Corporate rule

Here's a question; why has our government worked so hard to make a "deferred prosecution agreement" (DPA) available to SNC-Lavalin?

Here's another one; why has no mainstream media outlet ever investigated how hedge fund sharpie Gerald Schwartz was able to more than double the value of Husky Injection Molding in less than four years?

And another; why was Hunter Harrison universally lauded as a hero in our mainstream Canadian media for eliminating over 5,000 excellent working class jobs at CPR?

Here are some tentative answers.

The purpose of a DPA is to allow corporate entities that engage in bribery, bid-rigging, and other nefarious business practices to get off by paying a fine instead of being charged with a crime. Corporations love it! Paying the fine becomes just another cost of doing business, just like the original bribe. The Trudeau government's rationale for having slipped a DPA provision into law last year, in the back pages of an omnibus budget bill, is that Canada needs to have a level playing field vis-a-vis our competitors. Ergo, if the UK and US go easy on corporate crooks, we must too, or we won't be competitive.

Husky was the life's passion of Robert Schad, a German immigrant who started out with a little machine shop in the mid 50's. He famously made Husky one of the most desirable workplaces in Canada by providing not only good wages, but unprecedented employee perks, from free meals to free day-care to on site gyms. Getting on in years, he sold his baby to Gerald Schwartz's Onex in 2007 for just under a billion dollars.

Less than four years later, Schwartz sold Husky on to another hedge fund for two billion. How did Schwartz add a billion dollars in value to the company that Robert Schad had spent a lifetime building up? He ripped out all that feel-good stuff that detracts from the bottom line, that's how. That's what "building value" looks like in the world of hedge fund operators. 

That's appalling, disgusting, scandalous... but Gerald Schwartz is a Very Big Deal who just donated $100,000,000 to the University of Toronto. No newspaper publisher, let alone reporter, is going to touch that story with a fifty foot pole, because it would be their last story.

Canadian news media lapped up every drop of mendacious idiocy that dripped from Hunter Harrison's lips as Harrison and his hedge fund boss Bill Ackman destroyed more than 5,000 working class jobs at the iconic railroad. Harrison was "the new sheriff in town," don't you know. He was going to "change the culture" at CPR.

And he did. He replaced a culture of collegiality with a culture of fear, and he and Ackman walked away with a cool two billion for their troubles. For that, they are regarded as business geniuses by our business press.

That's what corporate rule looks like. There are innumerable case studies to choose from. Eddie Lampert looted Sears Canada to the tune of billions, leaving 16,000 pensioners in the lurch, but our media claim the company failed because of changing consumer tastes and inept management. The same corporate media still proclaim NAFTA a resounding success, even as all evidence shows it decimated Canada's manufacturing sector.

Which brings us to our current Prime Minister. He serves as an invaluable cover for the greedbags who call the shots behind the scenes. All the talk about feminism and diversity and human rights is designed to take our eye off the fact that he's 100% committed to corporate rule.

Here's a bold prediction. SNC-Lavalin will yet get their DPA. Our media, both corporate and the state broadcaster, will keep hammering away at the credibility of JWR and the (completely bogus) claim that 9,000 jobs are at risk.


Corporate rule will prevail.

CPR's Hitman Harrison tired of being bullied, fights back

Yes, the 52 million dollar man has had enough!

Bullied near to death, he's been.

First of all, bullied by the City of Vancouver.

And if that isn't bad enough, bullied a thousand times over by the thousands of Vancouverites who have built wee bully gardens along the Arbutus rail corridor.

Enough is enough!

It's time to nationalize Canada's railroads

It has taken an act of parliament to coherce Canada's rail duopoly to move prairie grain to ports for export.

Apparently the invisible hand of the free market wasn't enough.

Coming from the corporate bag-lickers in the Harper gang, this market intervention could not have been easy.

They are in effect acknowledging that the "free market" doesn't work.

Which it obviously doesn't.

Both of Canada's national railways were built with huge public give-aways in the form of land concessions and cash hand-outs. The railways have been more than happy to keep the land and keep the handouts. They've not been that happy about keeping up their end of the bargain.

Their end of the bargain was to provide rail transport of both people and commodities from coast to coast. Those railway ties were the ties that bound Canada together.

CP Rail had a wildly self-promoting letter in major Canadian papers the other day signed by Hunter Harrison, the American who has presided in turn over the demise of both CN and CP. The letter was an apology for the cold weather. That's why CP hasn't been able to ship last year's grain crop.

Hunter neglected to mention that since he arrived at CP Rail, 400 locomotives and over 10,000 rail cars have been idled.

I'm no expert on how railways work, but I have a hunch that idling 400 locomotives and 10,000 rail cars would reduce the amount of product a railway could carry.

