PMs negotiating with corporates

October 30th, 2010 at 5:30 pm by David Farrar

A Dim-Post reader asked:

When was the last time a directly negotiated with a multinational?

In the comments, Matthew Hooton made an interesting point:

All prime ministers meet often with executives from multinationals who tell them what their intentions are in NZ and what policy changes if any might encourage them to increase (or decrease) their investments here.

Prime ministers might then comment on that, or get their ministers to, and a letter might be sent back, and there might be a further letter … or the ideas raised in the meetings might just get integrated into future policy development without acknowledgment.

This is not only to be expected but essential given NZ’s low savings rate and dependence on foreign capital.

However, as far as I can remember, the idea of a prime minister being in the room, looking them in the eye, negotiating backwards and forwards, over a short period of time … well, as far as I know, that is extremely unusual, mostly because of the sheer political recklessness of it. If it goes wrong, you as prime minister are in the room when it goes wrong and are therefore accountable.

The situation we’ve seen this week relies on:
1. The prime minister believing themselves capable of carrying out the negotiations
2. Their staff believing their prime minister to be capable of carrying out the negotiations, so not scheduling things to prevent it
3. The prime minister in fact being capable of carrying out the negotiations when they began
4. The prime minister being prepared to carry out the negotiations (ie, not being so haughty as to think such negotiations were below his or her station.)

In my view, only Key, of recent PMs, gets four yesses to these questions.
Clark would have been yes, yes, yes and no.
Shipley would have been yes, yes, no and no.
Bolger would have been yes, no, yes and no.
Moore would have been yes, no, yes and yes.
Palmer would have been yes, yes, no and no.
Lange would have been yes, yes, no and no.
Muldoon would have been “The SIS has got pictures of you and I’ll change the law to make you make the movies here.”

Heh that Muldoon theory is on the money.

Anyway let us look at those suggested qualities one by one, according to Matthew:

The prime minister believing themselves capable of carrying out the negotiations – all of them

Their staff believing their prime minister to be capable of carrying out the negotiations, so not scheduling things to prevent it – Key, Clark, Shipley, Palmer and Lange but not Bolger & Moore

The prime minister in fact being capable of carrying out the negotiations when they began – Key, Clark, Bolger and Moore but not Shipley, Palmer and Lange

The prime minister being prepared to carry out the negotiations (ie, not being so haughty as to think such negotiations were below his or her station – Key and Moore but not Clark, Shipley, Bolger, Palmer and Lange

It’s an interesting analysis.

Tags: ,

35 Responses to “PMs negotiating with corporates”

  1. Grant Michael McKenna (1,159 comments) says:

    I believe that Ms Clark would have been willing to negotiate, depending on what was on offer.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  2. dad4justice (8,137 comments) says:

    “I believe that Ms Clark”

    The old bat is called Miss Klark.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  3. kino flo (82 comments) says:

    With regard to Muldoon and the SIS, I wonder if the spooks were trying to listen in to the Warner Bros execs while they were in town.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  4. DavidR (102 comments) says:

    Only by idiots, Dad

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  5. jaba (2,137 comments) says:

    I would say that Key, not Dame Helen, is the sharpest PM we have had for a long time, maybe ever. The biggest threat to him being a great PM, is the ACT and Maori Parties.
    Don’t forget, Dame Helen has never had a job in the real world and the like of Warner Bro’s would have spat her out (no sexual connotations meant).

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  6. dad4justice (8,137 comments) says:

    “Only by idiots, Dad”

    Are you talking about Miss Klark or Mr Davis or Judith Lizzard or Justice LAX Potter or keystone Rob Dope?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  7. Loco Burro (32 comments) says:

    “Are you talking about Miss Klark or Mr Davis or Judith Lizzard or Justice LAX Potter or keystone Rob Dope?”

    No I think he is referring to you and your idiotic misspelling of names to score some obscure twisted point, just a guess though.
    Probably Clark would have negotiated, but would have exhausted a few more options first. Key (actually his staffers) see a PR win and jump on it, nothing else really matter, it worked this time, but it’s hardly a sensible strategy for running a government.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  8. DavidR (102 comments) says:

    Idiots think that it’s clever to call Helen Clark, ‘Miss Klark’.

    It might’ve been funny once, but it’s not now – there’s no joke like an old joke is there Dad?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  9. dad4justice (8,137 comments) says:

    The joke will be on her when the truth finally emerges but I don’t think John Wimpish Key will ever spill the beans.

