The big story of the day – the week – hell, even the year, is of course the sudden and catastrophic collapse of Mainzeal. From what we have heard so far, this is going to echo around the country and cause much misery for quite some time yet. Described as the third biggest construction company after Fletcher and Hawkins, Mainzeal has been around and survived the 80s crash, the 90s depression, the 00s boom and bust cycle, but has been brought down by the old chestnut of bad management. Having a no-hoper like Jenny Shipley on the board probably didn’t help (as one of New Zealand’s worst ever PMs, why would you ever bring her onto a construction company board?), but I think we will find that the real reason lies with the parent company Richina Pacific, and it’s overlord Richard Yan. The newspapers and magazines will uncover reasons on that over the coming weeks and months – but Richina always seemed like a bad choice of bedfellow for a construction company. Leather goods and Chinese tourism don’t sit comfortably with concrete and glass.
For now though, it will be a battle for many in the construction industry to see if they can survive. The other big boys are not immune either – Fletcher Construction has been really feeling the pinch over the last few years as well, with a slow but dramatic reduction in staff numbers, but they are heavily involved in the Christchurch rebuild and tied into government-backed projects in the millions. Fletchers basically built this country – they provided the first state houses, they built the dams that power us, they built much of the cities of Auckland and Wellington, and if they ever went bust I think we may as well just all go homeland not come back in the morning. Hawkins I’m not so familiar with – never had the pleasure of working with, although a colleague of mine said they were the worst, most incompetent contractor he had ever had the displeasure of working with. Still, obviously, more competent than Mainzeal, who just suddenly disappeared down the gurgler on Waitangi Day.
Still, you live by the sword, you die by the sword. Mainzeal is full of nice people now, who will be thrown into confusion and misery by the collapse, but back in the 80s Mainzeal used to treat others like dirt and grind their suppliers into the ground on a fairly regular basis. Still, as Dave O’Donovan, the former head of Mainzeal in Wellington said to me a while back, they wouldn’t survive in today’s market with an attitude like that any more – if you burn all your friends, you won’t have any friends any more. Those nasty, back-biting Chase Corp era people have moved on long ago, and Mainzeal has proved itself to be a worthy competitor to Fletcher Construction over the last decade or so. I’m hoping that the receivers will be able to pull it around, and resuscitate its corpse, as we need companies like this to succeed, not to fail. To have hung on as long as this, through the worst, most dull and boring recession and most stupid government, and then to collapse on the brink of the next earthquake-driven construction boom sounds like more than just bad luck and poor management to me.