web analytics

Stripped

Written By: - Date published: 11:08 am, March 7th, 2008 - 21 comments
Categories: economy, Media - Tags: ,

journalist.jpgThe two major dailies have been running bizarre editorial lines against the government’s intervention to block the sale of Auckland Airport, even as their letters columns fill up with people supporting the move.

The Herald called it ‘xenophobia’. Of course, the Herald would know a bit about xenophobia having enthusiastically supported the anti-Asian campaigns by New Zealand First and others in the mid-1990s. But since when has it been xenophobic to ensure that a vital piece of New Zealand infrastructure is run in New Zealand’s wider economic interest and protect it from asset-strippers?

The Dompost goes so far as to argue that asset-stripping is impossible: ‘it’s not like they can take the airport to Canada, ha, ha, ha’

Of course, you don’t need to move an asset to strip it of its value. For instance, you could be one of two foreign media empires that buys up all of New Zealand’s print media (under the approving gaze of National). Then, you could cut journalist jobs left, right, and centre, refuse to raise wages, out-source sub-editing, increase the amount of space taken by ads, cut out investigative journalism, force the journos you have left to churn out half a dozen stories a day, and generally run the country’s newspapers into the ground, all the while extracting as much profit as possible.

So, maybe we can’t expect better from the Herald and the Dompost editorials. After all, they themselves have been comprehensively asset-stripped by foreign owners over the last decade.

[Ed note: This story was posted yesterday but fell off the front page for some reason. Bumping it back up now to give it a decent run]

21 comments on “Stripped ”

  1. Phil 1

    “Of course, you don’t need to move an asset to strip it of its value.”

    What you forgot to add is that you don’t even need to be FOREIGN to strip an asset of it’s value. The argument that foreign owners will bleed AIA ignores that it already had private owners, who have exactly the same incentives as any other private owner foreign, domestic, or otherwise, of an airport.

    This actions of Cullen et al are a reactionary political move bourne out of populist desire. Nothing more, nothing less.

  2. gobsmacked 2

    Much as I dislike the Herald today, this comment is not correct:

    “… the Herald would know a bit about xenophobia having enthusiastically supported the anti-Asian campaigns by New Zealand First and others in the mid-1990s.”

    The Herald did not support Peters’ campaign at that time.

  3. Steve Pierson 3

    I know you don’t need to be overseas to be an asset stripper, I’m rebutting the Domposts’ line that you cna’t even asset strip if you are a foreigner.

    However, foreign owners are more likely to asset strip. Their senior people have no personal connection with the country, the bulk of their operations are offshroe so they don’t hurt if NZ hurts, and they are more likely to repsond to international financial imperatives than New Zealand conditions.

  4. Steve Pierson 4

    gobsmacked. That could be correct in that they didn’t campaign to reduce Asian immigration directly, I remember all the sensationalist articles about ‘asian crime waves’ though.

  5. insider 5

    Steve

    Business has little concern beyond earning a return. Your naive faith that local companies would have less compunction to “asset strip” is not borne out by the many US companies that have asset stripped their local operations and relocated to Bombay or SHanghai, or Fisher and Paykel, Sleepyhead and numerous others who have asset stripped their NZ businesses for similar motives.

  6. Steve Pierson 6

    Again, I’m not arguing that NZ companies don’t asset strip, I’m arguing that foreign companies have a bad record of asset stripping. It was the Herald and Dompost who were arguing that asset-stripping doesn’t happen.

  7. insider 7

    By saying they have a bad record you are saying it is worse than NZ owned ones, yet where is the evidence of that? Very few NZ companies are globalised so don’t have the opportunity a foreign investor has, so naturally foreign investors may appear ‘worse’.

  8. Matthew Pilott 8

    Phil, I guess the notion is that private New Zealand inverstors are unlikely to do anything to reduce the effectiveness of their main international airport. New Zealanders, pretty much without exception, require a functioning international airport.

    A Canadian corporation doesn’t to the same extent, so the imperative isn’t there to maintain function over profit.

