KEY POINTS:
In his statement not-quite-ruling-out a government handout to Fisher & Paykel, Prime Minister John Key, hinted that - in the event of any major NZ corporate receiving taxpayer largesse - the appliance firm might be a recipient because "it's an iconic NZ company that employs 1600 people".
Bruce Sheppard, head of the Shareholders' Association, echoed the sentiment in a news report and again the word 'iconic' popped up.
But is icon status enough to justify shovelling unspecified sums of government money the way of Fisher & Paykel? The company might make decent appliances - I'm no whiteware connoisseur - but should we bail it out merely because of an advertising-induced patriotic association? Is it too iconic to fail?
Like many firms, Fisher & Paykel is experiencing cash-flow issues as its latest report details and perhaps it deserves a hand-up (not a hand-out) from the friendly taxpayer.
But we need better criteria to make that decision on than iconicness. Fair enough that New Zealanders might want to save the 1,600 Fisher & Paykel jobs in the home country but what about the significant workforce the firm employs in Reynosa, Mexico; Clyde, Ohio; Cleveland, Brisbane; Amata City, Thailand, and; Borso del Grappa, near the Italian town Treviso?
Saving jobs is one thing but the people who really benefit from bailouts are shareholders - is Fisher & Paykel majority-owned by New Zealanders? Probably, but we should know the answer before committing funds. From the Companies Office records you can see that five Australian nominee companies (most likely super funds) are among the top 10 shareholders in Fisher & Paykel. The remaining five top shareholders are local nominee firms (again probably super funds) and two NZ government funds - the ACC and NZ Super Fund, which together hold about 6 per cent of Fisher & Paykel.
What does it take to be a NZ icon?
David Chaplin
