Gattung speaks up

March 5th, 2010 at 10:09 am by David Farrar

The Herald reports:

Former head has attacked the company for paying its executives much bigger salaries than when she was in charge.

In her book Bird on a Wire, which goes on sale next week, Ms Gattung – who received a leaving payment of $3.9 million in June 2007 on top of a base salary of $1.25m – questions whether the current staff deserve such generous pay.

“Now that I’m long gone I, with the rest of the country, wonder about the propriety of a company making half the annual profits it did a few years ago but paying its executives considerably higher salaries.”

It’s a fair question, but there may also be a fair answer. One reason profits have dropped is because the Government has operationally separated Telecom to stamp out business practices which were anti-competitive. The reason the Government did this is because it got so frustrated with the behaviour of Telecom under Theresa’s regime.

Ms Gattung told the Herald politicians deserved much of the blame for Telecom’s latest woes.

She said she predicted in 2007 that the Labour Government’s decision to give competitors access to Telecom’s exchanges, and to split the company into three divisions, would result in a “train wreck”.

Telecom may be struggling (for a number of reasons), but the sector as a whole is actually doing very well. The train wreck for me was the previous status quo.

In her book, Ms Gattung also reveals that former Labour Party president approached her shortly before she left Telecom to stand for Labour.

She says she was “flabbergasted”.

Now that would have been interesting.

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35 Responses to “Gattung speaks up”

  1. mickysavage (786 comments) says:

    Gattung is a poor apologist for a private monopoly. David Cunliffe’s work unbundling the local loop was vital and the only way that broadband penetration was going to increase. This Government’s putting the break on his broadband challenge has slowed things down and its own broadband project has either wittingly or unwittingly rebundled the local loop.

    Telecom do not deserve any credit and Gattung is seeing things through rose tinted glasses.

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  2. Tim Ellis (251 comments) says:

    Mr Williams should consider writing a book. It would be fascinating reading. Such chapters as “How I seduced Owen”, “How I tried to seduce Theresa”, and “Batman and the H-Fee” would be a great read.

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  3. davidp (3,588 comments) says:

    >Ms Gattung also reveals that former Labour Party president Mike Williams approached her shortly before she left Telecom to stand for Labour.

    Labour, the party of overpaid monopolists?

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  4. KiwiGreg (3,259 comments) says:

    An appaling CEO of an appaling company.

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  5. voice of reason (490 comments) says:

    It does raise the question – is Reynolds worth twice what Gatting was paid? – Today you might say – clearly not.

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  6. alex Masterley (1,523 comments) says:

    Another interesting author and title would be;

    David Cunliffe (note the silent t) “Telecom, My part in it’s downfall.”

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  7. Alice (17 comments) says:

    Talk about the Pot calling the Kettle Black!! Her new book talks about how dreadful it was that so many executives lost their jobs after she left and how she felt so lost after leaving Telecom. This woman was addicted to re-structuring. I went through 27 re-structures in just 5 years when I worked for Telecom. In one month alone I experienced 3 re-structures with a different manager and different team to work in basically every week for that month. Thousands of my colleagues lost their jobs through her re-structures – which were always done in small batches (so as not to attract attention) and were almost always done just before Xmas so they could start ‘afresh’ in the new year. She was ruthless – and stupid to boot. Good riddance!

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  8. david (2,563 comments) says:

    davidp surely you mean “overpaid motorcyclists”?

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  9. TripeWryter (716 comments) says:

    Her publishers are doing extremely well in promoting her book. I’m sure we’re going to see wall-to-wall Theresa for the next two-three weeks.

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  10. Put it away (2,880 comments) says:

    Wow she was able to make a large profit out of a monopoly. And when she did try to have an idea, the result was Ferrit.

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  11. petal (706 comments) says:

    She hollowed out the pumpkin and then gives Reynolds a hospital pass and then blames the government of the day. Duplicitous b****.

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  12. Redbaiter (13,197 comments) says:

    The political mood of the moment is that women should be promoted regardless of ability. This is a policy that has led to rank mismanagement of so many of our private and public businesses and institutions.

