Heroes

by Peter C. Newman

  ROY HERBERT THOMSON, whose father was a Toronto barber, quit school at fourteen to become a five-dollar-a-week clerk, and in 1931 purchased a fifty-watt radio station in North Bay, Ontario, and another later at Timmins—so he could sell the radio sets he was lugging along country roads—is one of the sustaining legends of Canadian capitalism. Less well known is the way the hardships of the Great Depression permanently imprinted themselves on generations of the Thomson clan. “I’m still horrified by people who don’t make soup stock out of meat scraps,” says Ken’s niece Sherry, who spent her youth in the communal Thomson home at Port Credit, just west of Toronto. “And if you were making a custard with three egg yolks, you could have knocked me over with a feather the first time I saw a woman throw the egg whites down the drain. That just wouldn’t occur to me; the whites are tomorrow’s dessert. You used everything and got into the rhythm of making your own jam and freezing your vegetables.” (At about that time, Roy’s daughter Irma had to canvass funds from neighbours to get the roof of the Thomson house fixed because Thomson refused to spend the money.)

  The Port Credit household, which for a time included not only Ken, but also his sisters, Irma (Sherry’s mother) and Phyllis Audrey, and most of their children, was run according to stern, puritanical precepts. “Granddad loved us very much,” Sherry recalls, “but the affection was always very gruff. It was a staunch, didn’t-come-from- much kind of family, so that signs of affection came out almost by accident, as asides.” She remembers her mother being locked out by Roy, the family patriarch, if she ventured home after midnight. This was not when Irma was a confused teenager but a serious and intelligent adult well into her thirties, divorced, with a nine-year-old daughter, and dating again. Luckily, the family had German shepherds, and a dog porthole had been cut into the sunroom door. Irma’s dating partners still recall having to push her, 1940s dirndl and all, through the dog door after their goodnights. “They could only do that in the summer,” according to Sherry, “because in other seasons, the ground got too wet. When I became a teenager, I was locked out by my mother, in turn, and had to climb up the trellis.”

  YOUNG KEN ATTENDED elementary school in North Bay, where he worked summers as a disc jockey at his father’s radio station, CFCH. His main assignment was to play background noises meant to evoke the crowd sounds and clinking glasses of a ballroom while big-band dance numbers were on the air, but he also fell in love with the music of Hank Snow and dreamed of actually meeting him someday. When the family moved to Toronto, young Ken was enrolled in Upper Canada College. After an unsuccessful year at the University of Toronto, he joined the Royal Canadian Air Force but was never promoted beyond Leading Aircraftman, the equivalent of a lance-corporal in the army, spending most of the war as an editorial assistant on Wings Abroad, a propaganda weekly. He took his discharge in London and spent two years at Cambridge, though the university had no discernible effect on him. After spending a year on the editorial staff of his father’s Timmins Daily Press, he moved back to southern Ontario, where Roy Thomson had acquired the Galt Evening Reporter. His five-year apprenticeship there was an important formative influence, as were the weekends he spent at the Port Credit house.

  Roy Thomson had moved to Scotland in 1954 but returned to the family homestead in summer and at Christmas. The elder Thomson held court while watching the TV set in front of him, listening to the radio beside him, petting the Scottie dog at his feet, eating fruit from a bowl with a little paring knife, all the while reading a murder mystery.

  Young Ken loved frightening his nieces and nephews, especially when they slept in garden tents during the summer. “He’d put a sheet over his head and ghost us,” Sherry recalls. “Or he’d hide behind a bush and make fake owl noises. But we always knew it was him and we’d yell, ‘Oh, Kenny, stop it!’ He was very much the tease.”

  By the late 1950s, Roy Thomson had not only acquired the prestigious Scotsman, but had also won control, in what was the world’s first reverse takeover bid, of the powerful Kemsley chain, which included London’s influential Sunday Times. Roy’s lucky streak broke in 1967, when he acquired the daily Times, Britain’s great journal of record. The Times did not lose its lustre under Thomson, but it lost him bags of money.

