Port chairman won't go

By Chris Hutching

Friday 11th October 2002

Lyttelton Port Co chairman Brent Layton says neither he nor managing director David Viles will quit at today's annual meeting Christchurch where they are expected to face probing questions from shareholders alarmed about the loss of capital value.

"I don't intend resigning and I don't expect David will either. We'll be giving shareholders an update on where things are at. Perhaps some people have been a little taken aback by the fact we've been quite open about this process.

"We haven't tried to do a snow job. Maybe people were expecting more of a PR spin," Dr Layton said yesterday.

The company was one of the recent losers in a decision by P&O Nedlloyd, which chose Port Chalmers, Auckland and Napier as the ports it will use for its new breed of super container ships. Insufficient labour flexibilities were cited as one factor in the P&O Nedlloyd decision.

Lyttelton Port Co suffered a $35 million fall in market capitalisation during the past fortnight. The share price held steady this week at $1.46 after going ex-dividend last Friday.

Dr Layton said the loss of business could be a short-term setback but the industrial wrangle needed to be sorted out.

He said the port enjoyed a doubling in growth over the past 10 years and a strong dividend yield. The loss of business or gaining of new trade was cyclical and other ports had also missed out in the recent P&O Nedlloyd decision.

Mr Viles maintained a low media profile this week, citing provisions of good faith in industrial relations law. His new stance comes two weeks after the company ran large newspaper advertisements, on advice from Mai Chen of Chen Palmer & Partners, seeking a corporate adviser to provide options going forward, including subcontracting out port activities affected by the industrial impasse.

Christchurch City Council, which owns 65% of the port company, and mayor Garry Moore have become active in the power struggle over the past week, pressuring both sides to a new mediation round. But whether the new mediation will be any more successful than the past three attempts remains to be seen. Although Mr Moore has been talking tough to both sides, the union affiliations with the Labour Party casts doubt on how far the unions can be forced to compromise.

"When I came to this situation I thought it was a classic case of a group of people wanting to relive the 1950s waterfront days. But now I don't think it's like that. It's a complex issue and there's intransigence on both sides and it's affecting the local economy," he said.

"The reason we hold these shares is because we see the port as an important strategic asset. It might affect 200 jobs at Lyttelton but it potentially affects thousands of jobs on this side of the hill [in Christchurch]. It's not just the union and the port company the shipping company is screwing the scrum too."

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