*

Monday, February 27, 2012

Promoting a dream

According to my morning paper, London has an opportunity to save a shining jewel. I'd say the paper has a chance to chase a dream and involve their readers in the pursuit.

The shining jewel in question is the former London Normal School on Elmwood Avenue which was opened 112 years ago. The jewel has lost some of its sheen over the intervening years. It hasn't been a school for decades and in 2005 it ceased being the admin building for the London District Catholic School Board.

Now it sits. An old building in search of a new use.

I wondered what developers in other communities have considered doing with old buildings such as this one. A short google search turned up Barat College redevelopment in Lake Forest, Illinois.

Stealing some info from the architect's web site, I learned this once proud religious women's college had fallen into decline. At the heart of the 24-acre campus is the historic Old Main structure with red brick and stone walls and a slate roof crowned with an ornate cupola. The building has been a fixture in Lake Forest for over 100 years.
 
Old Main on the former Barat College campus in Lake Forest, Ill.

Plans are to rehabilitate and develop the building into a 50-unit condominium. Old Main will be the generator of a proposed campus redevelopment, whose proposed plan is based on traditional Beaux Arts principals of axial and interlocking public spaces and parks. The new Georgian Revival-inspired neighborhood will consist of 35 new town homes and 35 new single-family attached dwellings.

Sharing dreams is an art requiring art.
The architects' attention to detail is evident in the overall plan, from the Georgian style buildings and site accoutrements --- bridges, fountains, and street lighting --- to the detailed landscape planning.

A personal dream needs some concrete plans if one is to share the vision. The architects in Lake Forest know how to communicate their dream for the site. Detailed plans have been released with dream-inducing artist conceptions.

What could be done with the grounds surrounding the former Normal School?

The Barat College plans in Lake Forest, Ill., are just that: plans. This is a dream yet to be realized. On the other hand, Union High School in Black River Falls, WI, is a dream realized. This historic school has been successfully converted to apartments.

The school, built in 1871, is on the National Register of Historic Places.

It would be interesting to get a peek at the apartments in the old school. Some, especially those with interesting windows, might be quite remarkable.

The London Normal School could be converted to a spectacular residence.

Sunday, February 26, 2012

Do diesels compete with high mileage gasoline burners? Maybe, maybe not.


The oh-so-positive story that VW spins about its clean-diesel technology has been proven to be lies by the EPA. VW diesels built from 2009 on spew far more pollutants out the tailpipe than claimed. Sophisticated software shuts down much of the pollution control system whenever these cars are driven on the road rather than simply being tested. Turning off the pollution control equipment allows these cars to deliver improved power and fuel mileage. There is a recall now in place and sales have been halted in Ontario. Until this software issue is settled, I can no longer advise anyone to buy a VW diesel.

Message sent by a VW salesperson. No TDIs for sale.
For more information, read: VW Is Said to Cheat on Diesel Emissions; U.S. to Order Big Recall
and Volkswagen Chief Apologizes for Breach of Trust After Recall.

______________________________________________________

Recently, I came across an article questioning the value of diesel powered cars in today's auto market. The author pointed out that there are now gasoline powered cars that deliver fuel mileage similar to my VW Jetta but without the additional purchase cost.

Cost and availability or diesel fuel

First, the author discussed the cost of diesel fuel compared to gasoline. In the States, it seems diesel often costs more than gas. I have not found this to be the case in London, Ontario, Canada. When the price of a barrel of oil climbs, the cost of gas soars above $1.30 at the pump. At these times, I have found diesel priced less than gas. 

Sometimes I pay a premium for diesel and other times I don't. For the past few weeks I've been paying almost 20-cents less for diesel that I would have had to pay for regular gasoline. It seems diesel is more in the cold months and less in the warm ones. It's June as I write this. My records show that over the almost five years I've owned the car, it would not have made a meaningful difference if I been buying gasoline rather than diesel.

Has it been difficult finding diesel? In a word: No. Even the local grocery store fuel bar carries diesel and if you buy your fuel from at the gas bar, the grocery stores gives bonus coupons which are good for buying groceries. One of the Costco outlets has a fuel bar with a diesel pump on every lane. There are lots of stations carrying diesel in London.