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  13. francis (712 comments) says:

    lol, don’t imagine sales figures would be very good for a book that said “I was the happy beneficiary of a monopoly environment and Reynolds, who is struggling to come to grips with an entirely new business scenario, doesn’t have that luxury.”

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  14. cabbage (457 comments) says:

    Red, I totally agree with you.

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  15. Tassman (234 comments) says:

    What a selfish cry! She should be promoting the company in the interest of the people instead of me me me me attitude. And obviously she wouldn’t have done any better and still a waste of tax payer money for such high wages… Sack the whole lot and let a public servant run it.

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  16. Manolo (14,059 comments) says:

    “Sack the whole lot and let a public servant run it.”

    Really? Do that and NZers will go back to have to wait months for a telephone line, let alone broadband services.
    The less interference from the state, the better we are.

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  17. peterwn (3,307 comments) says:

    I would add to this Dr Deane’s regime too, especially as he became Chair of the Board after being CEO (IMO the Board should have kept him right out of it after he ceased being CEO).

    This was the problem with Rogernomics in practice. Both ECNZ (who initially owned virtually all electricity generation and the grid) and Telecom had such a big stranglehold on their respective areas that it was easy to run them as monopolies and raise barriers against competition. And that is just what Dr Deane did with both organisations. As The Government owned ECNZ it was able to break the monopoly hold by splitting it up and putting the grid (via Transpower) in a neutral position.

    With Telecom, Dr Deane came on board when the Government sold Telecom. The new owners wanted to make a quick buck out of it, dumped Peter Troughton (who was aiming to provide to decent economic communications network for NZ) and hired Dr Deane to run it as a fortress monopoly as long as Telecom could hold competitors and the Government at bay. This IMO caused significant damage to the NZ economy since Telecom leeched significant sums from NZ people, business and commerce which were far higher than the cost of actual services supplied.

    Sarcastically, my heart bleeds for Teresa – she took the job on at the offered salary and can hardly blame the Government or customers for her personal woes. Her big mistake IMO was taking the job on under Dr Deane’s shadow. This added a dimension of difficulty to the job which she could have well done without.

    Things were not helped by the negative portrayal of Post Office telecommunications staff in Richard Prebble’s ‘I Have Been Thinking’ book. They had struggled for decades endeavouring to provide NZ with a decent telecommunications service on an extremely limited capital outlay, and had pretty well succeeded by the late 1980’s (soon after an automatic exchange was installed at Lawrence in Otago and Great Barrier Island was linked to Warkworth exchange eliminating the several small part-time manual exchanges there thus making the NZ network fully automatic). Many of these people undertook their duties in an efficient and diligent manner within the context the Government had set them (limited capital and the Government’s desire fot its agencies to mop up surpluses in the workforce) and were deemed to be ‘unsuited’ for working in the post Rogernomics work environment. The same people also had to contend with many bureaucratic strictures imposed by those with no incentive to help get things done as there was excessive emphasis on ‘control’.

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  18. oob (191 comments) says:

    mickysavage
    Gattung is a poor apologist for a private monopoly. David Cunliffe’s work unbundling the local loop was vital and the only way that broadband penetration was going to increase. This Government’s putting the break on his broadband challenge has slowed things down and its own broadband project has either wittingly or unwittingly rebundled the local loop.

    It is just bizarre to watch the Labour scum sing off the same songsheet. It really is the case that apparatchiks like mickeysavage regurgitate the misleading agitprop soundbites fed to them by the Labour party commissars.

    In the above revisionism from mickeysavage, we're supposed to forget that Labour's Paul Swain did a shabby little deal with Telecom to preserve their Local Loop monopoly in 2003.

    -Despite the 100,000+ Kiwi signatories to the LLU petition.
    -Despite the evidence of all of the rest of the OECD, except Mexico.
    -Despite industry best practice and expert advice.
    -Despite common sense.

    The facts are these: a decade ago the key digital penetration metric was dialup users per head of population, where NZ topped out at about number three or number four in the world, behind several of the Nordic countries. Now, a decade later, where the key metrics are broadband users per head of population and broadband speeds, NZ is at the bottom of the OECD.

    Labour presided over New Zealands slip into the digital dark ages.