    That’s also relevant to your comment, insider. It doesn’t matter what New Zealand investors do overseas in this case – you don’t shit in your own backyard, so to speak!

    Regarding your point about asset stripping in the US followed by relocation – that’s not viable with an airport (you can asset strip it, but not for the purposes of relocation.)

    CAP: automobile no (hear hear! 🙂

  9. insider 9

    MAtthew

    Where is the logic in spending top dollar for an asset and then deliberately running it down jus cos you are Canadian? Most businesses recognise they need to invest in their assets to maintain or improve returns no matter where they come from, unless they can’t improve returns by doing so.

  10. Steve Pierson 10

    insider. that last comment argues that asset-stripping doesn’t exist.

  11. insider 11

    Steve

    That’s a whole other argument…but read the comment more carefully – it is comparing the logic of different motivations for foreign v local owners

  12. Matthew Pilott 12

    insider – it’s nothing to do with being Canadian, and it’s pretty clear that’s not what anyone means. If any party doesn’t have a vested interest in the functioning of an asset, they can milk it for what it’s worth. Once done, If that asset is vital to a country, you can pretty guarantee you’ll get top dollar from the government to buy it back.

    This is what concerns people, with regards to critical infrastructure.

  13. Draco TB 13

    Where is the logic in spending top dollar for an asset and then deliberately running it down jus cos you are Canadian? Most businesses recognise they need to invest in their assets to maintain or improve returns no matter where they come from, unless they can’t improve returns by doing so.

    You mean, just like all the other monopolies we sold to overseas ‘investors’?

  14. insider 14

    Matthew

    You present Canadian investors as having no interest in an assets value and NZ investors as somehow motivated differently and collectively just because they are NZers and see some different intrinsic value in the asset. Yet those same NZ investors are signing up in droves to sell their shares to the Canucks. I think you are projecting your values onto NZ investors with no real evidence.

  15. Steve Pierson 15

    Insider. Last I saw, the Canadians are well short of the number of shares they need and there’s lees than a week to go.

    Again. Asset-stripping happens (it happened to the Herald and the Dompost, whose staffs have been slashed, hell the dompost used to be two papers) and foreign investors are more likely to asset strip than domestic ones, and our strategic assets have been stripped by foreign investors in the past.

  16. Matthew Pilott 16

    Insider – I am speaking from a theoretical standpoint that has been realised in other instances.

    Your last comment isn’t right, because you’re talking about New Zealanders selling shares – not talking about operational policy when in control of the asset. Ask yourself – if people believed that an overseas interest would act to negatively impact AIA for profit, would they sell? Would they still do so, if they knew that their taxes may be required to bail out said asset in future…

    As said – New Zealanders are more likely to protect their vital assets. Those with no vested interests aren’t as likely to do so. Those selling shares may not believe something such as is being discussed will occur, or don’t care in which case you’re getting onto the argument for public ownership again.

    However I accept your point here regarding New Zealand shareholders – no one has perfect information and people can be motivated by short-term gain, even at the expense of future income. This, to me, further reinforces the need tor government intervention and explains why such regulations are common overseas…

  17. insider 17

    Steved

    The reason INL “stripped” the Dom and Evening Post is because NZ readers stripped it of circulation and revenue. So who is the asset stripper there?

    I think there is a very interesting debate to be had as to what asset stripping is because I think you are using it in a very emotive way and it could just be a response to market conditions that would be done by any rational owner.

    Matthew I don’t agree NZers are more likely to protect their vital assets. I accept that NZ politicians are likely to get up in arms and create issues in election year…

    Contact has successfully owned and operated power stations in NZ and is even building more, as well as shutting others down. It is majority owned by aussies and before that by yanks. WHere is the worry about that? have any of the dire predictions come to pass?

  18. Santi 18

    Labour is honouring its pact with the mendacious Winston Peters. This bout of xenophobia will be another nail in the coffin of the socialists come election time.

    NZ should be selling these assets to the highest bidder instead of buying them back.

    Are the Canadians going to pack Auckland Airport and ship it overseas? Will Toll do likewise?