    And all the corrupt pollies carry on the lie.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  10. Rex Widerstrom (5,349 comments) says:

    If Matthew’s around I’d be interested in his reasons for believing Shipley, Palmer and Lange wouldn’t have been capable.

    Shipley would have been unwilling to be flexible, but given the way we’ve been bent double by Warners that might not be a bad thing. And she’s gone on to prove her ability in business on various boards etc (and I say that much as I dislike her on a personal level).

    Palmer would have taken exponentially longer to get there but he would have done so, and again I think would have given the details more scrutiny than they appear to have been in this instance.

    And Lange, well… have we ever had a PM more “Hollywood” than Lange? Provided Pope wasn’t telling him that Warners were evil exploiters of the working classes etc., he’d have struck a good deal, I feel.

    I think he’s got the “haughty” roster about right, though again I’m not sure of Lange’s inclusion on it. I can’t imagine him negotiating just any deal, even if it were potentially worth more than this one, but the high profile, the sense of crisis (and chance to “save the day”) and again, the fact it’s Hollywood… I can see Lange being in boots and all.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  11. Roflcopter (455 comments) says:

    I’m surprised that with all this talk about being bent over the desk and shafted, the media haven’t ask Chris Carter for his view (no i don’t mean he was outside in the garden peeking through the window).

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  12. Falafulu Fisi (2,179 comments) says:

    Not PC blog has a good idea.

    Subsidising” Hobbit enterprise? Sounds like a great deal

    Perhaps John Key can read it and give it some thoughts.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  13. tvb (4,361 comments) says:

    I hope the spooks were listening to the Warner executives and kept the PM well briefed. I understand this is done in circumstances when the Country is directly involved. Lange would have been a disaster but it would have been hugely entertaining. I remember a story when a pompous UK military man fully kitted up in a dress Military Uniform was in Lange’s office. He was holding his ceremonial hat and Lange dropped a coin in it. That was well deserved, Lange handled that beautifully.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  14. tvb (4,361 comments) says:

    PS John Key is a very confident man he is not put off by ultra fussy officials trying to put the PM off by saying are you really sure PM you want to do this. It would be a courageous thing to do. Most of out PMs have lacked confidence – especially Bolger.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  15. NX (504 comments) says:

    3. The prime minister in fact being capable of carrying out the negotiations when they began

    Given how tightly controlled Clark ran things (thanks to H2 sticking the boot in when necessary), I dunno if she could handle these types of negotiations with so many variables were up in the air.

    I suspect John Key would’ve negotiated bigger deal during his time at Merrill Lynch…. so IMO, he has really proved his worth on this one!

    In my opinion, Clark continues to be overrated as PM, & John underrated. However, I think John is all the better for it.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  16. bhudson (4,738 comments) says:

    My opinion is that Matthew Hooten is pretty spot on. I would probably add an asterisk to Clark’s ‘no’ and add that it probably isn’t haughtiness, more a perception on peering. Not because the negotiation was ‘beneath’ her but that an PM should be meeting with the most senior executive and not senior negotiators/lawyers.

    [I don't think that quite convey's the intent quite right - it's not an inherent 'snobbishness' with Clark, its more of an organisation hierarchy thing. Often (but not always) it is the right thing to do - to break it undermines those beneath them in the eyes of the other side.]

    The most important point in all of this, which is assumed as read by all I think, but not often stated, is that Key was so naturally right for this because it was his ‘day job’ for years. And he dealt with sums & stakes greater than this transaction.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  17. jaba (2,137 comments) says:

    anyone, country/company, dealing with NZ and the Govt in particular, do profiles on who they will be dealing with. Warner’s would have checked out Key and worked out that he is no schmuck and was someone that they could understand in the business world .. thank god for that. Who knows what the Goff-Father would have done.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  18. reid (16,290 comments) says:

    Staff, meh. Not a [real] factor.

    Not a bad analysis though. Moore is under-rated, he would have been quite capable in his day, as would Lange, were it for an extra bit of aid for the South Pacific. Bolger would have an outside chance.

    Clark would have screwed it right up.

    Only Moore and Key would have thought of putting the ad into the DVD. That was a master-stroke.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  19. slightlyrighty (2,471 comments) says:

    Imagine if Cullen had been in charge of the negotiations… If his work on Kiwirail had been any indication we would have paid 600 million for a movie worth half that.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  20. Viking2 (11,412 comments) says:

    Pity Hooton didn’t include Deputy PM’s. clearly Cullen would have done a great deal. yes,well look at the deal he did with toll.

