The rise and fall of Gunns

A tale that needed telling.

Those are the words of Geoffrey Cousins referring to Quentin Beresford’s book ‘The Rise and Fall of Gunns Ltd’.

Mr Cousins is right.

It’s a tale that everyone interested in the future of Tasmania should read.

A failure to understand history increases the chances of repeating past mistakes, a common occurrence in Tasmania.

Quentin Beresford outlines the historical context of the Gunns’ debacle, from the hydro industrialisation era, the Wesley Vale campaign through to the Rouse bribery affair. The inadequacies, failings, Machiavellian manoeuvrings, dishonesty and unethical practices by participants are laid bare.

At no stage were lessons learnt.

The relentless arrogance, hatred and paranoia bordering on the sub-clinical towards those with environmental dispositions led to the failure of both major parties to examine the potential risks associated with Gunns’ proposed pulp mill, that it was a grand folly utterly dependent on government subsidies and which would have needed to be bailed out by governments in the almost certain event that budgets were not achieved.

There’s not a lot in the book that’s new to those who have been closely following the fortunes of Gunns. But having all the info together with 1,000 footnotes gives historical sources, context and balance to the saga of debilitating corporate cronyism Tasmanian style.

One of the saddest conclusions that can be drawn from the book is that the myopians currently occupying government benches, by repairing the battered model of corporate cronyism with new legislation covering forests, protests and defamation are behaving exactly the same as their failed predecessors.

Whenever a company like Gunns hits the wall, the eventual details which finally emerge suggest that the company was in even worse shape than publicly known at the time.

In the last days of John Gay, Greg L’Estrange had taken over as CEO but John Gay was still Chairman.

We were led to believe it was the institutional investors who were trying to get rid of Gay.

But according to an anonymous insider, quoted in the book, things were much worse.

From page 358:

Gay didn’t realise that the knives were out for him inside the company as well. L’Estrange, his handpicked CEO, was one of those people.

.           .           .           .

During May, ‘the board became dysfunctional, there was back stabbing, knifing and mayhem’ The dramatic climax occurred on 27 May 2010. Realising that L’Estrange was working against him, Gay and the board sacked L’Estrange. L’Estrange agreed to go but, holed up in his office, he telephoned the key institutional players about the shock development; they contacted the board and told it to reinstate L’Estrange ‘or they would sell the company down until it was worthless’. Gay’s position was untenable and he resigned mid-morning. It was an ignoble end.

Quentin Beresford’s book The Rise and Fall of Gunns Ltd will be launched in Hobart on 5^th Feb and in Launceston on the 8^th Feb. It’s worth a read.