  Thomson had, by this time, become a fixture among British press lords. He could always be depended upon to say something mildly outrageous and to pose for yet one more photograph showing off his skinflint habits. “They say business is the law of the jungle” was a typical sally. “I think it’s the law of life. If you want to prosper, you’ve got to be ambitious. You’ve got to be ready to sacrifice leisure and pleasure, and you’ve got to plan ahead. I was forty years old before I had any money at all. But these things don’t happen overnight. Now, how many people are there that will wait that long to be successful and work all the time? Not very many. Maybe they’re right. Maybe I’m a bloody fool. But I don’t think I am.”

  American tycoons J. Paul Getty and Armand Hammer approached Thomson in 1973, offering a 20 percent share in their Occidental consortium, preparing to drill in the North Sea, where Phillips Petroleum had already found valuable indications. Roy bet his family’s (as opposed to his company’s) fortune on the play, though oil was then worth only $3.60 a barrel. When Occidental struck the giant Piper field and later the Claymore— and prices climbed to $14 a barrel—Thomson overnight earned an extra $500 million.

  “Most people would say, ‘I wouldn’t want to do what you’ve done, even for your success,’” Roy reminisced in one of his last interviews. “They’d say, ‘You’ve missed a lot out of life, and success hasn’t made it all worthwhile.’ But it has to me. It’s just a matter of ambition and determination. You keep plugging away. I learn more from my failures than I learn from my successes because I learn bloody well not to do them again. Nothing has ever happened to me in my life that hasn’t been for the best. Now I accept death. I lost my wife. I lost a daughter, but those things, I mean, you can’t measure them in terms of happiness or success or failure. I’m a very imperfect individual, and I’ve done a lot of things I shouldn’t have done, but I honestly am not a person who caused anybody any suffering if I could help it.”

  Henry Grunfeld, former chairman of S.G. Warburg, the London merchant bankers who had helped finance Thomson, remembers his last conversation with Roy in the bank’s Terrace Room at its Gresham Street headquarters. “It was about three weeks before his death, and we both knew it was the last time we would meet. He told me he was worth about $750 million, or whatever it was, and complained bitterly how much he wished he could have made a billion. ‘Why, haven’t you got enough, Roy?’ I remember asking, especially since he was so obviously very ill. He looked surprised, as if he had never considered the question, and shrugged, ‘Henry, it’s just for the fun of it… . ‘ It was pathetic.”

  Thomson died on August 7, 1976, and Ken was suddenly in charge. His father had passed away both too soon, because the younger Thomson was not ready to take over, and too late— because Ken was by this time fifty-three years old and had spent most of his adult life following his father a tactful step behind— like a commercial version of Prince Philip. Inheriting a father’s business is difficult; succeeding as powerful and articulate an individual as Roy Thomson—recognized as a folk hero of capitalism—was impossible. Ken tried valiantly to turn himself into an extrovert but quickly conceded that it was mission impossible. “The nice thing about my dad was that he was so unusual. No one in his right mind could expect me to be the same. I’d be happy to go unnoticed. I’ve tried to be a good, sound businessman in my quiet way, but I can’t say I’ve been a slave to business. I’ve tried to strike more of a balance between my personal and business lives.” His father’s friend and adviser, Sidney F. Chapman, summed up the situation more succinctly: “When you live in the shadow of a legend, you don’t go flashing mirrors.”

  KEN’S FIRST MAJOR DECISION was to cut family ties with the the Sunday Times and the Times, where union problems had forced susp
ension of publication for eleven months. During their twenty-one-year stewardship, the Thomsons, father and son, had poured at least $2 million into the properties without any significant return. Their loyalty to those great institutions without any apparent fiscal controls was totally out of character. Thomson sold the two papers for the value of the land and buildings to Rupert Murdoch and gradually moved his businesses back to Canada.

  The company owned forty-three daily and eleven weekly Canadian newspapers at the time. What they had in common, apart from ownership, was a blandness so pervasive that no self-respecting fish could bear being wrapped in their pages. “Disliking Ken Thomson, let alone detesting him, is wholly impossible,” confessed Richard Gwyn, a leading Canadian commentator who once worked for him. “He radiates niceness from every pore, down to the holes in the sole of his shoes. He’s self-effacing, shy, unpretentious, soft-spoken. He peppers his conversations with engaging archaisms, like ‘golly’ and ‘gee whiz.’ But then you stop feeling sympathetic because you realize that his innocence is just a synonym for timidity. And you realize at the same instant that the reason Thomson newspapers are bland is that they are led by the bland.”