    REX; Tell us all how the companies Shipley has anything to do with are world beaters. Mainzeal???? I mean about to die.
    Same for her mate Rchardson. Most of her efforts are up to their ears in the crap.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  21. Viking2 (11,412 comments) says:

    jaba; credit Goff with something between the ears man. He has been doing overseas negotiations for long time and has some significant ones to his credit., same with Moore. Different to this maybe but in the same league.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  22. BeaB (2,118 comments) says:

    dad4justice So are you a wimp too if you won’t spill the beans as clearly you know something, or think you do. Too scared? Not sure of your facts? Come on, don’t be coy. Man up and fess up.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  23. dad4justice (8,137 comments) says:

    Yeah right bb.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  24. big bruv (13,718 comments) says:

    Yeah, come on D4J…what is it that you want to tell us?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  25. tvb (4,361 comments) says:

    I do not think Goff has any successful international deals to his name. Name them. He is basically a school teacher who cannot run his party – look at the Carter mess. No one has mentioned Bill English. Another academic type who cannot negotiate his way out of a paper bag.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  26. Mark (1,480 comments) says:

    There are some interesting precedents here that many people are happy to ignore.

    1. A labour law change to satisfy the demands of a foreign corporate. This is dangerous territory but in this case one that suited national at a philosophical level. In the end not a big concession but big implications across the board for workers where casual labour is the norm or work is project based.

    2. Tax incentives and large ones favoring one industry group over another. I would prefer to see a tax reform that lowered company tax for everyone. It may be interesting to see whether other corporates are prepared to use similar tactics as WB and if they did whether they would get away with it.

    3.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  27. slightlyrighty (2,471 comments) says:

    Goff may have something between his ears, but where is his spine? In his political career we have had Goff the New Economist supporting Douglas, Goff the Third Way champion supporting Clark, and now Goff the Unionist supporting the CTU.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  28. JC (949 comments) says:

    Key was the right man at the right time..

    But there is another reason he did it that I haven’t seen mentioned. Key did the deal and then rushed off to the 16 member East Asian Summit.. soon to be joined by Russia and the US… he’s talking trade.

    Now, what do you expect the Hobbit adventure will do for Key’s credibility on business, trade, foreign relations and decision making with all those booming Asian economies?

    I’d suggest Key just hung out a great big sign saying “New Zealand.. Open For Business”, and, “We Can Make It Happen!”

    It never pays to underestimate Key’s eye for the deal, and doing the logical thing.

    JC

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  29. tvb (4,361 comments) says:

    Jaba the NZ Govt would have done the work on the Warner people. I would not be surprised if Premier House was fully wired. Why else hold it there.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  30. david (2,556 comments) says:

    Clark would not have got within a mile of face-to-face unless a deal had been previously stitched up by H2 and had been assessed as risk free to Clark. No way could this have become risk free as the Union Movement was effectively the “opposition” and she would never have publicly shafted them.

    More likely she would have sent in Trevor Mallard with Heather holding his hand and any positive outcome would have been ” The Labour-led Government has decided to support struggling actors by increasing the tax break for high budget films ….” etc etc.

    Helen (like Pilate) would have had clean hands and deniability ‘cos someone else could have been lined up to take the fall if it became domestically unpalatable to special interest groups.

    That is all

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  31. david (2,556 comments) says:

    JC it also provides the reason why there was a strict time limit on closing the deal. Key may well have said – Here is the deal, it is good for 24 hours, I’m off tomorrow and there is no-one else to deal with, Decide.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  32. tvb (4,361 comments) says:

    Helen would have sent in Trev and Michael Cullen. The sticking point would have been the Unions. Warners would have screwed megabucks out of them because of that. The talks would have failed probably, John Key leveraging some tourist promotion was pure brilliance but I concede Mike Moore might possibly have done that as well.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  33. JC (949 comments) says:

    “John Key leveraging some tourist promotion was pure brilliance but I concede Mike Moore might possibly have done that as well.”

    Now there’s a talent and (WTO) experience grossly underutilized these past ten years.

    JC

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  34. joana (1,983 comments) says:

    Was it really a negotiation? It seemed more like a capitulation. Holywood wideboys are now telling our govt what to do..They were met at the airport as if they were leaders of a country.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  35. BeaB (2,118 comments) says:

    Joana – surely you can’t be that naive. I am sure Hollywood and John Key knew exactly what they were doing and what would be the outcome. That’s the way these things work.
    I think you are allowing your opposition to National affect your brain.
    When you find yourself using any version of the ‘thin end of the wedge’ argument, stop and take a deep breath.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote

Leave a Reply

You must be logged in to post a comment.