Cost of a diesel vehicle compared to that of an efficient gasoline engined cars

O.K., here the gasoline powered cars pull ahead, but only if you don't take vehicle size into consideration. This can be a case of comparing apples and oranges. The new, larger Jetta is not playing in the same league as the Kia Rio, Ford Fiesta, Smart ForTwo Coupe, Chevrolet Cruze, Ford Focus or any of the other cars in the article's list.

I carry big people in my Jetta. They need leg room. The Jetta TDI provides it in both the front and the rear. And my trunk is huge. If you need room, lots of room, you may find you need more car than a Fiesta.

Insurance

I haven't done an extensive search of insurance costs as they apply to a variety of cars but I have done a small one. When buying my Jetta, I thought to call my insurance agent and get a quote for each of the cars under consideration. There was a Ford and a Honda on my short list. The Jetta cost less to insure, according to my agent, than both those other cars.

This was not a deciding factor in making my purchase but it did figure into my calculations.

Tailpipe emissions

Even after dieselgate, I feel greener driving my Jetta diesel than when I was driving my natural gas powered Pontiac Grand Prix some years back. Now, there was a polluting monster. (No slight to GM; I had the car switched to NG using a kit purchased from my local natural gas supplier.)

Conclusion

Depending on what you demand from a car, a diesel may offer some benefits. The most obvious benefit is the high mileage, especially when used on the highway. My Jetta TDI has delivered more than 60 mpg (Imp.) on the highway and it averages better than 41 mpg (Imp.) consistently.

This high mileage is delivered by a relatively large car. Check out the new VW Passat TDI. It is a big car. If the big Passat comes with too big a price, there is always the Jetta TDI to consider. A smaller car with a smaller price tag.

New diesels are quite fun to drive, certainly more so than many hybrids, in my opinion. That said, thanks to dieselgate I'm considering a hybrid Audi Sportback e-tron as my next car. Green is important to me.

For more info on owning a new VW Jetta TDI check my other post: Long Term Ownership Review: 2011 VW Jetta TDI.

Or do your own comparison of similar sized cars competing for you dollar. I feel the Ford Fusion competes directly with the new VW Jetta. Its a tough call in some ways, but I believe the Jetta comes out ahead.

With the Internet it is now easy to compare different cars before buying.

Although the Jetta costs more, when I priced a Fusion loan, I was asked to pay $56 more every month for 60 months to drive the compact Ford. This is because with the Jetta payback plan I have a balloon payment waiting at the end of the five year loan period. Win some every month; Lose some at the end.

Thanks to the fuel mileage I have been getting, I believe I would spend at least $500 more every year on fuel with the Ford. (This is based on info gleaned from a friend who owns a Fusion.) I know my insurance would have been more with the Ford. On the downside, I believe my VW has its transmission fluid and filter changed much earlier than even a hard-driven Fusion. This increases ownership costs somewhat.

When all costs are crunched, I figure the VW will probably cost me a little extra money but the longer I drive my Jetta the tighter the numbers. The big determining factor will be the residual value of my Jetta when it comes time to buy a replacement car. This number was supposed to remain a big unknown for many years but thanks to dieselgate I may know the value of aging car come July 2016.

If you have gotten this far, you might also be interested in the article Diesel: The Dark-Horse Contender For Greener, Cleaner Cars.

Friday, February 24, 2012

London EMD workers never had a chance; jobs were gone


The London Electro-Motive Diesel workers, locked out by Caterpillar Inc., have ratified a severance deal. The 465 unionized workers are receiving three weeks pay for every year at the plant, plus $1500. And Caterpillar is kicking in $350,000 for a transitional centre to help workers find employment.

In print, the local paper is continuing to spread the myth that a profitable company, Caterpillar, is shutting down an efficient plant simply because American workers will work for less. If only this were true, but it's not.

It is complex world and it should come as no surprise the decision to close the London plant, a plant with a history going back to the middle of the last century, was not made just to save a few dollars. Although, I am sure that was a bonus appreciated by CAT.

The London locomotive plant is a remnant of the steadily shrinking branch plant economy that once powered Ontario. Before there was Mexico, there was Canada, and for Americans Canada was Ontario.

