by Gordon Pitts
The fiasco set off a long procedural wrangle that stopped the nationalization bill in its tracks. In the end, the bill was deemed a hybrid that mixed private and public implications. As a result, the legislation was broken up, and the ship repair industry was removed.
The shipbuilding turmoil set the stage for a more fundamental shift. In time, Heseltine would emerge as a key figure in the battle for the soul of the Conservative Party. As the 1970s rolled on, it became clear that Margaret Thatcher was a new kind of political leader who would not protect or defend nationalized industries, but expose them to the market. Thatcher would give rein to a breed of liberalizers, including Nicholas Ridley, the “shoot the colonial” advocate, who authored a key party report on state-owned companies.
According to the Thatcher biography One of Us by Hugo Young, Ridley believed that nationalized industries were, from every point of view, deplorable. Oversubsidized, uncompetitive, and monopolistic, they could not but be inefficient and underproductive. His report proposed a strategy for dismantling them, or at least for removing their offensive dependence on subsidies from the taxpayers’ bottomless purse. The other bonus was undermining the power of the industrial unions, which were dominant in the state-held industries.
At that time, the Tory terminology was “denationalization.” It would take a while before the more explicit “privatization” became the battle cry. In the future, Graham Day would play a key role in this war of ideas, not as a doctrinaire ideologue, but as the implementer of privatization. In November 1976, however, he was more interested in action, any action at all, to save the shipbuilding industry. But the much delayed nationalization bill died on the order paper, and thus so did his committee’s terms. A revised bill eventually would be introduced and passed, but Day had seen enough. So had most board members, who declined to be reappointed.
For Day and Mills, it was a parting moment, the end of their deeply trusting and highly effective professional partnership. The two Nova Scotia boys would remain friends as Mills moved on to new jobs, including a long tenure as an executive in the Thomson organization based in Toronto. On news of their resignation, there was recrimination on both sides of the House, with the Labour government charging Conservative obstruction and the Tory opposition railing about Labour’s high-handed mishandling of the bill. They all agreed, however, that it was a tragedy Day was leaving. The House heard from Eric Heffer, the Labour member from Liverpool and a tradesman who was a kind of conscience of the party’s working-class wing. Heffer asked if the industry minister was aware that, “on Merseyside, particularly in the trade union movement and in the shipbuilding and repair industries, regret will be felt at the decision of Mr. Graham Day to resign? He was well thought of on Merseyside, particularly in Cammell Laird. He did a first-class job.” The minister, Eric Varley, agreed that Day had done a magnificent job. “I understand his frustrations and why he was worried about the bill getting on to the statute book.” Varley also agreed to ask Day to reconsider. But there was no turning back for Graham Day. He had made up his mind.
Roger Vaughan, too, had joined with a couple of colleagues in writing to beg Day to remain in Britain. He was personally saddened that Britain was losing an exceptional manager. Vaughan knew Day was not perfect, but when he failed, it was usually because “everybody had high expectations of him and sometimes they were unrealizable.”
The facial hair styles of Graham Day reflect the phases of his career. There was the clean-shaven young singer on Singalong Jubilee and the rising lawyer of Windsor, Nova Scotia. In the Cammell Laird era, he took on sharp sideburns that arched menacingly across his face. Then there was the beard. As he once told the Times of London, its origins could be traced to November 1976. “On the day the shipyard nationalization bill failed,” he said, “I said to myself, sod it, I’m not going to shave today.” “The not-shaving was a rebellion,” Ann says. “The kids couldn’t believe it—he always had a heavy beard and he had shaved twice daily if there was something on.”
The beard was born, and the British chapter of his career seemed over. In June 1977, with the school year ended for their children, Ann and Graham Day returned to Nova Scotia, not knowing what lay ahead.
Chapter 9
The Interregnum
Maritimers come home. No matter how high or how far they fly, they return to the nest. The homing instinct brought the Days back to Canada in 1977, with Graham still smarting from the nationalization debacle. He and Ann were holed up at their cottage at North Canoe Lake, marking time, waiting for their new house to be built in Hantsport, along the Avon River, just as they had dreamed fifteen years earlier. Ann Day fully expected they would spend the rest of their lives in Nova Scotia. The question was, doing what?
The answer was, as always, serendipitous—or, as the Days call it, “happystance.” Day was driving out of downtown Halifax, heading over to the city’s Northwest Arm area to pick up Ann, who was spending time at the home of a friend. Commandeering Ann’s pickup truck, he was taking his customary shortcut through the Dalhousie University campus. As he passed the arts administration building, he caught some movement out of the corner of his eye. Andrew MacKay, then the university’s executive vice-president, was waving at him to stop. MacKay had estimated that Day would be driving through the campus at about that time. MacKay breathlessly explained that he understood Day was in the process of moving back from England. The university, he said, had some problems he might be able to help solve.
One issue was that some members of the law faculty had applied for government grants to look at transportation and ocean law. These were the early days of ocean studies as an academic discipline, arising from the United Nations’ interest in the Law of the Sea. MacKay hoped Day would help Dalhousie write a fresh proposal. Also, one of the business professors (in what is now the Rowe School of Business) was facing a heavy load teaching all the strategic planning, and he would like to share it.