    [DPF: It wasn’t Swain who did the dirty deal. He oppossed it and recommended LLU. Clark did the deal after meeting with Theresa]

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  19. Jack5 (5,156 comments) says:

    Let’s not forget that about $2 billion of shareholder funds, including tens of thousands of NZ “mums and dads”, were in effect confiscated by Cunliffe-Labour’s unbundling of the copper network. The network had been sold by an earlier Labour Government. To have been fair, democratic, and not confiscatory socialism, the copper network should have been bought back from Telecom.

    For competition sake, the actual copper network could have originally been retained by the state, as the electricity grid has been. But to sell it and then in effect partly confiscate it later, especially without any compensation, was rampant socialism.

    Like farmers who often seem to want capitalism for everyone-else and socialism (albeit a mild form, co-operatives) for themselves, some gung-ho internet entrepreneurs seem to favour free-market capitalism for everyone but themselves. This includes frowning on state involvement in other sections of the economy but praise for heavy state and local government involvement in fibre-optic broadband.

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  20. campit (467 comments) says:

    Be interesting to see how she spins AAPT, probably the biggest corporate write-off in New Zealand history.

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  21. s.russell (1,646 comments) says:

    francis, peterwn, excellent points.

    Gattung used Telecom’s dominant position to screw Kiwis out of as much money as possible for the least investment she could get away with. That was her job, and her responsibility as a servant of shareholders.

    The blame for Telecom following that strategy lies with the Government, which created the environment which made it possible. When Maurice Williamson was minister in the 90s he failed to fix the problem. Labour eventually bit the bullet with unbundling, and deserve some credit for that.

    Naturally, Telecom shareholders feel aggrieved. But as a Kiwi, I prefer a more level playing field, and real competition.

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  22. MikeNZ (3,234 comments) says:

    she cries crocodile tears to help publicise the book tour.
    Just another another income stream.
    She got her salary and her pay off whilst the little people got screwed by her policies.
    Lets move on to someone who is actually interesting David.

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  23. freethinker (694 comments) says:

    Gattung more than Halved Telecoms share price in 8 years – typical socialist credentials. Perhaps Reynolds is worth his salary to clean up the Rotorua housewifes mess!!

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  24. Redbaiter (13,197 comments) says:

    “But as a Kiwi, I prefer a more level playing field,”

    A good post spoilt by an attempt to connect patriotism to idiot socialist “level playing field” doctrine.

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  25. Jack5 (5,156 comments) says:

    freethinker posted at 12.42

    ..Gattung more than Halved Telecoms share price in 8 years – typical socialist credentials…

    Not true. The socialism came from the hijack of Telecom shareholders’ property rights with mandatory unbundling without compensation. That lopped at least $2 off Telecom’s share price, or half the fall from the present level.

    If there was a fault in Telecom, it wasn’t Gattung, but that of chairman Roderick Deane and his directors who ignored state threats that Telecom should more freely wholesale access to the copper network. They may have goaded Cunliffe and Klark and their fellow leftists, but it was the Labour Government that ordered unbundling without compensation.

    You can bet that no overseas investors are queuing up to put money into NZ fibre networks. Vodafone and Telstra (thanks to Clear) between them likely have near a billion dollars worth of accumulated losses on their NZ investments. Apart from the odd case of 2deg riding on free Maori spectrum, telcommunications companies don’t rank NZ as a prime investment country.

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  26. menace (402 comments) says:

    the wage of people in positions like this have gone up like 20 or 50 fold in the last 20 to 30 years, its discusting.
    while the real income of the lower middle class have as much as halved.
    globalization and the free movement of capatal.
    pay them or they will go work somewhere else in the world for it.

    is telecom its own true identity or was it simply absorbed by another global conglomerate and now just another subsidery??

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  27. peterwn (3,307 comments) says:

    s.russell – Agreed that was her intention, but was Dr Dean’s and her methods really in the best long term interests of shareholders, especially when the two American companies had sold out to mums and dads.

    The only reason the traditional landline phone service is surviving so far is that telecommunications providers often ‘staple’ phone service to other services like Broadband and because the Baby Boomers and early Generation X are still used to landline phones. Landline phones are probably almost irrevelant for Generations Y and Z. To think that modern kids have never used rotary dial phones let alone wind-up phones or seen B&W TV.

