James Michael Goldsmith
James Michael Goldsmith
James Michael Goldsmith (born 1933), British-French industrialist and financier, achieved international renown as a corporate raider after a successful career in manufacturing and distributing consumer products.
James Michael Goldsmith was born in Paris, France, on February 26, 1933, to Frank Goldsmith, manager of a luxury hotel chain and former British Parliament member, and Marcelle Mouiller Goldsmith. Tycoon, the title of Goldsmith's biography, reported that he is a descendant of the Goldschmidts, German Jewish bankers of Frankfurt, and of French Catholics on his mother's side. Seeking greater freedom and opportunities, his wealthy grandfather left Germany and settled in England; his father was educated at Oxford, was elected to Parliament, and served in World War I. However, anti-German views in England caused the father to lose his parliamentary seat, and the family moved to France. During World War II the family fled France to escape from the Nazis and lived in the Bahamas. The series of family dislocations were to give Goldsmith, who later owned luxurious homes in four countries, a cosmopolitan outlook. With his wealth he established an almost private world where he could pursue new business and personal goals.
James, known as "Jimmy" to his friends, enjoyed a privileged upbringing, attended Eton for several years, and was independent-minded and adventure-seeking. He enjoyed betting on horse races and playing poker. At age 16 he left school after deciding a formal education was not needed to achieve financial success.
Several years of high society life were followed by military service before Goldsmith entered business in partnership with his older brother in 1953. The next year his young wife, Isabella, died, leaving him with an infant daughter to raise; this tragedy made him more serious about pursuing a career. In 1955 he founded Laboratoires Cassene, a French pharmaceutical manufacturing company. When over-expansion brought him to the brink of bankruptcy in 1957, he was forced to sell the firm. But Goldsmith remained in the same line of business, becoming more fiscally conservative.
Goldsmith's new companies, Laboratoires Laffort and Laboratoires Lanord, known as Gustin-Milical outside France, grew into a profitable pharmaceutical chain. With the assistance of a banker, Selim Zilkha, Goldsmith established Ward Casson Ltd. in Great Britain to distribute similar products; next, he acquired and expanded British pharmaceutical and children's furniture store chains. Goldsmith succeeded primarily by marketing a popular slimming product, a self-tanning lotion, a disinfectant, and lower-priced antibiotics and by making other health products widely available and less expensive.
In 1964 Goldsmith entered the grocery distribution business with the founding of Cavenham Foods Ltd. in Britain. He also purchased the rights to some of Britain's best-known food brand names. The turning point of his career came in 1971 when he succeeded in a hostile takeover of Bovril, a long established British food company. The bitter fight, disapproved of by London's financial elite, led Goldsmith to offer increasing higher bids and to incur a large debt. However, his restructuring and selling of Bovril's subsidiaries resulted in great profits. This deal earned Goldsmith his reputation for financial expertise, but establishment status eluded him.
In 1972 he continued his expansion in the food industry by acquiring Allied Suppliers, Britain's fourth largest chain of grocery stores. Also, as early as 1973 Goldsmith began investing in American companies. In December 1973 he announced that Cavenham Holdings had acquired control of Grand Union, the tenth largest supermarket chain in America, for $62 million.
By the mid-1970s, when Goldsmith had achieved his goal of financial success, new endeavors, including politics in England and publishing in France, attracted his attention. In the early 1970s he became an active supporter of Conservative party efforts, even offering advice on reforming the party. In 1976 he was granted a knighthood. However, Goldsmith's fame and wealth led to public criticism of his business methods and personal life. In 1977 he left England and reestablished his business headquarters in France. Goldsmith's business and personal life was still considered unconventional, however, and, to a degree, anti-authoritarian. He followed the Social Darwinist "survival of the fittest" theory in business, and he openly maintained two families, one in England and one in France.
During the financial boom of the 1980s Goldsmith was the ideal person to pursue corporate restructuring of conglomerates. He believed the corporate raider brought more success to the acquired company. In 1980 his international business empire included some of his earlier holdings plus a 24 percent ownership of Diamond International Corporation (a timber company) and control of Basic Resources International. Goldsmith angered environmentalists by selling the rest of his holdings in Diamond International, which included 96,000 acres in New York's Adirondack Park, for development.