    The socialist’s aversion to foreign investment is there for all to see. Excuses, excuses.

  19. Steve Pierson 19

    Santi. Repeating the Dompost’s stupid line that is already addressed in the post is a pretty stupid contribution.

  20. Ari 20

    Insider: Newspaper readership is going down internationally as well- probably due to the internet. Comparatively, the Evening Post lasted quite a long time, as most evening papers had either gone bust or switched over to morning papers quite a while ago.

    That said, I absolutely agree that it’s quite possible for foreign investors to be a bit more shortsighted with their investments and want to extract immediate profits rather than keep them running well in the long-term, as they won’t be as bad off as locals if they run down the business then cut their losses and move their money into a new short-term investment.

    Classifying all foreign investors that way is stupid, I agree, BUT there is much more incentive to take this kind of attitude with foreign strategic assets like railway networks, airports, telecommunication companies, etc… because there is always the hope of lucrative government buyouts on top of short-term profit. If Labour was being REALLY xenophobic, they’d simply seize the international shares for themselves. 😉 Blocking large sales to a major international stakeholder isn’t anywhere near the same thing.

  21. insider 21

    Ari

    “BUT there is much more incentive to take this kind of attitude with foreign strategic assets like railway networks, airports, telecommunication companies, etc because there is always the hope of lucrative government buyouts on top of short-term profit.”

    Surely using that argument a local company would have much more incentive to run an asset down, as they would be better better positioned to plead poverty and being local should be better connected to make a case?

