Nancy Southern and her family are hanging on to a bad investment. It’s a matter of pride, passion and patriotism, but she admits it’s no way to make money.
The family best known for the white Atco trailers with the yellow band wrapping around the top, owns Spruce Meadows, the equestrian facility on Calgary’s outskirts that is home to the Masters show jumping tournament. Its gates are open to spectators at no charge, and tickets to the actual events can be snagged for as little as five bucks.
“As long as it can break even or make a little tiny bit of money, then it’s fine,” Ms. Southern says, laughing over lunch at the Ranchmen’s Club, Calgary’s oldest private club. “Because then it is not an albatross and it is sustainable. And that’s the key about Spruce Meadows.”
For the Southern family, the facility is more than just a hobby. It is part of their mission to give back, says Ms. Southern, an accomplished show jumper and a fiercely proud Canadian. For eight weeks each summer, 2,000 people a day fill Calgary’s hotel rooms because of Spruce Meadows’ marquee events. Cities lobby hard to host conventions of this size, and Spruce Meadows provides that for Calgary without much in the way of return.
Spruce Meadows is not part of the family company, but wouldn’t exist without it. “It goes back to the start of Atco,” Ms. Southern says. “My mom and dad felt this city, and this province, and this country had been so great in allowing them to prosper and develop their dreams, that they wanted to give something back.”
It’s a philosophy that trickles into Atco Ltd.’s approach to business, where sometimes Ms. Southern, the company’s chief executive officer, is willing to put country ahead of the family controlled conglomerate’s finances.
Eighteen companies fall under its umbrella, and the company has been involved in everything from rebuilding infrastructure in Haiti after the 2010 earthquake, to constructing a 20,000-bed village for workers in Abu Dhabi when the United Arab Emirates was building its Saadiyat Island project. The company services the oil sands and Kandahar Airfield in Afghanistan, sells nifty kitchen gadgets, and can teach you how to make spring rolls. It runs a natural gas distribution business, a pipeline division, sports IT arm, and is a player in Australian gas and power industries.
Its most recognizable business – those low-tech trailers with yellow doors – continues to grow, revitalized after years of neglect in the wake of Atco’s acquisition of Canadian Utilities Ltd. The trailers do more, however, than provide shelter in hostile environments. They provide Ms. Southern, who has had CEO powers since 2000, with a peek into the future. “It is our first indicator of what is happening in the world,” she says. “If there’s an exploration camp that’s required at the top of the Andes for a mine that’s being explored, we hear about it. Same with oil and gas.” And with that intelligence, Atco can layer on services from its other divisions.
The trailers are also a rallying point around which Ms. Southern’s brand of patriotism shines. If business were to slow, she would first shutter shops in Texas and Idaho, which manufacture trailers for 33 per cent less than factories in Alberta and Ontario. Her reasoning is rooted in her memory. The first time the company had to lay people off, when the National Energy Program shook Western Canada in the early 1980s, her dad, Ron Southern, had to go to a plant and tell employees they no longer had jobs.
It was the first time Ms. Southern saw her dad cry. He promised if he could find a way to bring them back, he would.
“I cannot imagine,” Ms. Southern says. “I cannot imagine. I wouldn’t be able to face it. Saying to the people here that you’re Canadian company that we are so proud of being Alberta-built, Canadian-owned, a Canadian business, and saying: ‘Oh, we’re not going to produce our products here.’”
And so she is willing to eat that 33 per cent. “We are. Oh, for sure we are,” she says. Atco keeps the more complex pieces in Canada and, for now, the factories are operating at capacity, meaning the uncomfortable scenario is just that.
Not every CEO has the luxury to choose Canadians over coin. The Southerns unapologetically retain control over Atco with multiple-voting shares, a structure that irks shareholders, who generally want families to relinquish power once they no longer hold the majority of the equity. Ms. Southern has no plans to loosen the reins. It would be a mistake, she says, to outlaw multiple-voting shares.
She asked researchers at the Clarkson Centre for Business Ethics and Board Effectiveness at the University of Toronto’s Rotman School of Management to examine how family controlled, publicly traded companies stack up against their corporate peers. Atco outperformed the Toronto Stock Exchange composite index by 224 per cent between 1993 and 2012, says Matt Fullbrook, who manages the centre. The largest 23 family controlled Canadian companies beat the composite index by an average of 41 per cent over the same stretch. (While Ms. Southern commissioned the school to compare the performance of family companies against regular corporations, she kept her nose out of the research, Mr. Fullbrook says).Report Typo/Error