If government’s the answer you’re asking wrong question

Adam Smith at Inquiring Mind has a series of posts bringing letters to the editors of various publication to the notice of the blogosphere.

From a Parallel Universe # 15  is from the  Waikato Times – 10 January

Time to resign?

After this week’s news regarding Fonterra is this another litany of lies?

I believe it is time for John Key to intervene in the interests of New Zealand (as Helen Clark would have already, I believe). Henry van der Heyden and Andrew Ferrier should resign before the whole New Zealand economy goes down the drain.

JOHAN MARINUS DE WIT
Hamilton

Adam initially thought it was black humour but then decided the writer was serious.

I hope his initial reaction was right but I too fear it isn’t and Adam provides various acts of foolishness by the previous administration which might incline people to believe government intervention in private businesses is normal.

But the writer is not only politically misguided, he’s also worrying unnecessarily about Fonterra.

The Sanlu investment was a disaster and the management and directors may still have questions to answer over that; and the milk payout, already well down on last season’s, is likely to go lower.

But the company has already written off  Sanlu, last season’s payout was a record, the drop is largely the result of international commodity markets and even if it drops below $5 it will still be above the longterm average.

The world is in a financial mess and New Zealand is in recession but Fonterra is not in crisis and even if it was if the government was the answer you’d be asking the wrong question.

6 Responses to If government’s the answer you’re asking wrong question

  1. macdoctor01 says:

    Agreed, HP. Fonterra may be a long way from perfect, but they are also a long way from bankrupt. And much as I dislike Andrew Ferrier’s handwringing on the SanLu issue, he is still a good CEO.

    Like

  2. showmethetaxcut says:

    One suspects that Mr de Wit simply likes to see his name and comments in the press without giving to much considered thought to the implications and stupidity of his comments.

    Like

  3. Colin E McIntyre says:

    Sorry—But anyone who doesn’t realise the extent of Fonterra’s troubles hasn’t got out of the homepaddock.

    But cheer up, arn’t we all in the same predicament ? especially if Dr Bollocks lowers the exchange rate further?.

    Regards to all.

    Colin E McIntyre

    Like

  4. Colin E McIntyre says:

    Sorry, In my haste should have said Offical Cash Rate rather than exchange rate .

    Must away to load some sheepmeats onto the trucks before we suffer the same fate as Fonterra.

    Like

  5. adamsmith1922 says:

    HP

    To some extent I agree with Colin above, there are some problems which Fonterra needs to address

    regards Adam
    PS That still does not excuse the asinine letter which I quoted

    Like

  6. significanthazard says:

    NBR report 14 Jan 2009

    “Fonterra eyeing a back-to-basics strategy”

    “Fonterra wants to double its added-value returns to farmers 50-80c a kilogram of milksolids by 2011, and at the same time reduce the company’s 55 per cent debt-to-equity ratio to 40-45 per cent.”

    “The company’s chief executive Andrew Ferrier hopes to do this by going back to basics, producing “low cost, high quality milk”, the National Business Review (NBR) reported.”

    FONTERRA is a joke!

    Like

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