In 1985 Goldsmith acquired Crown Zellerback, a California-based paper and timber company, after a bitter bidding war. However, in 1986 he was thwarted in his hostile bid for Goodyear Tire and Rubber Company of Akron, Ohio. Nonetheless, he made a $93 million profit by selling his holdings back to Goodyear.
By the mid-1980s Goldsmith had joined the ranks of the renowned American corporate raiders T. Boone Pickens, Carl Icahn, Saul Steinberg, and Irwin Jacobs. Like them, he believed his actions were improving the American economy.
Although Goldsmith's complex business empire at one time consisted of three levels of holding companies, by 1988 his organization was based in the Cayman Islands, West Indies, under the name General Oriental Investments. A small group of long-time associates were his principal advisers and management team, although investment banks, including Lazard Freres, also gave advice.
When the business climate changed after the stock market crash in October 1987, Goldsmith did not change his strategy. However, the withdrawal in April 1990 of his hostile bid for the British conglomerate B.A.T. temporarily halted his takeover activities. Nonetheless, Goldsmith's financial resources and his manufacturing and distributing experience enabled him to benefit from new opportunities provided by the economic unification of Europe.
In 1993, Goldsmith did an abrupt about-face and left business to devote himself to environmental causes. In 1994 he published The Trap, setting forth the thesis that social stability was being destroyed by global free trade, intensive agriculture, and nuclear energy. Goldsmith continued to be concerned with trade issues, speaking out against GATT (General Agreement on Tariffs and Trade) in 1994. He argued that GATT could lead to social chaos because low-wage foreign workers, augmented by the collapse of communism, would displace workers in America and Europe. Competition for cheap labor, in his opinion, would enrich big corporations, dislocate people in poor countries, and deprive European workers of needed jobs. Goldsmith suggested local continental trading blocs as an alternative. In 1995 Goldsmith self published The Response, which presented evidence to support his thesis in his first book.
Using his anti-free trade agenda, and his finances, Goldsmith established two political parties. "L'Autre Europe" campaigned for a European Union that refuted Nafta and GATT and that fostered corporate rules for the environment. In 1995 Goldsmith was elected to the European Parliament, along with 12 other like-minded individuals. In 1995, Goldsmith also formed and financed the Referendum Party in order to force a referendum on the issue of the European Union, to run candidates in the next British election and to extend his views to that country's parliament. Although, in 1997, it seemed unlikely that the Referendum Party would win many votes in the general elections, Goldsmith undermined efforts by other British parties to garner support for participation in a European Union that supported free trade.
Goldsmith's character and personal life have puzzled some people, but his ancestry and childhood experiences help explain his personality. His loyalty has always been given to individuals and not to countries or corporations; this was a lesson he learned from his father's life.
The best source on Goldsmith is Geoffrey Wansell's biography, Tycoon. The Life of James Goldsmith (1987). An apparently authorized biography, it describes Goldsmith's career, business views, and personal philosophy in detail, but does not analyze his character or motives. Goldsmith's career as a corporate raider has been well documented by contemporary articles in the Wall Street Journal, New York Times, and business magazines; dozens of stories describe his 1990 thwarted B.A.T. takeover. Goldsmith is listed in Who's Who 1990 [a British Who's Who].
For biographical resources about James Goldsmith see: Fallon, Ivan, Billionaire: The Life and Times of Sir James Goldsmith (1992); Ingrams, Richard, Goldenballs; Wansell, Geoffrey, Sir James Goldsmith. Books written by James Goldsmith include: Goldsmith, James, The Trap (1992) and Goldsmith, James, The Response.
Periodical articles about Sir James Goldsmith include: Backpacker (February 1993); New Statesman and Society (March 12, 1993); Barron's (May 17, 1993); Business Week (May 24, 1993); The New Yorker (May 31, 1993); New Statesman and Society (November 25, 1994); Business Week (December 5, 1994); The Economist (April 29, 1995); Gentlemen's Quarterly (June 1995); The Economist, (September 2, 1995); Financial World (November 7, 1995); National Review (November 27, 1995); The Economist (May 4, 1996); The American Spectator (July 1996); The New York Review of Books (October 17, 1996); New Statesman (October 18, 1996); The Economist (October 19, 1996); The Nation (November 25, 1996); and Business Week (January 27, 1997). □