SUNDAY EXPRESS

October 19, 1997

Pages 12, 13

His office is neat, his desk uncluttered. A few family photos and two Louison paintings of racing yachts he once owned adorn the wall. His mood is reflective. He speaks in a low tone but his 73-year-old voice commands full attention when he spins vivid tales of a young man who bought a stake in his first sailboat, Sinbad, for $15.

His elder brother had put up $100 and a younger sibling $5. Despite their disproportionate contributions, the three brothers held an equal stake in the $120 sailing boat, one of his early passions.

Born to an engineer father and a housewife mother, business legend Sidney Knox is the second of three boys and two girls. He grew up quickly. "A brash young man" was how he described himself in his boyhood days.

At age 17 and a half, Knox signed up with the Royal Air Force, going off to a wintry cold Canada for his pilot training. He used to joke with his friends in the Air Force that people had to be certified to live in Canada.

"I used to tell my friends I know why Canada is underpopulated. Human beings were never designed to live here."

He's not comfortable talking about the private Knox. He shrugs off his wartime escapades as an "interesting experience". Trying to get him to talk about his experiences as a pilot during World War II is like pulling teeth.

But curator of the Military Museum in Chaguaramas Gaylord Kelshall confided that Knox was part of the Sixth Airborne Division in the famous crossing of the Rhine in early 1945.

He piloted wooden gliders loaded with ground transport (mostly jeeps), guns and troops, which were towed into battle by an old four-engine transport or bomber aircraft over Berlin and other European territories which were German-occupied. Knox also served as an airforce officer on the ground.

Kelshall says the gliders would go in on a mission with the Germans shooting at them the whole way down. Of the 100 gliders (each one carrying a squadron of 30 men) that crossed the Rhine under a barrage of gunfire, 44 glider pilots were killed in battle.

And of the 250 Trinidadians who fought in World War II, 50 were killed, their graves stretching from England right up to Berlin, said Kelshall.

All Knox would say of his days in the cockpit of a fighter plane or behind the controls of a Horsa or glider is that "you do a lot of crazy things in war".

He lost a lot of friends in battle. But he has fond memories of pub-crawls across Europe and of a young man's masquerade of being much older than he was.

Before the war was over, however, Knox was more man than most men twice his age. By the time he came home, he felt like he'd lived a lifetime. He tried for a job with BWIA (flying was his second passion) but back then the airline had only a few aircraft.

Deciding he couldn't wait forever for BWIA, Knox found work with Joe Fernandes, starting from the bottom up.

In 1953, he met Charles Massy, a co-founder of Neal and Massy Engineering. He joined the ranks of N&M as a sales representative. Fourteen years later he was joint managing director.

Knox boasts of not having inherited anything. "I certainly started from scratch," he said in an interview. "I feel good about that."

Self-tutored in the fundamentals of business, Knox attributes his acumen to his ability to listen and ask questions. He learned fast in the school of hard knocks.

A hard-nosed man of business, who doesn't dither, Knox says he learnt some of his most valuable lessons from international strategists and joint venture partners.

A daredevil behind the controls of the gliders he took behind enemy lines and in the corporate boardroom, the young Knox raced cars and fast boats and hunted new business acquisitions with such a passion that before long he had Prime Minister Dr Eric Williams talking about "sharks and sardines".

As a rising executive in the Neal and Massy group, he hobnobbed with the influential, and made business forays into Latin America and the Caribbean that left his competition in the wake.

He developed a reputation as a tough, shrewd strategist: buying cheap, selling dear and walking away from deals when the price moved upward.

Knox was nicknamed "General Bullmoose" after the no-nonsense Al Capp caricature of the bossman of General Motors in Detroit. It's a nickname he's long been aware of and finds "amusing". He wielded extraordinary clout as head of the Neal and Massy Group, engineering takeovers and out-bidding and out-maneuvering shareholders (one of them was Lawrence Duprey's Clico) with a voracious appetite for a controlling interest in the Port of Spain conglomerate.

He piloted the Neal and Massy group to the heights of business success. Twice during a remarkable career at N&M that spanned nearly half a century, in 1984 and again in 1994, Knox faced down angry stakeholders and critics with a restructuring plan to revive the conglomerate's flagging fortunes.

In the 1980s, when the oil money dried up, Knox moved ahead of the corporate pack, unloading assets, slashing staff and running a severely lean operation to get the N&M group out of a liquidity crunch that was toppling giants such as Stephen's and Johnson's, Kirpalani's and Woolworth.

Knox's rule of thumb - keep a sharp eye on international trade - had paid some early dividends. He saw the recession coming and made a pre-emptive strike before his stock prices hit the floor.

His comeback strategy of the 1980s cost him millions, but he is the first to concede that closing loss-making subsidiaries carries a hefty price tag, including severance benefits. But he insists, "You got to treat people right."

His critics say N&M's top brass behaved as though the good times would last forever. "They got caught with their pants off," said one analyst, noting that the group got "too big, too soon".

But Knox holds shifting economic policies and trade liberalization responsible for the unraveling of the Neal and Massy empire. In the days of plenty, when high interest rates were a fixture, the group borrowed heavily to finance investment infrastructure such as its motor assembly plant in Arima and new acquisitions.