I'm old enough to recall when the Canadian dollar was worth more than the American dollar --- about six percent more at one point. The high value of the Canadian dollar was said to be killing Canadian competitiveness. In the early '60s I can recall hearing that the Canadian government was undermining the value of the Canadian dollar.

In June 1961 the Canadian and American dollars were about at par. By May of the following year, the Canadian dollar ceased to float and was pegged at 92.5 American cents. It stayed there until mid-1970. Canadians called the depreciated buck the Diefendollar. It may have inflated the cost of imported products bought by Canadians but it encouraged manufacturing in Ontario.

Currency Risk: a reason for business to relocate outside of Canada.

It is a different world today. This should come as no surprise. It is now 2012. Fifty years have past. A lot happens in fifty years and for Canada, for Ontario, what has happened is not good.

The cheap Canadian dollar is a feature of the past. The post war boom is now but a distant echo. The United States is pulling in its horns and its branch plants. Think: Ford (St. Thomas/London), Sterling (St. Thomas), Navistar (Chatham), Westinghouse (London) and now EMD. And this is just a short portion of a very long list.

There are advantages to pulling manufacturing out of Canada and sadly it is not just American businesses that are being closed and pulled out of the country. EMD was an American branch plant. It always was. Its closure was no big surprise. This is a story that has been repeated time and time again right across the province.

It was not the refusal of the workers to accept a pay cut of approximately 50 percent that chased EMD from Canada. The London Free Press is reporting that CAW president Ken Lewenza said:

"A union member found a document indicating Progress Rail, a subsidiary of heavy equipment giant Caterpillar Inc. and parent company of Electro-Motive, always intended to close the plant, and had no intention of reaching a negotiated settlement.

"The letter on the Progress Rail website from company president Billy Ainsworth advised employees the London plant was closing and was dated May 23, 2011, more than eight months before the closing was announced.

"Lewenza said the company didn't refute the date or authenticity of the letter when confronted at the bargaining table."

While the closing of a branch plant is not surprising, what does come as a surprise is the closing of all the Canadian plants, like the Bick's pickle plant. Bick's was a Canadian operation started during the Second World War in Toronto. It was recently bought and closed by Smuckers out of the States, moving production to the States.

Back in the '70s, my first range was a McClary made in London. McClary closed its London plant and moved to Hamilton, merged with other appliance makers under the Camco banner. But Camco was bought out by Mabe, possibly the largest Mexican appliance maker. There is no production, that I know of, left in Canada.

The Canadian middle class is in trouble. Serious trouble. When I worked at the local paper, The London Free Press, many of the reporters and editors worried that one day Quebecor would decide to play hardball with them, with their union. They were concerned about their wages, their benefits, their retirements. Quebecor, like CAT, does not recoil from locking out its workers. Quebecor, like CAT, hates unions and has a reputation for union busting.

If the newspaper was searching for "an example of unconscionable greed that undermines every middle-class worker" the newspaper shouldn't have looked to EMD. It didn't have to look past its front doors.
_____________________________________________________________________

One note: Quebecor in London, like CAT, has made leaving easy for its workers. When  the CAT worker said that the severance deal was "Better than a kick in the teeth," I could not agree more. I took a severance package and left the paper after more than three decades at the place.

I took a hit on my pension and my CPP; Both suffered cuts of about 24 percent because I had to start drawing years early. Still, I cannot knock the deal. I thank Quebecor, my union and my co-workers who toiled for me as my union reps hammering out my severance package. Thank you Shelley, et al.

I pray the EMD workers nearing retirement do as well as I have done. I wish them all, "Good Luck!"

Wednesday, February 15, 2012

Has Quebecor benefited from government money?

To many Canadians, it appears Pierre Karl Peladeau has declared war on the CBC, attacking the government supported broadcaster with a vicious campaign of disinformation. But this is not the only battle Peladeau is fighting. There are others, just not as well publicized.

For instance if you believe the reporting in Montreal's La Presse, Peladeau is using Quebecor Media to attack the Montreal paper and its owners, the Desmarais family, with a vicious campaign of disinformation. Sound familiar?

