The new James Hardie opts to keep it simple

IT'S pretty easy to chuck mud at James Hardie. Ten James Hardie executives and directors were found to have broken the law -- in their case over a statement in 2001 that the company's asbestos compensation fund was "fully funded" when it absolutely wasn't -- and you can't say that about many companies.

But now there is a new guard at Hardie. Chairman Mike Hammes has been there since January last year, and chief executive Louis Gries and chief financial officer Russell Chenu arrived in October 2004.

Whacking them is a bit like moaning about the invasion of Iraq. They didn't cause the problem, they weren't there, and the courts have done a fair job of apportioning blame.

Their job is to plot a well-thought-out course through the mess, and asbestos is what the lawyers call a legacy issue.

The best way to compensate victims of asbestosis and mesothelioma is for the company to start making some serious money, and the best way to do that is probably to put as much senior management muscle into the US market as possible.

Having its headquarters in in Amsterdam didn't offer that. Someone moved the tax goalposts in 2004 and turned Hardie's top echelon managers into professional travellers, forever wondering if they should be in the US making decisions or in Amsterdam satisfying some new tax rule.

As CSR chief executive Ian Burgess memorably commented in 1987 when head office staff suggested he should expand the company's operations so they could all keep their jobs: "I ask you, gentlemen, is that any way to run a f..king company?"

The new James Hardie is so simple it's almost painful. It makes pressed fibre cement that looks like timber and it makes it, on its own admission, better than anyone else in the world. That works best in sunny places such as Australia and the US sunbelt -- but it didn't work in Chile and it didn't work in the Philippines. Why? Because the vast bulk of the population in those countries was too poor to pay a price that would give Hardie back a decent margin. So they pulled out.

Why is the product not on sale in Europe? Because people over there don't make houses that way. Why is it looking to set up in Chicago? Because it's less than four hours from its major markets.

Sometimes logic's so simple you wonder how companies fell off the track in the first place and this move, odd as it looks, is Hardie's best chance of getting the wheels whizzing again.