Knox hooked into a government plan to build low-cost housing, lending the N&M name to several developments in the east, including Santa Rosa, Maloney and La Horquetta. The developments filled a critical need for housing in the east and saved many N&M workers at the Arima motor assembly plant the long commute on traffic-congested roads.

When trade liberalization came, N&M was hard-hit but, thanks to Knox, remained a key player in the game.

Knox was pragmatic. "You can't cry any more about it," he said, citing the loss of N&M's prized motor assembly plant. "You just have to write it off and revert to the motor dealership side of the business…You take your loss and move on."

The longtime boss of N&M readily concedes that he has taken plenty of licks for taking the group through two restructuring operations.

"When you are doing something like this, understand well that everybody's shooting at you."

Knox, who made it clear early in the game that failure was not an option for N&M, said the group had picked up any number of business rivals over the years, all of whom would have been delighted to see the mighty N&M empire crumble.

"Every one of them would love to see us die," he said, a contemplative look on his face as he mulled over N&M's two financial near misses.

Neal and Massy limped into the mid-1990s with a huge debt, double-digit million-dollar losses and a string of loss-making companies. Not one to stand down from battle, be it bullets flying or stock prices falling; Knox unveiled a fast-track restructuring plan to improve returns.

The board's blueprint for overhauling loss-making firms has begun to show sturdy recovery. Knox is coy about the November figures but hinted that N&M's balance sheet will show some red-hot numbers.

He made plenty of big bets during his 44 years at N&M but they almost always paid off, even when the odds changed. Years ago, after reaching an agreement on the purchase price of George F Huggins, the chairman called him to say the firm had got a better offer from Geddes Grant Ltd.

He reminded the chairman that Huggins had signed an agreement with N&M and questioned the company's ethics win going after a higher offer.

"He said he didn't, but one of the other directors did and that's a fact of life. He said, could I match them. I said no. He said, so you are going to walk away from it? I said yes," said Knox, adding that as the took his leave, he made a parting shot: "Well, maybe one day we'll buy Geddes Grant - and that's how we'll get you."

He said he had no idea at the time that he would later make good on a threat uttered out of pique.

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On November 30, business magnate Sidney Knox will bid farewell to the conglomerate he and his team of executives built into a billion-dollar powerhouse.

In an exclusive interview with Sunday Express reporter Camini Marajh, Knox, a national award winner for his service to business, and holder of an honorary doctorate from UWI, talks about his passions; his days in the Royal Air Force during World War II; his dare-devil business deals; and the group's poor results in the mid-1990s.

Some highlights of the interview:

Oh yes, we saw it coming. The thing was, we had to come out of certain activities which cost us a lot of money. We also got hit with a double whammy: trade liberalization and the deterioration of the Jamaican economy. We took a heavy loss in Jamaica.

You know you are taking a bath by closing out, but you also know there are opportunities and results, and if you position the company right you can then invest in areas that are the right road to go as a result of globalization.

Our plan I to get out of the businesses that don't make sense in a liberalized market and get more involved in the energy business and in services of all kinds.

The outlook is very good. We have accomplished what we set out to do in restructuring. The company is on track, which will lead to substantially improved profits in the future.

Our annual report this year is going to show tremendous change. It will be a pleasant surprise for a lot of people.

At the annual general meeting last December when we were taking a loss I told shareholders, "You're in for a pleasant surprise." I don't know how many of them went home and believed that, but that is exactly what happened.

Politicians have their own reason for saying things - that's politics.

But you know, I'd tell you something about politicians. They'd stand on a platform and say something and three days later they are calling you to do something for them. This was my experience many years ago.

You have to be big enough to understand the game they are playing and let it run off your back.

Eric (Williams) started the game of sharks and sardines and I remember once … he called me to his office. He was about to start the National Commercial Bank.

I went in and he said, "What have you got against us now?" I said, "Nothing". He said, "Why do you refuse to come then on the bank's board?" I said, "To be very frank, Mr. Prime Minister, I don't feel like going on any board where some government minister is going to tell us who to lend money to."

He was a hell of a man. He looked at me and said, "Now if I guarantee you that no government minister or anybody is going to tell you what to do and you turn me down, don't ever criticize me for putting damn fools on the board".

I said, "Okay, Mr. Prime Minister, you win." He was a man I sometimes criticized, but he stuck to his word right down the line. I'd give him that.

All sensible governments go down the same economic route.

There is no problem with it really. Ken is a man I have tremendous regard for. He is a very forthright individual who stands on his principles and you've got to admire him for it; but you know you have a spat like that and it disappears in the smoke.

I think both sides will learn to respect each another. I don't anticipate any problems.

Panday is a brilliant individual. I am really pleasantly surprised. I never really knew him before, but since he has been Prime Minister I have to agree that the guy has an open mind. He is action-oriented.

I believe everybody has strengths and weaknesses. I don't think any of us can say we are without that but I feel on balance Panday is a pleasant surprise.

It is a simple philosophy. The private sector must work with the government of the day to build a better country. Our philosophy has always been to co-operate with the government of the day. Whoever individual employees vote for is their business. Elections come and elections go, and between that you have a country to run.

Not at all. The group is in very capable hands. I am very proud of the people who work for us. During this major downturn, no able man that we needed to keep ever left us.

I am pleased with Ken Gordon succeeding me. We have a top-class board and team of executives. I am very proud of the employees who had to go through the tough times.

They took criticism outside but were committed to the fact that the group was going to turn around.

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