I read a recent column by Andre Pratte in La Presse in which he went on the attack. Pratte claimed  Quebecor was the formidable media power that it is today thanks, in part, to the financial support of a Quebec investment fund with strong Quebec government ties --- support that in retrospect seems to have been badly misplaced, at least when it comes to financially benefiting the fund.

I admit I know very little about fund in question: The Caisse de dépôt et placement du Québec. But, a quick look at the fund's website seems to substantiate Andre Pratte's position.

The Caisse de dépôt et placement du Québec was established on July 15, 1965 by an Act of Québec’s National Assembly to manage the funds of the Quebec pension plan, a public pension plan also created by the Québec government. (In the following years, the Caisse was entrusted with managing the funds of other public pension and insurance plans.)

At that time, it was described by Jean Lesage, Premier of Québec, as “an instrument of growth, the most powerful economic lever ever seen in the province.” Future events would prove him right.

Canoe, the Sun Media online arm, reported that for an original investment of $3.2 billion Caisse got 45 percent of the Videotron deal concluded Oct. 23, 2000. Quebecor took the remaining 55 percent.

Why was Caisse so interested in climbing in bed with Quebecor over the Videotron purchase? Jean Laporte, the former president of Rogers in Quebec, is quoted by Canoe as believing, "It was a political decision. The (Quebec) government and the Caisse didn’t want Videotron falling into the hands of an Ontario company."

Ten years later the Caisse investment in Videotron had lost 1.5 billion dollars. Despite the large losses incurred, the former Quebec Premier Bernard Landry maintained the Caisse made the right call. Canoe quotes Landry, "It would have been a catastrophe to sell Videotron and TVA to Rogers. If the U.S. bought the BBC, there would have been an outcry in Britain."

La Presse columnist Pratte reports that even Peladeau admits the financial assistance Quebecor got from the Caisse in purchasing Videotron, prevented the cable company from passing into than Ontario hands of Rogers.

It does appear Peladeau has managed to subsidize the growth of his media empire thanks, in part, to a big infusion of money carrying more than a hint of government involvement.

Saturday, February 11, 2012

Who's overpaid?

First, the unionized Electro-Motive Diesel workers in London were locked out; Now, they are simply out --- out of work --- the plant is closing. I believe most people sympathize with these workers but I know many see the workers as having brought their economic problems on themselves. I read comments on The London Free Press site like:

  • The gravy train has passed. You have learned a lesson in humility.
  • Companies cannot afford high union wages.
  • Your greedy refusal of $16 an hour cost you your jobs.
  • Companies are asking workers for better job performance for less money. Refuse and lose.
  • Child care workers make $10 per hour, office workers maybe $15. Caterpillar offered a fair wage.

The other common argument doesn't so much attack EMD workers as defend Caterpillar. The argument goes like this: Despite all the condemnation of Caterpillar for enormous greed, it is doing what all large corporations are required to do in law: act in their own self interest. A corollary to the above is that corporations must first worry about delivering profits to their shareholders. CEOs worry more about shareholder profits than workers salaries, and this is as it should be.

The folk prattling on like this are at best naive. I could find other suitable adjectives but I'll stop with naive.

As I retired fellow, I follow the markets. I have a number of self-directed RSP plans in two banks. I bought my first stock when I was around ten or twelve --- I still have my Richardson Securities receipts misplaced somewhere in my hoarder's basement. In my years of investing, I have come across lots of examples of stuff that flies in the face of the above naive beliefs.

The gravy train hasn't passed. It is just stopping in far more upscale neighbourhoods. Check out the massive increases in the annual pay to CEOs. Companies seem to have no problem paying shockingly high salaries, plus bonuses, even to CEOs of money losing companies. Even the threat of impending bankruptcy does not knock all the zeroes off many a CEO's wage. And performance does not seem to be demanded of CEOs. When a company is going down the tubes, how can a CEO call his performance worthy of a seven or ten figure income?

Let's take a look at some recent CEO pay and how the companies they managed, managed. My favorite in this list is Yellow Media. I owned this for a time. It came highly recommended by Scotia McLeod as a core investment in an income portfolio. Luckily, my ScotiaBank adviser encouraged me to dump it. Accept my losses and run, he said. I did.

