Fighting talk from the 'FT'

Internal strife, staff poached, profits savaged ... the editor of the pink 'un has found that money walks. But, he tells Sonia Purnell, that won't stop him ruffling feathers or pushing for world domination

Andrew Gowers may have won the war when he beat off Robert Thompson to become editor of the Financial Times 12 months ago. But the pink 'un's bearded wunderkind must be wondering whether he hasn't lost the peace.

Thompson did not lick his wounds for long but soon departed for the editorship of The Times, where the Murdoch shilling has enabled him to go on a merry shopping spree, often at the FT's expense.

Not only has he poached at least four FT senior reporters and a designer in the past few weeks, but he has taken on as a leader writer none other than Camilla Cavendish, right-hand woman to Dame Marjorie Scardino, chief executive of the FT's parent company, Pearson.

But the cruellest twist for Gowers must be Thompson's recruitment of his predecessor in the FT hot seat, Richard Lambert, to write a Times column. Lambert's name was already mud at the FT bunker on Southwark Bridge for publicly attacking the financial press, but his defection to the Murdoch camp for a reputed "serious amount of dosh" has got the pink blood boiling. "It looks like Thompson is running a 'sod you' campaign to the FT, delivering us a sound kicking when we're already down," says one executive. "And Lambert is going along with it."

Gowers, said to be furious with the notoriously aloof and donnish Lambert, gives a glimpse of his irritation when he talks about the differences between him and his predecessor, who left after 10 years at the helm. "I like changing things. A fifth of my staff have changed their jobs in the past year," he points out.

Of Thompson's achievements at The Times, he says merely: "I think he's quite cleverly building on his inheritance."

But FT journalists don't need this sort of blow from their former chief. Currently labouring under a recruitment freeze, a ban on entertaining contacts and a moratorium on travel, they got another bloody nose last week when Dame Marjorie accused them of not working hard enough to "ferret out" big stories such as the Enron and WorldCom scandals. "We could have done a lot more digging. But business journalists often don't know a lot about business," she said in an interview with the Royal Society of Arts Journal.

Her Gerald Ratner-esque comments, albeit later tempered with an apology, led to one senior staffer uttering the immortal phrase: "We can't lunch, we can't travel and now we're told we're crap!"

Gowers said the way Dame Marjorie's remarks "came out was unfortunate. But it was a tempest in a teapot. She says we are doing a great job. I spoke to her at the weekend. We have a great staff here, but I'm not naming names in case someone else tries to offer them a job."

It was always going to prove a massive task to sound bullish when Gowers agreed to an interview about his first 12 months as editor. But the super-energetic, pugnacious, opinionated, bilingual, 44-year old Henry VIII lookalike managed it – just.

True, since he took over, his paper has faced the worst advertising recession in 40 years. And he had to close down the heavily loss-making colour magazine The Business. And an estimated £150m has so far been poured into FT.com, which is only now beginning to break even while the website has only 20,000 paying subscribers.

But the FT has also been presented with the "stories of a lifetime", as he puts it. "We've had fraud, corporate collapse, war and peace and chief executives being taken away in handcuffs."

"As soon as I took over on 1 October, we had bombs falling on Afghanistan and Railtrack going into administration. Advertising may be dead but it's been a fantastic journalistic story."

While the critics may harp that the FT should be delivering more scoops, there is no doubt Gowers has introduced a much-needed "hard, crunchy" news-driven agenda to the paper for the first time. He claims to be pleased with recent scoops on Commerzbank, Arthur Andersen and others.

But a lot of his old-style FT writers don't like it, grumbling about a "shouting culture" and the abandonment of the old "steady as she goes" approach. The new focus on presentation and pictures has also ruffled feathers. The newer FT breed, though, are generally Gowers supporters, hugely impressed by his achievements with FT Deutschland, which he successfully launched against hostile opposition from the German media establishment. Two and a half years later, its circulation is 85,000 and still rising. "It was incredible, launching a paper in a foreign language in the toughest newspaper market in the world. He had to get the job after that," says an FT executive.

Of course circulation doesn't necessarily equal profits, and Gowers isn't saying when FTD is expected to make money. Overall, the FT is flying high at nearly half a million copies a day, but operating profits in the first half of the year fell by a staggering 78 per cent to £7m.

The US edition – until he left for The Times, Thompson's fiefdom – continues to be a heavy drain. Launched at the top of the market, the FT went on a "landgrab" mission hiring too many staff often on exorbitant salaries. A fashion writer was even granted an unprecedented $1,000 a month clothing allowance.

Gowers remains optimistic about the US, sending out a new wave of people headed by FT old hand Lionel Barber to help raise circulation to a profitable 200,000, from a current 130,000, by a target date of 2007. "It's going to take a little longer than people used to say. But we're boxing clever in the US. We never pretended we wanted to punch at the same weight as The Wall Street Journal all along the waterfront.

"Our proposition is very different. The Journal tries to appeal to everyone including middle managers in the Mid-West. We target the decision-making elite who look outside the US. Some of them, including heads of big banks and people in the US Treasury, tell us they read us first. But we want more: we want to move from being a marginal or peripheral thing to being a player."

Gowers' next phase of world domin-ation, upgrading the Asian edition, may well give him the scope to show just what an FT radical he is. The current deputy editor, John Ridding, is expected to go to Hong Kong next year to start a regional news-editing operation, creating an enviable job vacancy back at the ranch.

The hot money for his successor is on Chrystia Freeland, a forthright, fiercely ambitious and talented woman of Canadian extraction, whom Gowers put in charge of "transforming" FT.com. "Other news organis- ations now look at it with a mixture of wonderment and envy, as the editor of The New York Times told me the other day," he crows.

Barely in her thirties, Freeland is a woman in the Gowers hard-hitting mould and also one who thinks nothing of expressing milk for her baby in the office, to some of her older male colleagues' obvious discomfort. But under Gowers' reformist regime, she's the rising star and there is nothing the fusty old guard at the FT can do about it.