Day demurred, saying he didn’t have any qualifications to teach strategy. But MacKay felt it would be refreshing to have a non-academic with rich experience teach business courses. And if the grants came through, the university would form a marine transportation centre, and he could run that.
Thus, a new chapter opened: Professor Graham Day. He liked research, understood business, and would have a more practical perspective than his fellow professors. It proved that the job always seemed to find him; he didn’t go looking. He settled into life as a university teacher and director of the new Canadian Marine Transportation Centre. He loved the teaching and the students. It gave him time to consolidate his thinking based on his experiences. For a moment, there was the thought he might make a life of it. Ann thought so, too, but now looking back, she knows he would not have been content. He was a thinker, yes, but he also had to be making things happen.
He was a fresh breeze in the business faculty. One of his students was Mary Brooks, a former occupational therapist working in a Halifax hospital who wanted to try something new and applied for an MBA. She had heard that Graham Day’s strategy courses were essential. She got into his class, and she enjoyed it. Here was this young man in his forties who had such relevant experience, who had run a major shipyard, and he was telling students about how the world worked. Yet she failed the first term. Coming from the non-profit sector, she was having trouble navigating around the idea of profits. “I was struggling a bit.” But by the time she got to the end of the second term with Day, the light had come on. She got the highest mark in the final exam.
She thrived on his style of teaching: real-world experience combined with positive reinforcement. Some events stick out, like the time a team of British bankers came to class. The bankers had been visiting Day, and their flight was not due to leave until after the class, so he invited them along. There was a case study, and the class got animated talking about solutions. In the next class, Day confided to the students that the bankers had been blown away: “You guys were
just simply wonderful.” University students didn’t usually hear that from professors in those days. There was not that positive reinforcement. But, says Brooks, “he was always really, really good at being positive and making us all feel like we were first class.”
Brooks is now professor emerita at Dalhousie’s Rowe School of Business, having spent a career studying transportation. She took home classroom lessons from Graham Day, but the life lessons stand out. One, in particular, was the longstanding Day motto that you always need drop-dead money. It was a wisdom learned during Day’s British sojourn. It’s the idea that, if you ethically can’t live with the job you’re doing, or if it starts to fall apart, you can walk away, that “you aren’t so dependent on the job that you have to continue [to] do something that you personally can’t do.” She has told all her classes this should be a constant theme in their lives.
Brooks also recalls Day’s views on the need to promote women in management. Part of it reflected respect, but for the hard-nosed industrialist there was also practicality. He always said that hiring women was a high-return investment. “He meant that, when you hired a woman, she was going to work harder because there was something to prove. They had to prove that they could do the job.”
Finally, she kept another gem from someone who had spent his British time in a declining industry. Day felt that anyone can look good in an industry that’s growing quickly, but it takes real intelligence to do a good job in an industry that’s mature or stagnating. Day himself would make a career of working in embattled industries. Brooks got into the transportation field as a researcher, academic, and consultant. “This is a mature industry. We’ve been putting stuff on railcars for more than a hundred years. Even the airplane industry is maturing. Shipping is really mature. And so how do you solve the strategic problems?” Shipping appealed to her because it’s a global industry and highly mobile, which makes it difficult to regulate internationally. By the time she had done a shipping consulting project and studied some marine transportation, she was hooked on the industry. She found the same combination of romance and hard realism that Day found so fascinating.
No doubt influenced by his own university experience, Day had a huge tolerance for people such as Brooks, who didn’t fit into the classic mould. Another of his projects was Steve Acker, a young Halifax man enrolled in the MBA program at Dalhousie. Acker came from a business background—his father was a senior manager at the Shaw Group, a venerable Halifax company in the building materials trade. While he went to school, Acker earned money working on seagoing ships. He wanted a permanent job after graduation in the marine industries, and heard there was this fellow at the Marine Transportation Centre who helped graduates find employment. So he walked in on Day and said, “I hear you get kids jobs in the ocean industries.” Day’s response was in the nature of, “And just who are you? Don’t let the door hit you on the way out.” Acker departed, but left his resumé.
Two weeks later, Acker went back. Day had gone over the resumé, found it desperately wanting, and told Acker to rewrite it—a process repeated over and over. “I ended up in my graduating year taking three classes from him. Those were the best grades I had in graduate school, and the best professor I ever had.” In time, Graham Day became a mentor. “I don’t think he was grooming me for anything in particular, but was trying to make me realize I had some modicum of intelligence and it would be a waste not to use it. I think he just saw a kid who had no direction whatsoever, some reasonable level of intelligence, and enough gumption to say ‘I need some help or direction.’” A bit like Graham Day at that point in life.
