Maxwell, The Outsider
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Peter Robinson did not arrive at the champagne celebration. During the shareholders' meeting he had collapsed from pneumonia caused by a suspected gallstone in his kidney. Maxwell had said little as the former chairman staggered from the hall. Understandably, Robinson had no future in BPC but nothing had prepared either Robinson or others for the scathing contempt felt for him by his successor. As Robinson lay sick in hospital, Maxwell showed that those who have no power to exert over him, whether employees or competitors, can expect neither respect nor their due. Robinson's office was occupied by Maxwell, his name was removed from the door, his papers sealed, and he was told of Maxwell's decision that, despite years of service, his performance at BPC disqualified him from receiving a pension. It was a telling omen which Kearton, with effort, rectified. Others, over the following years, would often fail to find a similar agent of mercy to give them protection. Few outside Maxwell's immediate employment, which until then had been so limited, had realised that a man who had personally suffered such scorn would himself seek to humiliate others. But Robinson's misery was long forgotten in the frantic schedule which Maxwell undertook in the weeks after the takeover.
Travelling incessantly by helicopter to BPC factories around the country, Maxwell appeared before all the BPC employees in the role he would come to adore. 'Gentlemen,' the giant would say, often standing astride a table in the canteen, 'I am Robert Maxwell and this company has been grossly mismanaged. I am going to put it right. We must make more money. I am looking for job cuts, but I'll save the rest.' As patches of hostility appeared, the voice rose slightly: 'Gentlemen, you must remember that I am now the proprietor of this business.' Few would be more impressed than his new employees at Taylous, near Maidenhead. So roused was his audience by the performance and by the promise of a bright future that they clapped and cheered, oblivious of the fact that their new hero had just announced that, to create the new Jerusalem, the majority were about to lose their jobs.
But in Queen Street, soon to be renamed Maxwell House, few observed that charm. Instead, his new staff experienced unprecedented scrutiny, especially of every penny's expenditure. Only Maxwell could sanction the purchase of a new car or the hire of a temporary secretary, or sign a cheque for over £500. On one memorable occasion, an assistant pushed a chit in front of him.
'What's this?' growled the great man. 'Approval for a new car for a rep,' replied the humbled employee.
'Why does he need a new car?' asked the employer as his voice rose to a roar. 'Why do we need this man? Fire him.'
But not only reps were dismissed. In the first five years of Maxwell's reign, very few of the company's directors, even those whom he appointed, survived for more than one year. Few could satisfy his demands or cope with the stress. 'It was annoying and mentally tiring', recalls David Perry, a former English rugby captain and the manager of BPC's factory at Taylous, 'that he acted without consulting anyone.'
Daily, after seven every morning, Perry and all the managers rang Maxwell for instructions. 'Take this down,' said the chairman, dictating the orders of the day before banging down the receiver. What emerged was not always pursued and indeed was often contradicted by Maxwell himself. Behind the bluster and the bullying there was a drastic strategy to reduce costs. The strategy was successful but the qualities of leadership and vision demanded by some were lacking. Overheads tumbled as the closures and redundancies were implemented. After one year the monthly £1 million loss was transformed into a £1 million profit. But those whom he admitted that he needed most -managers like Perry, the financial director David Harbut and the innovators like Peter Hassell - had decided to leave. They were weary and wary of an instant decision-maker, 'shooting from the hip', who rejected the conventional organisation of management and who seemed to thrive on creating rather than settling uncertainty. Perry calls it 'motivation by fear' and, among other reasons, left because 'I couldn't stand wondering when the stab would come.' Monty Alfred was among the many who were embarrassed in front of other employees before leaving the corporation. It was a settling of scores.
By the end of 1981, BPC's survival was described even by Maxwell's most bitter critics as a miracle. Despite a major recession, the company's profits could finance a £100 million investment plan for new machinery. Yet, as his visibility grew, the apparent patience and understanding shown towards trade unionists, which won Kearton's blessing during those six weeks of negotiations, disappeared.
