|Issue No 99||15 June 2001|
Who Killed One.Tel?
Shareholder activst Stephen Mayne works his way through the rubble to attribute blame for the One.tel collapse.
As a former Tool of the Week myself it is indeed an honour to be guest contributor of the Tool section in this week's Workers Online.
And what a group of tools we have in the One.Tel debacle. So who is the biggest tool? That prize would probably have to go to joint founder Jodee Rich, who was a billionaire on paper just 12 months ago.
He is the man who almost went broke in the 1980s with computer company Imagineering and does not appear to have been telling the truth to everyone about One.Tel's financials.
The visionary was not delivering to plan and tried to cover it up as it all imploded in a sea of ill-founded blue-sky optimism.
This is bad enough in its own right but the most objectionable thing about it is the lifestyle he lead before the company had even made a profit.
Who has eight boats, a Porsche, a $14 million Darling Point mansion, an $8 million Vaucluse mansion, a couple of planes and a 1200 hideaway in the Whitsundays when their company is still losing $300 million a year.
And all this from a guy who ruthlessly tried to lock the union out of One.Tel and signed up lots of young workers on no-strike, no-redundancy contracts worth $28,000 a year.
Fellow founder and joint managing director Brad Keeling is the second most responsible because he shared in the $15 million worth of bonuses and was also ridiculously optimistic when assessing One.Tel's finances.
It was also these two lads he embarked on the ill-founded strategy of paying $523 million for Next Generation spectrum and then committing to build a $1.2 billion network. These two moves literally sent the company broke and it was the founders who dreamed dreams about owning their own network.
As Telstra has demonstrated this week, the whole telco sector was being squeezed but Rich and Keeling were deluding themselves and anyone who'd listened that One.Tel would come through unscathed.
The next biggest tool goes jointly to James Packer and Rodney Adler because they were the original backers of One.Tel five years ago.
Rodney was an old school mate of Jodee's at Cranbrook and persuaded James Packer to back this "visionary". There is nothing worse than a director who dumps stock in a tumbling market and that is exactly what Rodney Adler was doing right up until the point when One.Tel stopped trading.
At least Packer, Murdoch and the two founders did not try to sell out and they were left with 70 per cent of nothing which at its peak was 70 per cent of $5 billion.
The biggest mistake James Packer and Lachlan Murdoch made was agreeing to go on the One.Tel board when there is no way in the world they had the time to keep an eye on the joint MDs and hold them accountable. They are also responsible for approving the bonus deals and even pumping in hundreds of millions that triggered these very bonus payments which then helped destroy confidence in the company.
James Packer put in a real tool effort when he sacked PBL chief executive Nick Falloon for questioning the One.Tel investment and then hired a One.Tel spruiker in Peter Yates to take over.
Both Packer and Murdoch did not have enough street-wise bean-counters looking after their interests as they attended to the major parts of their billion dollar empires.
For their efforts, the boy moguls will now find themselves tied up in court action and should also hand over the $90 million worth of pre-paid advertising that One.Tel never used through the News and PBL outlets.
All in all it's a mighty big mess and plenty of tools were in there sharing in the glory.
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Interview: In Defence of the Umpire
Australian Industry Group chief Bob Herbert on why the Industrial Relations Commission is worth fighting for.
Unions: Diary of a Dude
One.Tel worker Warren Manners thought he had a dream job and no need for a union. That was until the money ran out.
Legal: Dot.Com Casualties
The high profile collapse of One.Tel had significant implications for its employees. But what about its contractors?
Industrial: The Shopfloor, United
Chris Christodoulou argues that without an active union membership, workplace democracy is just a pipe dream.
International: A Saharawi Woman's Plea
Sydney unionist Stephanie Brennan travelled to Africa to witness first-hand the struggle for independence in West Sahara.
History: Once Were Tuckpointers
Trawling through the files, Paul Howes stumbles upon some unions that represented workers long departed.
Politics: Out Of The Comfort Zone
In his new book, Brett Evans argues that while Labor is honing its reform agenda, it is still struggling to reform itself.
Satire: World Domination
The US has threatened not to pay the UN the money it doesn’t pay anyway.
Review: Wiped Out
Bread and Roses is a new movie about the struggle of invisible office cleaners to gain dignity and respect at work. Pity you won’t see it here.
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Last Modified: 15 Nov 2005