Yellow Media

The worst shareholder reward for the highest CEO pay may be Yellow Media (YLO). CEO Marc Tellier took home $8.9 million despite constantly declining profits and stock price. YLO racked up recent total annual return number greater than negative 90 percent! A company that just a few years ago was set to hit $20 a share is selling today for 20-cents.

A few years ago Amanda Lang interviewed Tellier for a ROB report. She caught up with the CEO on the ski slopes outside Montreal in the middle of the week. Lang tells us: "This interview is taking place on a Monday — technically speaking, it's work, even though Tellier is wearing ski goggles and mustard yellow ski boots."

Read the story, One good run, and ponder the question: "Just who is riding the gravy train?"

Air Canada

The CEO of Air Canada (AC.B), Calvin Rovinescu, earned $4.5 million while the Canadian airline racked up frequent annual losses. While Rovinescu basked in the glow of a seven figure income, investors suffered the pain of a very rough landing. Air Canada delivered a five-year return of negative 43.5 percent.

Nordion

According to How To Invest Online, the source of this CEO pay info, it is a mystery why Stephen DeFalco, CEO of Nordion (NDN), merited pay of $13.1 million. The small company under his leadership, he has since been replaced, made large losses and shrunk considerably taking investors on a steep downhill ride.

CEO pay and bonuses are wildly out of line. One need look no further than the daily paper to know this. Recently it was learned that CEO Cliff Nordal, while heading the two hospitals in London, pocketed about $730,000 a year, plus another $100,000 in taxable benefits, a $1.17-million bonus and a pile of privileges like a leased Lexus and country club membership.

During Nordal's tenure at St. Joe's my daughter gave birth there. The washroom adjoining her room was dirty. There were drops of blood on the floor. The staff were informed but because of staff shortages, no one was available to clean the bathroom for hours. My daughter didn't need the bathroom, she was busy delivering a baby, all went smoothly, the staff was excellent.

Still, I have to think that a hospital that cannot find the staff to clean a patient's bathroom before they are admitted should not be paying bonuses to its CEO for his superior performance in running the place.




Friday, February 10, 2012

I can help!


Fiona is now a full 29 months old. I'm amazed at her fast developing abilities and her enthusiasm for life. She has a great can-do, oh-so positive outlook. She pushes herself boldly into every activity that she can.

"Pick me up! Pick me up!" is her constant refrain. She desperately wants to be a part of absolutely everything. She is no longer content to be just a spectator; She insists on participating.

When dinner is being made, her favourite spot is the kitchen counter. She's actually quite good at stirring stuff. She can pour both liquids and powders without spilling. Grating cheese was a bit beyond her nascent abilities, but don't try and tell her that. She is not quite oblivious to her failures but she doesn't want to dwell on them. She wants to overcome them.

Take scissors. Fiona has a small pair of child's scissors. Her first attempt at cutting paper was a disaster. It was very slow going. She asked for more paper, sat down and set to work cutting that paper into small pieces. She wasn't too proud; She asked for help now and then. She watched us use her scissors, she listened to our instructions, and she practised.

She's pretty good with scissors now. I don't think it will be long before she can grate cheese.

__________________________________________________

I like to keep an eye on Fiona's development and how it compares to that of other children her age. I discovered that two-year-olds "like to imitate the behavior of adults and others. They want to help with household tasks. . . . They follow simple directions."

Yes, that's my little granddaughter.

Thursday, February 9, 2012

Sun Media serves baby boom bunkum

My local paper, The London Free Press, is not so local anymore. It carries a lot of bunkum from the QMI Agency run by Quebecor and fed into the paper from the Sun Media chain. One big bit of wasted paper was a recent article by Thane Burnett.

The moment I read the headline, I knew I should move on. Nothing to see here, as they say. The red flag on the story was the phrase "baby boomers." Burnett tells us that he is a baby boomer.

"We've come up with some great advances," he tells us: non-dairy creamer, computer games, soft contact lenses, the ATM, Hacky Sack and even liposuction. I thought non-dairy creamer was created in the '50s by Robert Rich of Coffee Rich fame. Rich died in his 90s a few years ago. He was not a baby boomer.

I checked and my memory is better than Mr. Burnett's. The New York Times agrees with me. I decided to check the rest of the great advances the Sun Media reporter claims for baby boomers.