Throughout the 1960s, Maxwell had combined the role of buccaneer businessman with his pledge to socialism. In the House of Commons, he had been an outspoken if ineffectual critic of the suicidal Luddism which imbued both British management and unions. In the 1970s, he had observed his predictions come true and had eagerly awaited the opportunity to effect his draconian solutions. The BPC agreement which sliced trade union power was just a foretaste of 'Maxwell's law'. He realised that challenging trade unions where previous, supine managements had failed was a profitable strategy and one which, for him, was politically acceptable. Although the cause was also popular among the Conservatives, in his own ranks, where he became renowned as anti-trade unionist, he provoked bitter opposition.
The first to protest were the unions at Pergamon's headquarters in Oxford. Maxwell's attitude towards his own employees had hardened since the days in Neal Street and Maxwell House in Marylebone. There were, he felt, to be no free meal tickets and he had ordered the installation of an electronic recording system which monitored the hours each employee worked. Maxwell still enjoyed using a tannoy system to address his workers, always prefacing his monologue, 'Attention, attention, this is your chairman speaking. . . .' Some found the atmosphere unpalatable.
In a memorandum dated 14 September 1979, Maxwell had acknowledged that labour relations in his own publishing house were bad and cited as evidence the awkward fact that 'during the past few months there has been a turnover of more than 50% within the Department. This high staff turnover is harmful. . . .' Feelings about working for Maxwell were mixed. Some were content, but a minority criticised the atmosphere as reminiscent of school. Throughout the 1970s, Maxwell had only reluctantly improved wages, which by 1980 ranked fifty-fourth in the NUJ's list of fifty-seven publishers. Similarly, fringe conditions such as maternity benefits had not improved since 1972 despite the company's new profitability. Patrick Tickell, who was employed as joint managing director for eight months in 1977, was among those who disliked the atmosphere and was deemed unable to cope with the exacting demands. 'The reason for the level of turnover', says Tickell, 'was simply that people did not like the conditions of work. They were expected to work extremely hard and never make mistakes. Yet their duties were never really explained to them. Instant dismissal without substantial justification was common, but I recall people being hastily reinstated after having been summarily fired by Mr Maxwell.'
After 1979, serious disagreements erupted between Maxwell and the unions concerning the further employment of two probationers. On reasonable grounds, Pergamon had not renewed their contracts, but the manner of their treatment prompted the NUJ in March 1981 to call for an official strike because, after two years, Maxwell had refused to negotiate a new wage settlement. Nine employees were summarily dismissed two days after they went on strike. Maxwell described the strikers as having 'sacked themselves' and defamed them as 'politically motivated musketeers' and even as 'Trotskyites'. Since the strikers were poorly supported, the dispute would not have escalated into a test of Maxwell's principles had a feeling not spread among many socialists that, although he was a member of both the Labour Party and the Association of Scientific, Technical and Managerial Staffs, he was bullying the union. Maxwell, who was operating in a goldfish bowl where every gesture was scrutinised, was sensitive to any coverage of his troubles, especially when it appeared on 6 June 1981 in the Bookseller. 'I took a call from Maxwell,' recalls David Whitaker, the publisher of the magazine, 'and he demanded a retraction of the report. He said it was a libel. I told him we had just repor
ted facts. He threatened a writ for defamation if I didn't apologise.' The conversation ended dramatically.
'Rubbish,' said Whitaker.
'Are you calling me a liar?' said Maxwell.
'No, I just think that you are very mistaken'.
‘I want a retraction.'
'Balls,' shouted Whitaker.
'I beg your pardon?'
'Balls,' repeated Whitaker as the phone went dead.
In reply, Maxwell issued a writ and spent the following two years engaged in all ill-tempered struggle.
