Buzz Hargrove has never met Ches Penney. The Canadian Auto Workers chief knows almost nothing about the shrewd, low-key industrial magnate who might just be Newfoundland and Labrador's most powerful business leader.
But he does know that the fate of nearly 2,000 CAW-affiliated workers in Newfoundland depends heavily on Mr. Penney's ability to manage the battered remnants of local fisheries icon FPI Ltd. "He's an unknown quantity but our people are breathing a sigh of relief and saying 'let's work with him,' " says the Toronto-based Mr. Hargrove.
Until now, the stocky, ruddy-faced Mr. Penney, 75, has been little-known outside Newfoundland, and not exactly a household name even on the Rock. But that anonymity may be about to end.
The Newfoundland and Labrador government this week approved the breakup and sale of FPI, the heart and soul of the local fish economy for more than 23 years.
Under the agreement, whose details are being hammered out, Ocean Choice International Inc., a St. John's-based company controlled by Mr. Penney, would get most of FPI"s Newfoundland assets, including six fishery plants, vessels and various offshore rights.
High Liner Foods Inc. of Lunenburg, N.S., would buy a secondary processing plant in Burin, Nfld., and a U.S. marketing arm.
In the view of Mr. Hargrove, as well as many Newfoundlanders, Mr. Penney's purchase would represent a hope for quieter times after the controversial stewardship of Nova Scotia fish tycoon John Risley and his ownership group.
Mr. Penney has been a relatively small player in the fish game, but is hardly a business neophyte. Whatever happens in Newfoundland, he has his finger in it, whether it's oil tankers, construction, building materials, car dealerships, real estate, even high technology.
It adds up to a privately held conglomerate with interests in more than 50 companies and $600-million in annual sales, run out of an unprepossessing industrial building in suburban St. John's.
The son of a service station owner in Carbonear, Mr. Penney joined Bank of Commerce out of high school and became the youngest manager in the bank's network. But he yearned for something more, so he opened a small auto parts store, and parlayed that into a construction company.
He lost his company through bankruptcy in 1969-1970 because, he has admitted in interviews, he was distracted by a turbulent personal life. Vowing never to lose focus again, he rebuilt the business and it took off.
It is a typical Newfoundland success story. His construction firm grew as much as it could in the lightly populated province, so he branched out by accumulating a conglomerate of varied assets, often with partners.
Along with a Norwegian partner, he operates the shuttle tankers that transport oil from Hibernia and Terra Nova offshore fields to a trans-shipment port. He owns interests in about a dozen car dealerships, working with his nine children.
Mr. Penney was clearly the province's top choice to take over the local FPI assets after Mr. Risley and his group put them on the block. The other options were to sell the assets piecemeal, or to another contender, the Barry Group of Corner Brook.
The big question is why Mr. Penney wants to expand in a business plagued by overfishing, declining stocks, fluctuating prices and government interference. Two years ago, Mr. Penney said "all my businesses with the exception of fish plants are doing well."
His hands may be further tied by conditions the province has put on the sale. Under a complex new arrangement, fish harvested under Canadian quotas must be landed in the province, and not shipped to lower-cost countries for primary processing.
One theory being offered is that he has considerable backing by Icelandic financial interests, and that the purchase may amount to an exit strategy for Mr. Penney. In time, this theory goes, the Icelandic interests will assume control and he will fade to the background.
Mr. Penney did not return calls yesterday.
John Crosbie, the former federal cabinet minister and a onetime FPI director, insists that idea is "nonsense." He said he would be surprised if Icelandic interests were not involved in the financing. Icelanders have their hand in many fishery deals, reflecting their experience and knowledge.
But he says it is not like Mr. Penney to be a frontman. "Ches Penney doesn't get stalked. If there is any stalking to be done, he does it." Mr. Crosbie said the big advantage for both Ocean Choice and High Liner is that the asset will no longer fall under the provincial FPI Act. "FPI has been a political plaything down here."
Chairman, The Penney Group,
Born: Carbonear, Nfld., 1932
Education: High school graduate
Joined Bank of Commerce out of high school
Became a manager in Grand Falls, Nfld.
Quit the bank to go into retail auto parts
Founded a construction company
Business failed in 1970 and assets sold off
Later, he reacquired many of the sold assets
Has nine children, a number of them partners in his car dealerships. Entertains on a 51-foot yacht called Friday Night.