William Higinbotham
Computer games: one of the first was Tennis for Two developed by William Higinbotham and introduced on October 18, 1958, at one of the Brookhaven National Laboratory's annual visitors’ days. Two people played the electronic tennis game with separate controllers that connected to an analog computer and used an oscilloscope for a screen. Higinbotham was not a baby boomer.

Soft contact lenses: According to All About Vision, Czech chemists Otto Wichterle and Drahoslav Lím are credited with creating the first soft contact lens material in 1959. Their discovery led to the 1971 launch in the U.S. of Bausch & Lomb's "SofLens" contacts. Neither Wichterle nor Lim were boomers.

ATMs: Don Wetzel, an executive at Docutel of Dallas company, is credited with conceiving the modern ATM. A Chemical Bank advertisement in 1969 announced the first ATM in everyday: “On Sept. 2, our bank will open at 9:00 and never close again!” Don was not a baby boomer.

Liposuction: This is a tough one. A french model in the '20s had her legs reshaped. It resulted in her death. Not an auspicious start for a rather invasive medical procedure. Decades later an Italian father and son team are credited with preforming the first successful liposuction. But it is Dr. Yves-Gérard Illouz of France many call the father of today's technique. Illouz was born in 1939. Not a baby boomer.

Which brings us to Hacky Sack: Finally, a baby boomer creation. Hacky Sack was created by two young Americans, John Stalberger and Mike Marshall. Sadly, Marshall died of a heart attack in 1975 at the age of 28.

I'm one of those who believe that treating an entire group of people born over a period of about two decades as one monolithic block is foolish. Life is a continuum. Even those who grew up in the '50s were not all influenced by the same music. Those born in 1946, spent the better part of their first decade without Rock 'n' Roll.

I know boomers whose first memories of pop music is stuff like Rosemary Clooney's  Come On-a My House, David Whitfield's Cara Mia, Mario Lanza's Be My Love, Lee Lawrence's Crying In The Chapel . . . Boomers born just five years later were influenced by Chuck Berry, Buddy Holly, Jerry Lee Lewis, Little Richard. If five years can make such a big difference, just think of the difference  twenty years can make.

Look at anything deeply and you will find that just a few years can make a big difference in what influences folk. Take education. Think math. If you are an early boomer you missed New Math. If you were a late boomer you got nailed.

Exactly what can boomers accept credit for? Boomers listened to early rock but they didn't write it. Nor did they perform it. Mick Jagger was born in 1943, Paul McCartney in 1942, and Jimmy Page in 1944. Not a boomer among them.

You want some real boomer music? Think bubble gum. I've posted some music written and performed by boomers. Co-writer was Joey Levine, born in 1947 in New York City. He also fronted the Ohio Express famous, or infamous, for Levine's Yummy Yummy Yummy, I've Got Love in My Tummy. Yes, we've come up with some great advances, Thane Burnett.



Of course, this post is somewhat tongue in cheek. Folks born during the baby boom years have been responsible for a lot more than just bad music. There were lot's of incredible people born in the period from 1946 to 1965, and many of these folk have achieved a great deal.

That said, the only thing all boomers share is the bulge they represent on population charts. And now, approaching their senior years, they will most certainly be responsible for a big deflection. As Jim Morrison warned: "Nobody gets out of here alive."

Oh, and Jim Morrison of the Doors wasn't a baby boomer.

Tuesday, February 7, 2012

MP Susan Truppe is being silly

MP Susan Truppe refused to stand with the locked out London workers.

Saw a tweet calling attention to a survey posted by MP Susan Truppe. The tweet called the survey silly. Truppe defended her survey tweeting back, "I don't see how its silly to ask if constituents feel its important or not."

Once attracted to her site, I noticed the MP had posted a statement on the labour dispute at Electro-Motive Diesel.Talk about silly. Why quibble over a survey when you've got a messed up statement clearly showing that the MP doesn't know much about the EMD operation in London.

She tells us, "It is important to note that, since the 1930’s, the EMD plant has been under American ownership." Huh? EMD is an American company and always has been. It was incorporated in Cleveland, Ohio in 1922 and bought by General Motors Corporation in late 1930. There was no facility in London until 1950 when GM opened the London EMD branch plant.

