On Gattung’s revisionist history of Telecom

Written By: - Date published: 10:57 am, March 5th, 2010 - 15 comments
Categories: business - Tags: , , , ,

Over at Scoop, Gordon Campbell takes Theresa Gattung to task for her revisionist history of Telecom in the Dominion Post this morning.

One hates to kick someone when they’re down but when it is former Telecom CEO Theresa Gattung and she is peddling a book in which she professes herself to be shocked (shocked!) by the size of the remuneration packages currently being paid at Telecom, the urge is irresistible. Gattung, like David Lange before her, seems more than willing to criticize the organization she once headed, as if she bore no residual responsibility whatsoever for its current condition.

On her complaint that the “$7 million salary and incentives package for current CEO Paul Reynolds is intolerable, but her own $3 million package was OK and the $5.4 million payout she received in 2007 was also value for money”,

Once you get to seven figure salary and incentives packages, I would have thought the little number at the front becomes almost irrelevant. Both her and Reynolds’ remuneration packages are and were obscene. I’d have thought it would be quite hard to pocket $35 million remuneration packages every year and still claim that you were being discriminated against on the basis of your gender. Apparently not. Put it this way: did Gattung do a really good job of positioning the company for the more competitive environment in which Telecom now finds itself? Did she manage to negotiate productively with a Labour government that was intent on reform, and on ending Telecom’s capacity to screw consumers and the economy for the greater benefit of Telecom shareholders? Hardly.

On accusations that David Cunliffe was devious and dishonest in his regulation of Telecom:

The reality is that Telecom had wielded its power without compunction for at least 15 years, ever since Richard Prebble turned a state monopoly over to the tender mercies of Telecom’s new owners for peanuts, and without putting any safeguards for consumers (or for business) in place. It was a situation that couldn’t last. The Lange government had created a monster, and National’s Maurice Williamson sat by idly watching this out of control corporate beast pile up the profits at everyone else’s expense, for the entire 1990s.

Yet ultimately, and by her own account, Gattung was finally outfoxed by David Cunliffe and his Boy Scout wiles, for goodness sake.

And good bloody job too. If Labour did anything wrong it was in not going far enough. Telecom’s disgraceful treatment of its engineers followed by the current shambles with XT suggests Labour would have been better off bringing it back into public ownership and running it properly.

On the claim that Mike Williams offered her a spot as a Labour MP:

Gattung’s clanging naivete is best illustrated by her anecdote about then Labour Party President Mike Williams supposedly sounding her out on becoming a Labour MP. Memo to TG: this is a negotiating tactic called messing with your mind. I’d wager that it is her particularly blunt set of personal sensors rather than gender discrimination that explains why a local firm recently thought twice about taking her on in a leadership role.

Like most of the would-be Atlases who dominate New Zealand’s business elite, Gattung is unable to admit her own failures and face up to the fact that a large part of the responsibility for Telecom’s current position comes back to her failures of management.

Remember that next time you hear a business executive preaching “personal responsibility” to the poor.

[John Minto’s recent piece on Telecom as an example of the failure of privatisation is also worth a read.]

15 comments on “On Gattung’s revisionist history of Telecom ”

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  1. the sprout 1
    5 March 2010 at 11:45 am

    The CEO who surprised everyone with her kamikaze swansong speech openly admitting her company’s successes were built on exploiting the ignorance of its customers.

    • Draco T Bastard 1.1
      5 March 2010 at 12:00 pm

      Not only ignorance but the simple fact that the customers of a monopoly don’t have any power to influence that monopoly.

  2. Policy Parrot 2
    5 March 2010 at 11:56 am

    Telecom’s shareholders should be blaming her and her team for the fall in their share prices over the last three years, not David Cunliffe. Their chronic underinvestment and anti-competitive attitude made LLU a necessary reality, when, it could really have happened on Telecom’s own terms. I would even go further, and say that Paul Reynolds, whilst grossly overremunerated is reasonably competent, and that the problem with the XT network lies in the culture of management fostered by Gattung and her predecessor, one Roderick Deane.

  3. tc 3
    5 March 2010 at 11:58 am

    Nice stuff…..Cunliffe did an excellent job and had no end of heavy hitting telecom lawyers and the usual obstructionist/confusion tactics (as endorsed by TG herself as stock in trade tactics for telcos) being used but eventually he prevailed, all kiwi’s owe him for that.

    Gattung admits it was about profit above all so by default she takes responsibility for failure to invest in the network…..annual reports show depreciation exceeding re-investment…..a very bad sign in a technology dependant business.