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  28. Rex Widerstrom (5,354 comments) says:

    petal says:

    She hollowed out the pumpkin and then gives Reynolds a hospital pass and then blames the government of the day.

    Well said, petal. Though let’s not forget (and I see DPF has helpfully reminded us above) that Helen Clark walked over the top of Paul Swain and did a deal with Gattung to the detriment on NZ telco customers, so she’s right in blaming the government of the day – it’s just the previous day.

    Theresa Gattung thinks someone’s paid too much, and Labour thinks she’s candidate material. Any minute now we’ll see the White Rabbit.

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  29. Poliwatch (335 comments) says:

    “Ms Gattung told the Herald politicians deserved much of the blame for Telecom’s latest woes.

    She said she predicted in 2007 that the Labour Government’s decision to give competitors access to Telecom’s exchanges, and to split the company into three divisions, would result in a “train wreck”.

    So why did Telecom take the course of negative action they did, rather than acting positively to what they knew was inevitable?

    An interesting aside is the response from reynolds when asked if he was having to live with past poor decisions – a diplomatic non-answer.

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  30. reid (16,633 comments) says:

    “An interesting aside is the response from reynolds when asked if he was having to live with past poor decisions – a diplomatic non-answer.”

    Yeah he just has to shut up and take the six+ mill for a few years.

    Poor bastard.

    If he really was worth six mill, you woulda though he might have been able to turn the ship around in the time he’s had. I mean if his hands really are tied and he can’t possibli do anything because the govts just a big meanie then why not just get the local dustman to do the job @ $30k?

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  31. Johnboy (16,994 comments) says:

    I can only refer to a previous comment of mine.

    http://www.kiwiblog.co.nz/2010/02/trade_me_auction_of_an_xt_phone.html#comment-664973

    I mean he looks like a skinny Robbie Coltrane. :)

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  32. tvb (4,508 comments) says:

    The splitting of telecom followed international practice for all phone companies. For Gattung to ignore that and weep and wail about the loss of her monopoly just shows that she really was not up to the job. She’s essentially Roderick Dean’s protege and once he went she quickly followed. In her own way she is quite good though her career has not exactly bloomed since. Her sour little book shows she is still obsessing about Telecom so I assume she will continue on the shelf career wise for some time to come.

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  33. wreck1080 (3,961 comments) says:

    Gattung ran the monopoly component of the company very well, yet on an unsustainable path.

    However, you may ask, how did the competitive components fare? Competition shows the true ability of a CEO…. Competitive telecom owned businesses include……

    AAPT
    Ferrit
    Cellular

    AAPT lost a heap, Ferrit got canned after spending a heap, and as for cellular, how did they lose so much market share?

    Doh!

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  34. lastmanstanding (1,300 comments) says:

    Fact is folks the citizens were screwed over by the old Post Office telco who were a bunch of incompetents

    In the late 1980s early 1990s they were replaced by a group of Government aided and abetted screw over merchants.

    So the punters have been screwed over since by a cynical bunch of bastards all lining their pockets and laughing at the dumb arse citizens whose government have aided and abetted and continue to aid and abet the incumbents.

    Geez they piss themselves laughing into their beers every Friday night ay how you dimb bulbs buy their bullshit

    Remember littles Thereses ‘CONFUSION MARKETING” Paul R aint no different. Hes taking us all on a ride

    He doesnt have a plan Hes a muppet in a suit paid to take the crap of his waste of space Board who are an incompetent job lot.

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  35. jaba (2,146 comments) says:

    I would love to read a Mike Williams book but there is no way on earth he will admit to the appalling tactics he used during his time as a Labour flunky or where the so called bodies are buried.
    Paul Holmes did a piece in the Sunday Herald awhile ago about his mate Williams where he cited a story about lying to the people of Hawkes Bay suggesting the National would charge Hasting/Napier people for land-line calls to each other. The fact that it was a lie didn’t stop the people of believing him and the favorite nat bloke lost.
    ps .. I think Theresa Gattung is cute and seems to have a bubbly personality .. this has nothing to do with Telecom but there you go

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