The EMD story gets interesting, with a strong feeling of deja vue, when we get to 1993. Read part of the story carried by the Chicago Tribune at the time.


"World's Largest Locomotive Builders" reads the sign outside the United Auto Workers Local 719 in southwest suburban La Grange. For more than 50 years, workers at the massive General Motors Corp. Electro-Motive Division plant down the street could claim the title without controversy.

Then last month the last two blue, orange and black diesel locomotives rolled out of the plant and into service for Metra, the Chicago area commuter rail system. The sign became a depressing reminder of past glories.

Only a dozen years ago, the sprawling, 3.6-million-square-foot factory was filled with the clang of metal presses, the hiss of welders, the cacophony of 13,000 skilled workers, and celebratory bell-ringing as they finished each of up to six locomotives a day. These 180-ton, 3,800-horsepower machines selling for more than $1 million apiece were not only industrial behemoths but also computerized, precision-finished, high-tech products.

Now fewer than 3,000 people are on the rolls, including 1,600 active production workers. The main bay where locomotives were assembled, a vast work space covering several football fields and rising nearly six stories, stands empty and silent like an abandoned cathedral.

The remaining workers still build diesel engines and components for locomotives that Electro-Motive now assembles at its Canadian factory. But management is busy shrinking the plant's size and work force and sending work to outside contractors.

It is also shrinking the hopes of union leaders who gambled on working with General Motors to save the plant."

The work that was shifted to London about two decades ago has now been reclaimed.

MP Susan Truppe wrote, "I remain hopeful that both the Canadian Auto Workers (CAW) and EMD can return to the bargaining table and find an amicable solution as soon as possible." This isn't just silly, it's insulting.

London has been losing its grip on the production of EMD locomotives for years. As early as 2000 at least, in order to meet the delivery schedule for 1,000 SD70Ms for Union Pacific, EMD spread workload among:
  • GMLG in London, Ontario, Canada (assembly and paint)
  • Bombardier-Concarril, Sahagun, Mexico (assembly and paint)
  • SuperSteel Schenectady, Inc. (SSSI), Glenville, N.Y. (assembly and paint)
  • Alstom at Hornell, N.Y. (final finishing and final paint, after assembly by SSI)

Long before Caterpillar entered the picture, EMD was one tough employer. Despite union efforts to prove the La Grange workers could compete, the workforce continued to shrink even after locomotive assembly went to London. The union worked hard for a year and a half to meet a company production goal for electrical coils, after the goals were met, the company shipped the production out anyway.

The move to open a new assembly plant in the States was underway while EMD was still under the control of the private equity groups. When Muncie opened last October, the writing was on the wall. Muncie was closer to suppliers, 50 percent larger and somewhat more modern than London. Assembly in Indiana skirts currency risk and the new workers are non-union. They will work for working-poor wages.

MP Truppe may have believed CAT would return to the bargaining table, but maybe Truppe also believes in Santa Claus and the Tooth Fairy. The last two beliefs are not as silly as the first.

Monday, February 6, 2012

The discreet charms of the bourgeoisie investments



Last Friday (Feb. 3, 20120 the Electro-Motive Diesel plant in London, Ontario was closed. A day earlier the Veyance Technologies plant in Owen Sound, Ontario was closed. These two closures threw hundreds of workers out of work and left two communities to deal with the fallout.

These two closings, separated by about 225 km., had at least one thing in common: John S. Hamilton. Hamilton is the present CEO and president of Veyance Technologies and from 2003 to 2010 he was CEO and president of Electro-Motive Diesel.

I found this interesting and decided to learn a little more about Mr. Hamilton.

I learned that this gentleman is also, or I should say was also, the CEO of the Tokheim Corporation. He took over the helm of Tokheim in 2001, and by November 2002 the company had filed voluntary petitions for relief under Chapter 11 in the U.S. Bankruptcy Court.

Hamilton said at the time: "We are working through the bankruptcy process with our various constituencies to complete this sales process as quickly as possible. Our goal is to smoothly transition our businesses into the hands of new owners."