The magazine had reported that Maxwell's terms of employment and style of labour relations were not quite perfect. For more than one year, during the Pergamon dispute, Maxwell had either refused to meet union officials or cancelled meetings. Often, he uttered exaggerated allegations about union officials and then, when national union officers answered his claims by substantiated and detailed rebuttals, he not only ignored their refutation but repeated the same unfounded allegations. For those with memories about Maxwell's speeches on the tannoy at the Scottish Daily News, the pattern was familiar: namely, any opponent or critic was deemed to be a subversive. By 1981, Maxwell was becoming estranged from his political allies. As Jonathan Hammond of the National Union of Journalists said,
'Mr Maxwell frequently boasts about his commitment to trade unionism and socialism . . . [but] is Mr Maxwell's behaviour at Pergamon consistent with the standards recognised by membership of those organisations?'
Hammond and the NUJ leaders were particularly irritated that Maxwell excused his refusal to negotiate by pleading travel abroad on business. On subsequent occasions, similar excuses were proven to be untrue. Twice in March 1982, Maxwell's lawyers had told industrial tribunals that their client was travelling in South Africa and Japan, while in fact he was in London and Oxford. Maxwell claimed that those trips were cancelled 'at the last moment' and blamed his subordinates for failing to remind him of his appointment in court. The unions threatened to escalate the anti-Maxwell campaign just as he was anxious for rehabilitation. Their ability to cause damage was undoubted and persuaded him to reinstate the Pergamon strikers and improve their conditions of employment. He also withdrew his writ against the Bookseller and paid a record £30,000 towards the publisher's costs.
The Pergamon dispute, literally on his own doorstep, was mild compared to his struggle with the typesetters and machine-minders at BPC's presses at Park Royal where the Radio Times was set and printed. Despite their written undertaking, the local union leaders, who were members of the NGA, had reneged on their agreement and, ignoring the orders of their national leaders, began two years of vituperative and disruptive strikes. Production was sabotaged by interfering with machinery, paper runs and the electricity supply, while the printers extracted agreements for double manning levels and pay increases which were three times higher than those of other BPC employees. It was a trial of strength which Maxwell could not afford to lose, either commercially or, more importantly, personally after the militants had doused him in oil and insulted him to his face.
If the original purchase of the BPC shares in the dawn raid three years earlier had been his Normandy landings, Park Royal was his Battle for Berlin. The ground had been carefully prepared. BPC workers at East Kilbride in Scotland and Leeds had been promised a glowing future if they agreed to print the
Radio Times, and the national union leaders had been carefully manoeuvred into dissociating themselves from their rebellious membership. On 14 November 1983, after sixteen million copies of the magazine had been lost, a group of large men with 14-lb sledge hammers entered the premises and smashed the fifty-year-old presses to pieces. The printers watched with amazement as their sword of Damocles disintegrated before their eyes. Their reaction was unprintable. 'Jungle man' was victorious. 'If Britain had six more Maxwells,' commented Lord Kearton, 'the country would have no more worries.' Maxwell beamed. This was a talent which he could capitalise on. After all the years in the wilderness, the emerging chrysalis was very confident: 'If I can run BPC, then I can do so much more.'
At the end of 1982, Maxwell admitted that he felt 'slightly bored' and needed new challenges. That year, BPC boasted £20 million profits, 'the highest in its history', and although the accounts played down its enormous debts which were published in the annual report, no one doubted that its salvation was secure. Maxwell's ambitions were signalled by the change of name to the British Printing and Communications Corporation, which encompassed his target of spreading into cable and satellite television, into computers and data banks, into electronic printing and every communications technology that was invented. Like a revolving door, 'experts' passed through BPCC to satisfy the chairman's restless urge to develop his company to 'rank among the world's ten largest communications corporations'. The vision he extolled to Saul Steinberg in January 1969 would finally come to fruition. No one else in Britain could boast his foresight, which had been fed by an insatiable appetite to learn during his travelling. But he was sixty years old with at best a decade to achieve the everlasting fame which had for three decades so unfairly eluded him. BPCC needed more money and he wanted more activities to occupy himself. The solution was to return to what he could do so well, the mixed recipe of juggling and trading which had earned his fortune in Maxwell House on the Marylebone Road.
