery different from corporate life. Competition is not much of a factor, unless you count beating the armyor air force for tax dollars.
Building ships takes 17 years, and they need to last another 50—a time horizonthat would confound most investors. And admirals switch jobs often. In the worst case, they may get acall on a Friday and be expected at a new desk on Monday—not at all like the corporate world (unless theboss gets the boot).“The economics of what you learn in business school are not necessarily the most central thing” forofficers who have to worry about war-fighting strategy or technology, argues Michael O'Hanlon, a defenceanalyst at the Brookings Institution in Washington, DC.
“You can make the argument that people shouldbe learning engineering or military history.” Moreover, he notes, the corporate style of Donald Rumsfeld, aformer defence secretary who (like many top corporate leaders) thrived on risk-taking, “didn't work out sowell.”But some overlaps are clear. Naval officers dislike making tough personnel decisions, says Phil Quast, aretired vice-admiral who oversees executive education for the navy. And vice-admiral John Jay Donnellygrumbles about his e-mail overload as bitterly as the next branch manager. “Delegate”, he is advised.Copyright © 2007 The Economist Newspaper and The Economist Group. All rights reserved.About sponsorshipFace valueDigging deepFeb 8th 2007From The Economist print editionZanele Mavuso Mbatha wants to turn an investment company into a diversified mining giantGet article backgroundSINCE she took the reins at Incwala, a South African mininginvestment firm, last September, Zanele Mavuso Mbatha has beenavoiding the media.
She is not keen on personal publicity. “It's not aZanele show,” she says firmly. “It is an Incwala show.” Yet in SouthAfrica's mining business, still dominated by white males, Ms MavusoMbatha cuts an unusual figure. The 36-year-old is at the helm of$1.7 billion of platinum assets, which make Incwala one of thelargest black-owned and -operated companies in South Africa'smining industry.Incwala, which means “first fruits of the season” in Zulu, started lifein the limelight. Born in 2004 out of Lonmin Platinum (Lonplats), theworld's third-largest platinum producer, it is a product of thecountry's “black economic empowerment” (BEE) policy, which ismeant to redress the economic injustices inherited from apartheid.South African mining companies are expected to do their bit, whichamong other things means transferring 26% of their capital into black hands by 2014.
When ImpalaPlatinum decided to divest from its joint venture with Lonmin, 18% of Lonplats went to the newly createdIncwala, thus helping Lonplats's parents meet their empowerment obligations. Incwala was touted as thefuture flagship of black mining in South Africa, and expectations ran high.More than two years and three chief executives later, however, little has happened. A share in anotherplatinum mine has been added to its holdings, also via Lonplats.
But a planned tie-up with the miningdivision of Mvelaphanda, another BEE heavyweight, fell through last year. A few months later, Incwala'sboss, Arne Frandsen, packed his bags. Ms Mavuso Mbatha, a shareholder of Incwala and deputy chair ofthe board, took the job.The daughter of exiled political activists, she left her Soweto home as a child and was schooled inSwaziland, Zimbabwe and the Netherlands, before studying international economics in California. All thiswas light years away from the second-rate Bantu education provided to black South Africans under theapartheid regime.
After a few years as an investment banker in New York, Ms Mavuso Mbatha moved backto South Africa in 1997, versed in mergers and acquisitions in mining. This, she says, had always been theplan: “When you're an exile baby, your final destination is South Africa.”But after years of absence, returning home took some getting used to. “In business, a black woman wasnothing,” she recalls. It was a long way from the politically correct sentiments of Wall Street. SpeakingSotho and Zulu softened the culture shock, but only slightly. In the late 1990s BEE was in full swing, butearly deals involved a handful of well-connected heavy hitters. Confident that this would change, MsMavuso Mbatha created her own investment company, Dema, with a partner.
By the time Lonplatsengineered its own empowerment transaction, the mood had changed, and companies were looking fordifferent types of partners. Dema became one of the three lead black investors, which, together withLonplats employees, local people and a women's group, own 53% of Incwala.Although the deal-flow may have been disappointing, Incwala has been doing well. Thanks to strongplatinum prices and the quality of its investment—Lonplats is amongst the lowest-cost platinum producersin the world—Incwala's market value has climbed from $650m at its birth to $1.7 billion today.
Yet itremains a start-up, albeit one with a fat balance sheet.Ms Mavuso Mbatha has big ambitions, and her proposal for a new way forward has just got the nod fromthe board. The idea is to turn Incwala from an investment company into a diversified mining operator. Thecompany is shopping for other mines, in platinum and other metals too, and will seek management controlwhenever possible. Ms Mavuso Mbatha expects to see some consolidation within the black mining world inthe next few years, and Incwala needs more assets under its belt if it wants to acquire, rather than beacquired.
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