Thursday, May 1, 2008

How rich is rich enough?

Thursday's DomPost has a remarkable obituary for Noel Yarrow, who died on 29 April, aged 83.

Mr Yarrow took over a bakery business from his parents and "turned it into the largest family-owned bakery in New Zealand and a multi-million dollar company", exporting widely overseas.

But that wasn't what was so remarkable. He and his wife Melva enjoyed living in Taranaki, had a strong sense of social responsibility, and believed in caring for the community they lived in.

So not only did they "take advantage of financial success, using it to benefit Taranaki on an extraordinary scale" by supporting sport, schools and community groups, but they did something much more astonishing for our times.

Instead of moving the business out of Taranaki to "a bigger centre close to major markets", they kept it in Manaia, employing hundreds of local people.

Doing this did not destroy the business, apparently. On the contrary, it has flourished. Clearly it makes quite enough profit to keep on flourishing, and to enable the Yarrow family ( two sons, one daughter) to keep on giving so generously, as well as (one imagines) living very comfortably - well, what they must have considered quite comfortably enough, anyway.

The word "enough" doesn't figure very largely in business reports. The entire point of capitalism is to make as much profit as possible.

A year ago Fisher and Paykel announced that a total of 350 jobs would be lost in Auckland, because of the shift to Thailand.

"Once the lines are fully operational, the expected financial benefits are in the vicinity of $10-$15 million per annum... While the Company regrets the loss of these jobs, which are unlikely to occur before December 2007, it will endeavour to accommodate as many staff as possible elsewhere in the organisation as vacancies arise...Our laundry margins have suffered considerably over the past 4-5 years."

And it would be unthinkable for a Company (I do like the royal capital) not to seek the highest margins possible, wouldn't it.

Last month F&P announced that another 430 jobs would be shifted to low wage countries, pretty much ending whiteware production in New Zealand.

The NZ Herald reported an analyst saying that F&P was simply following the world trend set by global companies such as Sweden's Electrolux...
"The indication is quite clear. They have to find the place that can provide them with the lowest cost production."

Apparently Noel Yarrow just didn't follow the rules, because he didn't think like that. I wonder how long it will be before his bakery is snapped up by a Company which has no concept of "enough", let alone "community", and can't wait to move it to wherever the ceaseless drive for higher profits dictates.


  1. Yes, I agree, except that as far as I know, Yarrows is a private company. Once a company is listed on the stock exchange, then its overriding obligation is to shareholders, and directors tend to think that shareholders want profits. The pressure to make more and more profits is even greater now that many listed companies are owned in large part by super funds and insurance companies, which in turn have a distributed ownership. The directors of the super funds and insurance companies want to make profits, because that's how they fulfill their obligations.

    Contemporary capitalism has a lot to answer for....

    I certainly admire the Yarrow family for their commitment to Taranaki and Manaia, a commitment that they demonstrated by keeping the company private and probably not being as personally wealthy as they might have been had they listed the company.

  2. The neoliberal turn has of course made private family businesses - and any social responsibility they might wish to show - harder to sustain.

    It's a bit depressing to see, for example, numerous small dairy companies swallowed up or pushed out of the market by Fontera. That's been very good indeed for shareholders, and shocking for consumers - particularly those of us raising kids!

    There can't be too many companies like the Yarrows' that have survived the consolidation of capital, sadly. The old days might not have been perfect, but it's hard not to get nostalgic about them - even though I scarcely remember them!

  3. I was very interested to read your comments about Noel Yarrow. Seven years ago I was accompanying my fragile and recently widowed great aunt on a cruise around the Baltic Sea, when we met Noel and Melva Yarrow on the ship. They were absolutely lovely people, and showed a great deal of kindness to both my aunt and myself.

    A year and a half later, I was backpacking around NZ and stopped off in Manaia to visit Noel and Melva. They were so kind to me, they treated me like a daughter, and I'll never forget that kindness.

    Noel showed me around the bakery, and it was obvious the pride he had in his business, but also in what it gave back to the community. He was a real ambassador for New Zealand, someone you all should rightly feel proud of. A businessman with a big heart, which as you so rightly point out, is very hard to find these days.