Day meanwhile was keeping a toe wet in the business world. He served for four years as a director of a private shipping company owned by the Misener family from St. Catharines, Ontario. It gave him some early exposure to the thorny issues of family business. The company had been started by entrepreneur Scott Misener, who, in the 1920s, operated ships on the Great Lakes and later on the newly built St. Lawrence Seaway. The business had been inherited by his son Ralph, who, when Day joined, was endeavouring to hand it down in turn to his three sons. Ralph Misener had hired a Harvard MBA, a smart and competent man, to guide the enterprise. The sons were good people, Day recalls, but not up to the task of running the company. In fact, Day arranged for his old sweeper, David Gardiner, to join and manage the fleet. There was a board, but its members were not all intent on providing the required oversight. When the Harvard-trained professional manager left, the businesses had to be wound up. It was a situation Day would encounter time and time again.
Meanwhile, Day was becoming restless in the university setting of the 1970s. The Dalhousie faculty was being unionized, and Graham Day was not a man who took easily to constraints. He had known union leaders, liked many of them, and worked with them, and he appreciated that they were often people with whom he could do business. But he wanted to negotiate his own path in life. It was not that he was an enemy of unions, but they were not for him.
Yet, he was a paradox. Even as he grew restive under academic unionization, he was considering plunging more deeply into academic life: he would go to Wales for a PhD. The thinking was that the University of Wales, a centre of transportation scholarship, would admit both him and Mary Brooks. It is hard to imagine what he would have become had he pursued that course: a distinguished university professor? A thought leader in transportation? Or perhaps a caged lion?
Then, in 1981, a call came, as it usually did for Graham Day. This time it was Dome Petroleum, a venturesome energy company based in Calgary and a huge player in the exploration of oil and gas in the frontier areas of the Arctic. It had become the repository of Canadian hopes—and public incentive money—for tapping frontier sources. And it needed shipping and shipbuilding expertise to get the energy out by tanker.
Graham Day was a natural fit—he had already done some consulting on Dome’s effort to find a site for a new shipyard. The appeal was not just the job description—vice-president, shipbuilding—he also bought into Dome’s national dream, a Canadian champion bringing oil out of the Arctic. This was Day’s next Canadian Pacific, a company he could love for turning a geographic expression into a nation. It reflected the ambition of Dome chairman Jack Gallagher, a charming visionary known as Smilin’ Jack, and everything in the company was subjugated to that vision.
Steve Acker remembers that he and Day had discussed how Dome had become the most interesting Canadian company in the marine field. Then, out of the blue, the young man got a call from Dome inviting him to Calgary for what turned out to be, in his mind, a disastrous job interview. But he got hired anyway, and ended up in Dome’s offices, sitting around with nothing to do. Suddenly, “there’s a knock on the door and I look up and there’s Graham. And I said, ‘What the hell are you doing here?’ And he says, ‘Do you think I was going to come out here by myself?’” For Day and Acker, it was mentor and student again. At first, they didn’t work together, but Day knew he eventually could call on Acker.
At Dome, Day found a company where everything was sacrificed for the dreams of Gallagher and his president, Bill Richards. Day had a front-row seat on how the place operated, and he could see that Gallagher, like Icarus, was flying close to the sun. That became clear when Dome made its fateful $1.7 billion purchase of a controlling interest in Hudson’s Bay Oil and Gas, a deal that expanded the company greatly but stretched its finances.
On one occasion, Day and a group of executives were accompanying Bill Richards in the company’s plane to Ottawa. In the air, Day and another senior executive spent the whole trip trying to persuade Richards and his team to pay for all or part of Hudson’s Bay with Dome shares, instead of borrowed cash. Richards and his team seemed determined to borrow because the money was in the bank in terms of potential borrowing power. They resisted financing any portion by issuing paper. The Hudson’s Bay deal became part of the crushing bank debt that eventually took Dome down, turning it into one of the classic fa
ilures of the Canadian energy industry.
The Dome management style was a concern to the very exacting Graham Day. The people worked long, hard hours, and on the whole were very competent. But he noticed that, if you scheduled a three o’clock meeting with a senior officer, you might get him by five. A lot of these people could not manage their own time. His own superior would have subordinates lined up outside his office doing nothing, waiting their turn for their appointments.
“There wasn’t a sense that what I’m doing right now with you is so important, everything else is subordinate. It was dysfunctional in that sense, although, at the sharp end, they were very good people.” He had no sense then that this was a company that would fail—except he thought the Hudson’s Bay deal’s structure was “wrong and stupid.”
The dream of building a shipyard had brought Day to Dome, but the company was overstressed. Day was back in familiar territory, travelling to Japan, where they were converting old ships into drilling rigs for the Beaufort Sea. That was proceeding very slowly, however, and the shipbuilding dream was slipping farther away.
Dome already owned the Davie shipyard in Quebec, but didn’t know quite what to do with it. Davie was Canada’s oldest and largest shipyard, founded 150 years earlier. It was a classic Canadian institution, teetering on the edge of bankruptcy and tossed in the wind of political calculation. Dome acquired it for one purpose—building Arctic-class ships—but that idea was looking more remote. The Davie yard, in turn, was having problems fulfilling contracts, including some drilling rigs for Mexico. There was also a leadership crisis in the shipyard. A number of the key officers Dome had taken on when it bought the shipyard were exiting the company, leaving a big hole. After fourteen months in Calgary, Day agreed to run Davie, and he would take Steve Acker with him. In Quebec, they rolled up their sleeves to solve the array of immediate crises and shore up the order books.