BUSINESS

Halifax’s master dealer

CHRIS WOOD September 1 1986
BUSINESS

Halifax’s master dealer

CHRIS WOOD September 1 1986

Halifax’s master dealer

When Ottawa announced the sale of Crown-owned Canadair Ltd. to Bombardier Inc. last week, among the five rejected bids was one from a Halifax company little known outside Nova Scotia. I.M.P. Group Ltd. had offered $225 million for the maker of the Challenger executive jet, well above Bombardier’s $205-million purchase price. But IMP was unwilling to commit to keeping Canadair in the fixed-wing aircraft business—a stance that was unacceptable to the federal government. Kenneth Rowe, IMP’S ambitious, outspoken president and sole owner, accepted the defeat with equanimity. “Unless you get a deal you can make work, it is no good to you,” he said. Deals that work are Rowe’s specialty.

The long-shot bid for the Crown aircraft maker was characteristic of Rowe, 51, and the company he formed in 1967 from two failing foundries. Since buying out three former partners in 1974, Rowe has steered IMP to sales of $150 million a year at a sizzling average annual growth rate of 25 per cent. His bold style features a strategy of picking off weakened competitors through takeovers and then

ruthlessly pruning their losing ventures. Said the British-born former merchant seaman last week: “I’m motivated by money.”

Rowe has become an important business presence in Nova Scotia. He is increasingly well known nationally as well. Undeterred by his failure in the Canadair competition, next month

Rowe does not hesitate to dismiss managers, and in one company he ftred the entire management group in one day

Rowe will unveil a recently completed takeover of an aerospace company. Declared Gordon Lummis, executive vice-president of the Halifax Board of Trade during Rowe’s term as president in 1984: “He is demanding, harddriving, aggressive and very, very ambitious.”

For Rowe, having large ambitions is a way of life. When he was 25 and living in England, poor prospects of ad-

vancement led him to resign from the navy to accept a management berth with the Grimsby Coal, Salt & Tanning Co., a British company with scattered interests in marine supplies. Sent to Halifax in 1964 to take over the company’s drifting fishing supply subsidiary in the region, Rowe first restored Grimsby’s business, then in 1967 he seized an opportunity to go into direct competition with his former employer. With partners, he bought two weakened foundries and redirected them into marine equipment under the name Industrial Marine Products Ltd.—a company that now dominates the business.

In 1970 Rowe broadened IMP’S operations. He purchased a failing Dartmouth aircraft parts maker, which became the nucleus of a group of companies that currently service Canadian Aurora patrol planes and F-18s belonging to the Spanish air force. Other IMP divisions make high-tech internal wiring systems for aircraft and surgical and oilfield equipment.

After completing nearly a dozen acquisitions and successful company turnarounds, Rowe has a firm pattern of operation. “Our style is to put in strong management and control them,” Rowe told Maclean's. He does not hesitate to fire managers. In one newly acquired company Rowe dismissed the

entire management group in one day. In other companies, he has quickly cut unprofitable products. Said Rowe: “We are very good at chopping if we don’t see light in the tunnel.” Declared Steven Parker, president of Corporate Communications Ltd. of Halifax:

“They’re tough. They run tough deals.” But Rowe’s tough-guy image is balanced by a reputation for fairness. He enjoys the keen loyalty of his senior aides. “People like strong leadership,” he said. “I don’t expect to be popular.” Still, he commands growing respect in

Halifax as a forceful exponent of business views. Although Rowe’s opinions on public policy are right of centre—he feels provincial deficits should be outlawed—his image is tempered by a record of community service that includes acting as fund-raising chairman for a local hospital. Both Liberal and Conservative provincial headhunters have courted Rowe as a potential candidate.

For now, he appears more willing to concentrate on IMP’S expansion. But last week’s Canadair sale may raise an unexpected challenge to Rowe’s plans. IMP, with partners including Canadian Marconi Co. of Montreal and Spar Aerospace Ltd. of Toronto, is one of three companies bidding for a $1.7-billion contract to service Canadian CF-18 jet fighters over a 20-year period. Canadair is also among the finalists. Indeed, Bombardier sweetened its final offer for Canadair by promising to pay Ottawa a “royalty” of one per cent of the CF-18 contract’s value, should Canadair win it. Rowe last week branded the manoeuvre “close to misrepresentation” by Ottawa. He threatened harsh criticism if the inducement sways Ottawa’s decision—an event likely to unleash a vintage Ken Rowe broadside squarely on the national stage.

— CHRIS WOOD in Halifax