In rapid succession in 1983, Maxwell sought to rescue Oxford United football club from bankruptcy for £120,000, bought a 13.8 per cent stake in Central Television, and purchased a rash of companies with terminal financial problems. Most of the investments earned him headlines but only limited profits. At the end of 1981 Oxford United was in the Football League's Third Division losing £2,000 a week, when a Pergamon employee approached Maxwell and asked whether he would be interested in saving his local club from bankruptcy. During the 1960s Oxford United had enjoyed a mercurial revival but in the mid-1970s its fortunes began declining. According to Bill Reeves, then club chairman, 'There was a crisis in football generally because the gate figures were dropping. There just wasn't any commercial input in the game.' In Maxwell's view, the game was suffering the same malaise as BPC and so much else of British industry. It was managed by parochial, shortsighted and sometimes uncommercial men who had allowed their industry to degenerate in filthy stadiums plagued by hooliganism. In America, by contrast, the sport was beginning to thrive. Here was another chance for Maxwell the reformer to change another British institution. Despite his accountants' advice that the club was a bad investment, Maxwell agreed, on 6 January 1982, to pay off the club's debts of £128,000 in return for taking control. Since there were no evident business reasons for the investment (which was in any event a relatively insignificant amount), there can be no doubt that, despite the incredulity of the football world, he was solely motivated by philanthropy. 'I'm doing it as a service to the community,' he would say later about becoming involved in a new sphere. Two days after the acquisition he began looking for a new manager, and demanded that the local council should agree to moving the club to a new and larger stadium while granting permission for its old ground to be redeveloped. The council instantly rejected his demand and was rewarded by the traditional bombardment of criticisms and epithets. 'When I became chairman,' he later said, 'I was promised by the City Council that we would get the Marston site for a new ground. Then they changed their minds.' The Council denied his claims. As his row with football's establishment intensified, in April 1983 he proposed a radical new solution - to merge Oxford United with Reading FC. The idea collapsed one month later. But by then, his survival plan and the appointment of Jim Smith as manager had transformed the club's finances from debt into profit. More spectators were watching a winning side, yet his presence had caused endless controversy. The sport was perplexed by an overweight club owner running across the pitch, appearing on the terraces and basking in the applause of the fans demanding his autograph. The high profile earned him opprobrium and death threats as he waded into the terraces to stop fighting and threatened to clo
se the club unless the Council co-operated with his efforts.
Three years later, when the club had won its way into the First Division, the Council agreed to invest in the club. Jim Smith, the star manager, however, resigned, claiming that he could no longer work with Maxwell. Smith had been surprised that his employer, who was involved in so many other businesses, still required to be regularly consulted about the weekly selection of the team, transfers of players and every aspect of the business. Maxwell easily shrugged off Smith's departure; but his difficulties in business were not so easily ignored.
In June 1983, he embarked upon a take-over bid which rebounded upon him and revealed, to his discomfort, that his past was still an albatross.
His new target was John Waddington, a small but important firm of printers and packagers whose expertise fitted in well with BPCC's aspirations. They were also the manufacturers of 'Monopoly', the world's most famous game for aspiring capitalists. The bid started at 7.30 a.m. on 17 June. Victor Watson, Waddington's impish chairman, had been at his desk for fifteen minutes when Maxwell telephoned. Later that morning, said the caller from London, he would be making a bid for the company. Watson was already fighting off another bid and Maxwell presented himself as a 'white knight' who would save the beleaguered damsel.
'Waddington is not for sale,' replied Watson, 'and I won't meet you.'
‘I always win,' snapped Maxwell. 'So there's no point in fighting.'
'We will fight you every inch of the way,' said Watson.
But Maxwell's timing was perfect. Waddington had barely recovered from huge losses on video-games and was vulnerable to a bid. 'He was like a shark, who smells blood and chases the prey,' says Watson.