  The Thomson operational code had been set down by Roy, and it didn’t initially change much under Ken. Both Thomsons regarded editors as expendable eccentrics, and Clifford Pilkey, then president of the Ontario Federation of Labour, once called their company “a vicious organization, certainly not compatible with what I describe as decent, honourable labour relations.” Reporters did not receive free copies of their own newspapers, and earnest bargaining went on to deprive delivery kids of half a cent in their meagre take-home pay. Most positions had fixed salary limits, so that anyone performing really well would inevitably work him-or herself out of a job. In pre-computer days, Thomson papers sold their used page mats to farmers as chicken-coop insulation, and Canadian Press teleprinters were adjusted from triple to double spacing to save paper. Each newsroom telephone had a pencil tied to it, so there would be no wasteful stubs floating around. “God help us if they ever realize there are two sides to a piece of toilet paper,” one publisher was heard to whisper at a management cost-cutting meeting.

  IN THE WINTER of 1980, Thomson had used some of his North Sea oil proceeds to purchase, for $130 million, a major Canadian newspaper chain, FP Publications Limited, but that projected him into new and unfamiliar territory. FP had fielded an impressive Ottawa news bureau under the capable direction of Kevin Doyle (later the editor of Maclean’s) that included such stars of Canadian journalism as Allan Fotheringham, Walter Stewart and Doug Small. The bureau regularly beat the Parliamentary Press Gallery to the news, but it didn’t fit in with Thomson’s usual barebones operation. When FP’s Edmonton bureau chief, Keith Woolhouse, who was working out of his one-bedroom apartment, asked for a wastebasket, Thomson’s executive vice-president, Brian Slaight, wasn’t going to stand still for such an outrageous request. Doyle tried to diffuse the situation by offering to send out an extra wastebasket from the Ottawa office.

  “Is it excess to the Ottawa bureau?” Slaight, ever the champion of independent editorial control, sternly demanded.

  Doyle, about to break the news of Prime Minister Pierre Trudeau’s resignation, calmly replied, “Well, if you mean, do we really need it, no, I guess we don’t.”

  At last, a triumph for head office. Slaight could hardly contain himself. “We have a truck that goes from Ottawa to Toronto to Winnipeg, then on to Edmonton. If we put the wastebasket on the truck, it will hardly take up any room, and won’t cost us a cent!”

  So the wastebasket jauntily journeyed across the country, and it took only a week and a half to reach its destination. But the Edmonton bureau’s troubles were far from over. Woolhouse wanted to rent an office and needed furniture. Slaight vetoed the initial $1,600 estimate but later approved a bid of $1,100 from a local repossession centre. That didn’t save Woolhouse. He permanently blotted his copybook by purchasing his pens and paper clips on the open market instead of from the repossession house. The Edmonton bureau was soon closed, as was the entire FP news operation.

  On Thomson’s sixtieth birthday, Roy Megarry, then in charge of the Globe and Mail, published a special one-copy issue that was substituted on Ken’s doorstep for the real thing, that had a front page with his picture on it and several feature stories about Gonzo. “That morning, Ken did phone me,” Megarry recalls, and said, “‘What are you doing, you rascal?’—he frequently refers to me as a rascal—and admitted he had been stunned, because for a split second he thought it really was that day’s Globe. ‘It was a cute thing to do,’ he later commented, ‘but I hope it didn’t cost the company too much money.’”

  DURING THE LATE 1970s, Ken Thomson enjoyed a unique problem. With oil prices up to as much as $34 a barrel, his share in the North Sea fields purchased by his father was throwing off annual revenues of $200 million. That’s not the kind of sum you keep in your mattress. Tax reasons, plus the wish to get into hard assets, dictated new acquisitions, but the chain had run out of cities, towns and even villages where they could maintain monopolies. Thomson went shopping for a safe, timeless investment for his family.