    Gattung’s simply a lightweight, chosen by Deane and co because they wanted someone they could direct and is a marketing type when they should’ve appointed a techy/engineering type to ensure they kept up……the telecom board is the problem but no surprises they all blame the gov’t….pathetic. Deane’s such a whinger…..Boyd’s a joke also.

    Note the outgoing sacrificial Lamb (Mount) crowing about a great job on separation which was meant to have been done and dusted yet Joyce keeps giving them extensions…..What The ?

    • mickysavage 3.1
      5 March 2010 at 12:19 pm

      I agree.

      Cunliffe should wear Gattung’s criticism as a badge of honour. Gordon Campbell’s comment should be repeated:

      In the early 1990s, Telecom was milking the market advantage it had been handed by Prebble and was delaying its capital investment in new technology. That was one prime reason why New Zealand (and its export effort) have lagged so far behind the rest of the world in broadband take-up which has been merely one example among many of our telecommunications deficit.

      That situation is now belatedly changing, largely thanks to Cunliffe’s reforms.

      It was absolutely vital that Telecom was broken down and he achieved it.

      The nat rollout of superfast broadband, provided of course by Telecom, is a surreptitious attempt to roll back Cunliffe’s reforms. It should be avoided at all costs.

  4. deemac 4
    5 March 2010 at 12:06 pm

    her interview on RadioNZ this morning was classic arse-covering stuff – you have to admire her chutzpah if nothing else!

  5. Clarke 5
    5 March 2010 at 12:53 pm

    Gattung can spin the past all she likes, but the most telling blow against her is that she’s proved to be completely unemployable post-Telecom.

    As the HR types say, “past performance predicts future performance.” – and on that basis, who in their right mind would want a repeat performance of Theresa?

  6. tc 6
    5 March 2010 at 1:18 pm

    Spot on Clarke..,…aside from that shambolic Wool consolidation body (ah the hand of Norgate ….again) TG’s a marketeer who admitted they mudkateered to enhance the bottom line…..stupid stupid stupid…..that’s why there’s so many lawyers at the ‘top’, they never admit anything so nothing sticks to them.

    So stupid loose comments and no tech savvy leaves her with little to offer.

    So unless anyone wants a female markateer culpable for wiping off half a business’s value and recuding it’s market dominance forever she’ll struggle and deserves to….her arrogance is out of place except at her former employer where it’s thriving under the grumpy scot.

  7. John Dalley 7
    5 March 2010 at 2:10 pm

    While i dont have an ounce of sympathy for Gattung, she is only the puppet with the proverbial hand shoved up its backside. Rodderick Deane and the rest of the board should be held just as culpable as Gautting for the fiasco that is Telecom.

  8. Rex Widerstrom 8
    5 March 2010 at 2:36 pm

    “Messing with your mind”? Yeah right.

    The President of a party doesn’t risk making a personal offer unless it’s serious… there’s always the possibility that the person being wooed will say no and blab and… err… make you look like a dick. Or if your greedy, ambitious, unsuitable target actually says yes and blabs it… err… makes you look an even bigger dick.

    If they wanted to “mess with her mind” maybe Clark shouldn’t have left her boot prints all over Paul Swain when she over-ruled him on local loop unbundling after a cosy meet with Gattung.

    Perhaps Cunnliffe, as an effective Minister and communicator and thus a threat to the ordained succession, would have been moved aside for Gattung as Comms Minister in her first term… now that would have been fun to watch.

    • Clarke 8.1
      5 March 2010 at 2:58 pm

      You’re probably right about the “messing with your mind” thing, Rex – based on two incontrovertible bits of evidence:

      – Mike Williams doesn’t really do subtle, so the idea that he would develop and run a disinformation campaign against TG specifically to further the government’s LLU ambitions is stretching credulity a bit far
      – However Mike does have the “loose cannon” reputation …

  9. Ed 9
    5 March 2010 at 3:31 pm

    Theresa Gattung’s legacy to Telecom as a marketing guru and acolyte of Rod Deane was serial convictions courtesy of the Commerce Commission, a reputation in the market for inferior product, deviousness, incompetence, concern only for shareholders, and underinvestment in people and products. That even National have not given her a job must be extremely embarrassing for her.

  10. Rich 10
    5 March 2010 at 9:11 pm

    So, she’s a dyed in the wool Tory and demonstrately incompetent.

    And Mike Williams saw her as an ideal Labour candidate. Hmmm.

    Maybe we got off lightly with Phil Goff?