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Protecting your family from economic crisis

Who'd be a businessman in these dog times? If worrying about your revenues, staff and where the next piece of bad news concerning the economy is going to come from was not enough, keeping your own family together and happy is another challenge all together.

Consider the plight of Jonathan Bowie, managing director of family-owned Bowie Castlebank, which owns Britain's second-biggest high street photographic processing chain in addition to a chain of dry cleaners.

The company dates back to 1865 but took shape in its current form during the 1960s when the families of two rival Glasgow laundries, the Bowies and the Kennedys, joined forces.

Such tradition looks like being confined to the history books following the announcement this week that the €100 million company had slipped into administration with the loss of 817 jobs and a further 847 being put under threat.

Administrators KMPG said the company had looked into restructuring or refinancing without success.

Not only does fifth-generation Bowie have to get over the personal disappointment of seeing the business slip out of family hands, but he also has to face up to not one but two families who were reliant, to a bigger or lesser degree, on the success of the company.

No doubt there will be those family members who understand that being in the photographic processing business when everything is turning digital would only lead to the current predicament, but equally you can expect disappointment, anger and resentment from others who see a revenue stream drying up.

One hopes that the communication between the two families is open and strong, the financial hit will be mitigated and they are able to come back stronger.

At the other end of the business spectrum, family-controlled Ford has again been making the headlines. With no family member in operational management, the Fords are reliant on the success of president and CEO Alan Mulally.

This week he went cap in hand to US congress to submit a business plan that outlined how Ford intends to return to profitability. Part of this plan included a request for a $9 billion temporary bridge loan.

Ford has promised to sell its five corporate aircraft, cancel all bonuses for management employees worldwide and forego bonuses for all employees in North America.

The good news is that the company does not anticipate a liquidity crisis next year and plans to base its recovery on introducing more fuel-efficient vehicles – a clear sign it understands where the market is going.

Chairman Bill Ford III has reportedly been working hard behind the scenes to ensure that the green message has been getting across to the people that matter on Capitol Hill.

The family, which owns 4% but controls close to 40%, will be holding its breath. It has seen its wealth nosedive as the company's shareprice has fallen to just a quarter of what it was this time last year.

While the Fords will be used to their hands off role in terms of operational management, they will be nonetheless anxious to scrutinise how their chosen executives fare. Resisting temptation to meddle will be crucial, but at least they still have a company to call their own.

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