  While on a flight to London, John Tory passed over to Ken an annual report of the Hudson’s Bay Company, with the comment, “This is one you should think about.” That struck Thomson as a weird coincidence because he had been thinking about the Bay, ever since Fred Eaton at a party had mentioned that the HBC was lucky because so much of its profit flowed from non-merchandising sources. “It was like mental telepathy,” Thomson recalled of the airplane conversation. At first glance, the Hudson’s Bay Company seemed a perfect takeover target. It certainly carried the kind of historic pedigree that would please a British-Canadian lord, it was widely held, with no control blocks that would have demanded premium prices, and it was a well and conservatively managed enterprise. It qualified for the Thomson methodology of acquiring companies that turned decent profits without requiring day-to-day involvement. (There is another theory why Thomson settled on the Bay. He walked Gonzo most often through Craigleigh Gardens, near his Rosedale home, and at night the most visible object from the shrubbery is the ochre neon sign at Yonge and Bloor, proclaiming “The Bay! The Bay!”) On March 1, 1979, Ken Thomson and John Tory called on Don McGiverin to announce they were bidding $31 a share—36 percent over market value—for 51 percent of the Hudson’s Bay Company. At the Bay’s board meeting two weeks later, Governor George Richardson reported that in a meeting with Thomson the previous Sunday evening, he had failed to persuade him to buy less than 51 percent. The board decided that the premium offered for control was not high enough and that $37 to $40 would have been a more appropriate amount. That consideration was aborted by the sudden entry into the bidding of grocery magnate Galen Weston, offering $40 for the same percentage, though part of it would have been payable in stock. Unlike Thomson, Weston hinted that he intended to fire most of the HBC executives, replacing them with his own.

  The first telephone call Thomson received after word of his intended takeover leaked out was from Fred Eaton, “I wish you luck. Welcome to the world of merchandising.” The second was from Galen Weston, advising him of the competing bid. By April 2, Thomson and Tory had raised their bid to $35 for 60 percent of the HBC stock. Weston countered with an improved offer ($40 for 60 percent), but once Thomson came in with an unconditional cash offer of $37 for 75 percent of the shares—$276 million more than he had originally been willing to pay—the bidding stopped. The Bay board met on April 4 to approve the takeover formally.

  Ken Thomson did little to enjoy his position as the HBC’s proprietor, neither becoming its governor nor taking part in any of its historic rituals. One exception was a summer journey he took to Baffin Island and Hudson Bay with his wife, Marilyn, two of their children, Lynne and Peter, and George Whitman, the company’s vice-president of public affairs, an ace Second World War pilot who had fought in the Battle of Britain and had since earned a cross-Canada r
eputation as a social animator. They had just finished lunch at Ross Peyton’s tiny hotel at Pangnirtung on Baffin Island, and Whitman was relaxing on a small rise overlooking the town when up puffed Marilyn and said, “George, I want to do some shopping at that co-op you told me about. You got any money? Here I am, married to the richest man in the country, and he won’t allow me to have any credit cards or anything like that. Can I borrow a hundred dollars? But don’t tell Ken about it.”

  Whitman peeled off the bills, and she skipped off down to the co-op. Just as she disappeared from view, as if on cue, the world’s eighth-richest man came up the hill with the same request. “George, I want to go up to the Bay store and buy some fishing tackle. Can you lend me a hundred dollars?” Later that day, as they were fishing, Ken began to eye Whitman’s down-filled vest so wistfully that the Bay man finally told him to take off his Eddie Bauer finery and slip it on. “If you like it, it’s yours,” Whitman offered, expecting to agree with Thomson’s refusal. Instead, the press lord held out his hand and said: “Let’s shake on it.” And that was the last Whitman ever saw of the vest that had been his Linus blanket on many a northern expedition—or the money.

  IF THERE IS ONE SANCTUARY where Ken Thomson can find peace, it’s in the private world of his art objects. Within these hushed precincts, he can revel in his own aesthetic universe, indulging his whims without the budgetary problems that inhibit most collectors. He richly deserves his reputation as the premier collector of habitant scenes by Krieghoff (some selling for as high as $275,000), all of them magically revivified by one of England’s best restorers. “He knows every picture the artist painted or attempted to paint and is constantly improving his collection,” according to the Earl of Westmorland, the director of Sotheby’s in London. “He’s got a great eye and a passionate love of art,” echoes Christina Orobetz, the president of Sotheby’s Canadian company.