Camilla Cavendish is spot on except for this little howler:
…though not all are as extreme as the late Lord Weinstock, who couldn’t sleep if he thought his £3 billion company owed a penny.
Other way round, he revelled in the way in which his company owed money. Payment terms to subcontractors were horrendous: 120 days, 150 even. That’s how he built the cash pile, by making his creditors wait.
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Quite right.
In fact, the differing terms of payment demanded by GEC from its suppliers and its customers meant that, in theory, no two GEC companies could ever agree terms with each other.
I used to work for a GEC components company. GEC insisted that we insist on 30 day payment from customers. Our customers within GEC, however, demanded 90 day payment terms.
A friend of mine worked for Marconi, which Weinstock’s GEC acquired. There was a joke about Weinstock, whose penny-pinching was legendary, that circulated within the company:
Weinstock is praying. He says, “Lord, Lord, I’m a faithful man. Every Shabbos I’m here praying to you. Grant me just one little wish: let me win the National Lottery.”
A week goes past and nothing happens. Again: “Lord, Lord, I’m a faithful man. Every Shabbos I’m here praying to you. Grant me just one tiny, little wish: please let me win the National Lottery.”
Another week goes past—nothing. Increasingly anguished, Weinstock prays again: “Lord, Lord, why don’t you hear my plea? All I want to do is win the National Lottery! Is that too much to ask?”
And the heavens open, and a beam of light descends, and a big, booming voice says, “Arnie, Arnie, meet me half-way here! Buy a ticket already!”
Say what you like about Weinstock, he was vastly better than that idiot Lord Simpson. When I joined Marconi in September 2000 the share price was £12.50, when I left in June 2001 it was 4p. And he retired to play golf with a nice fat payoff.
Weinstock was pretty bad – he let the company accumulate gigantic piles of cash, rather than making strategic acquisitions or returning it to shareholders. Of course, Simpson was worse – he blew all the cash and then some on overvalued US Internet stocks.
(I suppose it’s fair enough that we channelled British investors’ money into useless causes Stateside – the only reason the UK has a cable TV network is because the US firms that backed NTL and Telewest wasted their money on building it…)
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