In 1898 John Tokheim, an Iowa hardware store owner, invented a pump to dispense kerosene and gasoline. It was such a fine pump that the business was purchased in 1918 and moved to Ford Wayne, Ind. from Cedar Rapids, Iowa.

Today, Tokheim still brags it's a world leader in fuel dispensing technology. It also brags it's French.

The French didn't get all the Tokheim operation. Back in 1986 Tokheim acquired the business they operated as Gasboy International, Inc. until March, 2003, at which time they sold their prize to the Danaher Corporation.

And how has that sale worked out? Well, on a bulletin board I read:
"Gasboy was a great company that myself and 249 other people use to work for until Danaher acquired us and shipped part of our plant to North Carolina to consolidate us with Gilbarco and of course they sent the rest of it to Mexico.

"Thank you Danaher."
There's a sad network of closures associated with the closure of the London EMD plant. And, contrary to what some like to argue, business closures of this nature do not always result in gains for the shareholders of the companies involved. But, in all the wheeling and dealing, there are most certainly winners and losers. The winners may not be long time owners, but johnny-come-lately private equity investors, and the losers are all too often the long time workers, and in some cases long term shareholders.

For a little more info, let me hand you off to a linked Economist article.

Thursday, February 2, 2012

Light shows aren't cheap




Getting London, Ontario, to enliven the city core with a 600 thousand dollar plus light show celebrating the World Figure Skating Championships was a tough sell. Mayor Joe Fontana and Tourism London both made strong appeals and in the end the city council signed on to the dream. The price tag, the original sticking point, was shared by various companies and levels of government.

Screen grab from London videographer Rael Wienburg's work.
Years ago during a visit to Paris my wife and I were fortune enough to be in the City of Lights during a festival which saw major buildings throughout the city artfully illuminated. The show was memorable, very imaginative. The projected light transformed Greek columns at the front of one building into giant barber poles or animated candy canes. Neat.

Since first experiencing that festival of lights, I've been quite interested in the various light shows presented in cities around the world. There is no doubt light shows are totally cool. I can't see anyone disputing that. But, they are expensive and that is not in dispute either.

I did a lot of searching of the Internet, and except for London, I never did find posts detailing the total cost of presenting a complex light show. But from what I have read, I'm quite sure $600,000 would not cover the cost of some of the amazing light shows that have been presented around the world. London may well have gotten a bargain

For the National Capital Commission just to update Mosaika, the light show beamed onto the parliament buildings in Ottawa, the commission was willing to pay up to $260,000, or a bit over $14,000 a minute.

A light show for Ralph Lauren back in 2010 reportedly cost in the millions. Watch the You Tube video revealing some of what was done to make the dream a reality and a cost well into seven digits is easier to see than the floating, revolving red purse featured in the show -- and we all see the floating purse.


And light shows are not always videos projected onto buildings. Recently Ghent, in Belgium, made headlines around the world with a massive 55,000 LED creation, a cathedral in lights. Even in pictures, the immediate reaction is, "Wow!"

The light show in London, Ontario, was created by the Moment Factory out of Montreal. Going outside of one's own community to find folk with the talent and expertise to produce a 21st century light show is common. These presentations are not the simple, liquid light shows of the psychedelic '60s.

Technology used in Lyon can be found an hour from London.
A show in Lyon, France, was put together by Christie Digital Systems, Inc. Originally an American company, I believe, this company was taken over by Japanese interests and headed by Kenji Hamashima.

Hamashima was also head of Christie Digital Systems Canada. Christie Canada was the company responsible for handling the visuals at Tedx Waterloo. Yes that Waterloo, London's nemesis an hour east along 401.

Christie itself is located in Kitchener, London's other urban foe. It is interesting that London felt it necessary to go out of province to find a company to produce its show when help was so near at hand. (Who knows, maybe some of the artistic computer geaks in London could have assisted in this project if the production company had been located an hour away instead of eight.)




And while London traveled to Montreal to find a producer, Quebec City traveled to Kitchener. Christie produced the magnificent light show celebrating the French Canadian community's 400th anniversary.





To see more images from light shows from around the word google this: Festival of Lights

Let me start you off with a link to the BBC slideshow featuring the Lyon Fete des Lumieres.