Grouping versus Absorption
Page 28
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Recent News as to Contemplated Amalgamations Between Large Haulage Concerns Brings to the Fore the Position of the Small Haulier and His Future
By "Tantalus"
THE announcement that McNamara and Co., Ltd., is raising its total distribution for 1943 to 12i per cent. against 81 per cent. for 1942 arouses more than passing interest. This not only because of the increased dividend, but on account of certain negotiations which have been proceeding for some time. In this connection the directors intimate that they may soon be. in a position to advise stockholders as to what is occurring. The same stockholders are advised not to dispose of their holdings in the meantime.
Since the announcement appeared regarding an increase in dividend, the 12s. units have risen in value apd recently have been quoted at 34s. 9d. There is strong support in the city for the belief that McNamara and Co., Ltd., is likely to be absorbed by Transport Services, Ltd., on a share-exchange basis. Ordinarily, a fusion of this character would be regarded as a normal commercial development, interest being centred mainly around share values and dividend prospects. If, however, rumour be not a lying jade and the fusion of these two undertakings be completed, the position must be
. /examined in the light of the fluid and uncertain state of affairs as they concern the future of the industry. In this respect and ip the absence of any avowed gcrvernment policy, the rumoured fusion is not without significance. It may, in fact, portray the possibility of other developments of a similar nature.
One of the main characteristicsdisplayed by those engaged in road haulage is the desire not to have their noses put out of joint or to be left behind in the race. It may well be, then, that in the future other mergers will eventuate.
The Men In the Background
There is one point which should not be overlooked in respect of the above-mentioned concerns: that is these companies employ two men who are prominent figures in road-transport circles. It is doubtful whether, during the past decade, there has been any committee which has been set up in connection with the in,dustry which has not included Mr. J. S. Nicholl as a member. Also, it will be recalled, his name figured as one of the signatories to the "Book of the Eight." So far as Capt.' Barrington is concerned, his name is well known in connection with the Government Haulage Scheme, to which he was appointed by the Minister of War Transport. Recently he resigned this appointment in order to devote the whole of his time to the affairs of his own company. In connection with the rumoured negotiations between the two companies it is useful not to lase sight of the background which exists.
In the event of such a fusion being successfully completed, there will be created within the industry one of the most powerful operating units which has ever existed and one possessed of considerable potential influence in respect of political policy. In the ordinary ceurse of events, other fusions of a similar nature are almost certain to follow. The ensuing result,' in that event, would place the industry in the hands of powerful units covering the whole country. When once that is an accomplished fact, what could, be easier than for the said units to combine and form one huge cartel? Thus would be created a position so strong that policy might be dictated for all those persons engaged in the road haulage industry.
The 14 of the small operator in any such circumstances can well be imagined. His future might be in jeopardy and his voice unheard. All hauliers, therefore, who are not included in the class of big operators may soon have to think very hard regarding their, future. Sooner or later they may even have to decide whether they will fight to retain their individuality and independence or whether they will surrender their identity and become merged in' one or other of the big units of the future.
It might well be that the creation of big units or a cartel would raise difficulties for those persons who control the associations; for on many occasions—more recently than formerly—they have paid lip service to the small haulier and have emphasized the importance of the place which he occupies in the industry and the need for his presence there. In any such event would this lip service be translated into action in an attempt .• to avoid the elimination of the small operator, or would there be subservience -to the larger and more powerful interests? It must be remembered that most members who sit on the executive committees of the governing bodies, including the S.J.C., are amongst the • big operators. Furthermore, it -is a well-known fact that, in certain quarters, the opinion is held that there are too many operating units; it is felt that the industry would benefit if the number could be reduced. The formation of big units might serve as a step towards this.
There is a testing time ahead for those who claim to • guide the destiny of hauliers. If the tendency towards amalgamations should grow it can be assumed that any such development will not pass unnoticed by the railway companies, which, doubtless, at this stage silently wait and watch. Such a movement may prove to their liking, as it would provide facilities for closer co-operation, even to the extent of closer control of the larger units. By no means is this beyond the realms of possibility, for the railway companies already have huge sums of money, to the extent of millions, invested in road transport and p.s.v. undertakings. In some cases these businesses are railway-owned, in others they are partly controlled by reason of the financial holding.
Who Will Control the Industry ?
If, therefore, on the one hand, more amalgamations of road-transport concerns eventuate and, on the other, the railway companies continue to extend their interests —either by buying the concerns outright or obtaining a financial holding therein—it is reasonable to assume that,, in due course, they will secure control of the industry. As far as the small haulier is concerned, it is apparent -that he would gain the least and lose the most if caught up in the ramifications of a series of amalgamations between large operating units. There is, however, one way open to him whereby he may find protection. This lies in the grouping movement. Of the various kiddies of this type that have been established, special mention might be made of the Saunders Group because of its governing principles. These secure the individuality of each member, who retains complete control of his finances and is not burdened with heavy overheads.