The UTC, FCB merger embroiled in politics

THE EDITOR: Our power-hungry politicians are at it once again; flexing their muscles with utterances that can be deemed deplorable and defiant. This posturing can only lead to disaffection in the general public and anxiety in the business community.

I am alluding to the Prime Minister’s insensitive and high-handed approach regarding the extension of Clarry Benn’s tenure as CEO of UTC and the persistent talk about the merging of UTC with FCB. Let’s address the extension issue affecting Clarry Benn, CEO of UTC first. The PM remarked that the policy in the public service was that persons ought to retire when they reach retirement age unless there were overriding considerations which suggest otherwise. He elaborated, “In the case of UTC, we do not identify such overriding considerations.” (To quote him verbatim.) Consequently, Clarry Benn was given an additional six-months extension which the PM said should give the Board time to appoint someone else. When the PM chooses to make these inflammatory utterances, froth with rancour and disdain he should at least “smile” so that we would all be aware of the fact that he is only joking. The PM should take the human anatomy very seriously in that we were created with two ears and one mouth; as a result we are expected to listen more than we speak. Having said that, I hasten to point out to the PM an overriding consideration favouring Clarry Benn, which highlights why he should be treated with more dignity and respect. Under Benn’s stewardship, UTC leaped from assets of $1.3 billion in 1996 to $10 billion in 2003. This phenomenal feat was accomplished in just seven years, without acquisitions of any sort. With regard to the UTC/FCB merger (why kill the goose that lays the golden egg?) FCB may deal with mutual funds, but that alone does not make it an investment enterprise, it still remains for all practical purposes a bank. While UTC has proven itself as a well managed, successful investment enterprise for a number of years, FCB evolved from mergers involving three struggling banks in 1993 and currently manages assets of over $11 billion.

No one in his right mind, whether he may be an MBA or CEO can make a strong case for the merging of FCB with assets of $11 billion accrued in ten years, with the infusion of assets from three failed banks, with UTC with its mercurial achievements — the accumulation of assets from $1.3 billion to $10 billion in seven years. Mergers are only necessary when an organisation is not well managed, and as a consequence is doomed to failure and ultimate bankruptcy precipitating “a takeover” by a much stronger company or enterprise.  If both institutions are “solid and strong,” just to quote Larry Howai, CEO of FCB, why entertain a merger? Where does the need arise? Which organisation would carry the allotted name without credibility and image problems? Our present Government and governments in the future should consider divestiture of all business enterprises, because of Govern-ment’s bad track record in controlling business ventures. Their activities and involvement should be limited to the enforcement of laws dealing with monopolies, the settling of labour disputes and overt civil problems in the workplace. The UTC/FCB merger smirches the fine accomplishment of UTC CEO Clarry Benn and the bickering over the continuation of his tenure, even after it was approved by the UTC Board of Directors. On the issue of politics clouding the matter, here is how a first rate country deals with sensitive matters that can affect a great number of people. Allan Greenspan, the present head of the US Federal Reserve, an avowed member of the Republican political party, was allowed to serve for two terms under President Clinton a Democrat.  Greenspan at this point in time, is well into his mid-seventies. One is left to believe that TT would come to an end if Benn were to receive a full tenure, and if the impending merger between UTC/FCB were to be scrubbed.

ULRIC GUY
Point Fortin