Recent Comments

Recent Posts

  • Tokelau Language Week reminds us to stay united and strong
    Staying strong in the face of challenges and being true to our heritage and languages are key to preserving our cultural identity and wellbeing, is the focus of the 2020 Tokelau Language Week. Minister for Pacific Peoples, Aupito William Sio, says this year’s theme, ‘Apoapo tau foe, i nā tāfea ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • NZ announces a third P-3 deployment in support of UN sanctions
    The Government has deployed a Royal New Zealand Air Force P-3K2 Orion (P-3) maritime patrol aircraft to support the implementation of United Nations Security Council (UNSC) resolutions imposing sanctions against North Korea, announced Minister of Foreign Affairs Winston Peters and Minister of Defence Ron Mark. “New Zealand has long supported ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Pacific trade and development agreement a reality
    Pacific regional trade and development agreement PACER Plus will enter into force in 60 days now that the required eight countries have ratified it. Trade and Export Growth Minister David Parker welcomed the announcement that the Cook Islands is the eighth nation to ratify this landmark agreement. “The agreement represents ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Securing a pipeline of teachers
    The Government is changing its approach to teacher recruitment as COVID-19 travel restrictions continue, by boosting a range of initiatives to get more Kiwis into teaching. “When we came into Government, we were faced with a teacher supply crisis,” Education Minister Chris Hipkins said. “Over the past three years, we ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Border exceptions for a small number of international students with visas
    The Government has established a new category that will allow 250 international PhD and postgraduate students to enter New Zealand and continue their studies, in the latest set of border exceptions. “The health, safety and wellbeing of people in New Zealand remains the Government’s top priority. Tight border restrictions remain ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • First COVID-19 vaccine purchase agreement signed
    The Government has signed an agreement to purchase 1.5 million COVID-19 vaccines – enough for 750,000 people – from Pfizer and BioNTech, subject to the vaccine successfully completing all clinical trials and passing regulatory approvals in New Zealand, say Research, Science and Innovation Minister Megan Woods and Health Minister Chris Hipkins. ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • International statement – End-to-end encryption and public safety
    We, the undersigned, support strong encryption, which plays a crucial role in protecting personal data, privacy, intellectual property, trade secrets and cyber security.  It also serves a vital purpose in repressive states to protect journalists, human rights defenders and other vulnerable people, as stated in the 2017 resolution of the ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Ministry of Defence Biodefence Assessment released
    The Ministry of Defence has today released a Defence Assessment examining Defence’s role across the spectrum of biological hazards and threats facing New Zealand. Biodefence: Preparing for a New Era of Biological Hazards and Threats looks at how the NZDF supports other agencies’ biodefence activities, and considers the context of ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New Approaches to Economic Challenges: Confronting Planetary Emergencies: OECD 9 October 2020
    New Approaches to Economic Challenges: Confronting Planetary Emergencies: OECD 9 October 2020 Hon David Parker’s response following Thomas Piketty and Esther Duflo. Good morning, good afternoon, and good evening, wherever in the world you might be. I first acknowledge the excellent thought provoking speeches of Thomas Piketty and Esther ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Kaipara Moana restoration takes next step
    A Memorandum of Understanding has been signed today at Waihāua Marae between the Crown, local iwi and councils to protect, restore and enhance the mauri of Kaipara Moana in Northland. Environment Minister David Parker signed the document on behalf of the Crown along with representatives from Ngā Maunga Whakahī, Ngāti ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New Zealand and Uruguay unite on reducing livestock production emissions
    Agriculture Minister Damien O’Connor and Uruguayan Minister of Livestock, Agriculture and Fisheries Carlos María Uriarte have welcomed the launch of a three-year project that will underpin sustainable livestock production in Uruguay, Argentina, and Costa Rica.  The project called ‘Innovation for pasture management’ is led by Uruguay’s National Institute of Agricultural ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • 3100 jobs created through marae upgrades
    Hundreds of marae throughout the country will be upgraded through investments from the Provincial Growth Fund’s refocused post COVID-19 funding to create jobs and put money into the pockets of local tradespeople and businesses, Regional Economic Development Minister Shane Jones and Māori Development Minister Nanaia Mahuta have announced. “A total ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Health volunteers recognised in annual awards
    Health Minister Chris Hipkins has announced 9 teams and 14 individuals are the recipients of this year’s Minister of Health Volunteer Awards.  “The health volunteer awards celebrate and recognise the thousands of dedicated health sector volunteers who give many hours of their time to help other New Zealanders,” Mr Hipkins ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Community COVID-19 Fund supports Pacific recovery
    The Minister for Pacific Peoples, Aupito William Sio says a total of 264 groups and individuals have successfully applied for the Pacific Aotearoa Community COVID-19 Recovery Fund, that will support Pacific communities drive their own COVID-19 recovery strategies, initiatives, and actions. “I am keen to see this Fund support Pacific ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Community benefits from Māori apprenticeships
    Up to 50 Māori apprentices in Wellington will receive paid training to build houses for their local communities, thanks to a $2.75 million investment from the Māori Trades and Training Fund, announced Employment Minister Willie Jackson today. “This funding will enable Ngāti Toa Rangatira Incorporated to provide its Ngā Kaimahi ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Training fund supports Māori jobseekers
    Rapidly growing sectors will benefit from a $990,000 Māori Trades and Training Fund investment which will see Wellington jobseekers supported into work, announced Employment Minister Willie Jackson today. “This funding will enable Sapphire Consultants Ltd. to help up to 45 Māori jobseekers into paid training initiatives over two years through ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Ruakura Inland Port development vital infrastructure for Waikato
    The Government is investing $40 million to develop an inland port at Ruakura which will become a freight super-hub and a future business, research and residential development for the Waikato, Urban Development and Transport Minister Phil Twyford, and Māori Development Minister Nanaia Mahuta announced today. The funding has been has ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Appointments made to Defence Expert Review Group
    Defence Minister Ron Mark announced today the establishment of an Expert Review Group to review a number of aspects of the New Zealand Defence Force’s (NZDF) structure, information management and record-keeping processes.  The Expert Review Group’s work arises out of the first recommendation from the Report of the Government’s Inquiry ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • No active community cases of COVID-19
    There are no active community cases of COVID-19 remaining in the country after the last people from the recent outbreak have recovered from the virus, Health Minister Chris Hipkins said today. “This is a big milestone. New Zealanders have once again through their collective actions squashed the virus. The systems ...
    BeehiveBy beehive.govt.nz
    3 weeks ago