Which would go a long way towards explaining why Canada's 2013 grain harvest is rotting in grain elevators instead of being shipped to market.

Curiously enough, one never encounters stories about Bakken crude not being able to find rail cars to take it to market.

The annual pilgrimage

This is the time of year we like to head north for a few days.

We camp on the north shore of Lake Superior, along the Schrieber - Marathon stretch of the Trans-Canada Highway. We have a campsite where we can see the lake and the CPR line that cuts overhead along the steep Canadian Shield cliffs.

This is an area that always knocks you out with it's natural beauty. The rocks, the trees, that great inland sea. For me it always draws me into history as well.

The history of the CPR for example.

It's everywhere up here. In fact, it's everywhere all over the country.

The Scottish investors who were behind the CPR got $25 million cash and a land grant of 25 million acres for building the railway.

The history of the CPR is in flux again. Some New York hedge fund manager figures he can milk a few billion out of the old cow. He's just parachuted an American CEO in after winning a proxy battle to get rid of the old management.

Nothing new in that. After the first year of construction of the CPR, the owners turfed out their senior management and brought in an American. He made himself rich building that railway.

That railway and the subsidiaries that have been spun off from it have made many people rich over the past 130 years, so maybe there's enough juice left for this latest crew of paper-shufflers.

None of which takes away from the achievement of those laborers and blacksmiths and miners and carpenters and engineers and surveyors who actually made that rock cut we're looking at, and put the tracks up there.

But don't get me started... I come here to get away from thinking.

Giant killer...

The Globe and Mail is over the top with its reportage on Bill Ackman's "coup" at Canadian Pacific Railway.

"Corporate Canada has never seen the likes of Bill Ackman, a brash hedge fund manager..." the lead story in the business pages informs me.

Truth be told, corporate Canada has seen brash hedge fund managers fuck over the locals lots of times. Nothing new about the Ackman assault on CPR.

That this hedge fund twat can rattle the cage of one of Canada's premier corporations says a lot about how deficient our regulation regimen is.

It doesn't say much about anything else.

Ackman can pull this off by taking a relatively small position in CP stock and then talking the talk about "shareholder value".

Ackman's track record shows that he's only interested in shareholder value as long as it's about the shares he just bought. He's not a manager and he's not a visionary.

His vision for the CPR doesn't extend beyond goosing the share price just enough so he can get out at a tidy profit.

If he has to sow a little mayhem to make that happen, well, that's just the way he operates.

Hedge fund hijinx

Bill Ackman isn't what you'd call a patient investor. None of that Warren Buffet-style hold-it-forever nonsense for him. Ackman is a man in a hurry.

Bill's hedge fund Pershing Square Capital has only been a minority shareholder in the Canadian Pacific Railway for a few months and already he's whining to the Wall Street Journal about how his investment is underperforming.

As a minority shareholder of a few months standing he demands changes, big changes, starting at the very top. He wants to see a new CEO at the helm.

That's the first step in "effectuating a cultural transformation", which is hedge fund jargon for kicking the shit out of the workers. CPR's workforce is heavily unionized and enjoys ridiculous benefits like paid overtime and a dental plan. By bringing the company into the 21st century Ackman should be able to cut hundreds of millions in operating costs. That'll bring up the share price enough that Pershing can dump it's shares, walk away with a few hundred million in profits, and carry on with effectuating a cultural transformation on the next victim.

Along the way Bill Ackman builds nothing, invents nothing, discovers nothing, and produces nothing of any value. In return, society rewards him by making him a billionaire.

That's the beauty of capitalism!

north of superior

I'm sitting at my campfire, overlooking the Little Pic River and Lake Superior. A freight train is chugging along a rock cut overhead. It's beautiful here.

This is a trip I need to make every couple of years. A pilgrimage.

Seventy something years ago my grandfather got a job here, logging along the Little Pic.

There aren't a lot of jobs up here anymore. Yesterday I bought the local paper at a variety store in Marathon. The clerk was a guy in his mid fifties. Until a couple of years ago he worked at the Marathon paper mill.

A good gig. Sixty thousand a year before overtime. The mill is closed now. When I was up here 25 years ago the place was booming. Construction workers from the big gold mines on the other side of Marathon lived in the park I'm camping at.

At the tourist info center just before Marathon I learned that Barick Gold is still pulling 4-500 thousand ounces of gold out of the ground here every year. But the construction boom is long past and Barick can do this with just a few hundred workers.

Another train goes by. There are probably campers who would find this distracting. I find them beautiful. Even more, they remind me of what we used to be able to achieve in this country.

Imagine, a railway from coast to coast!

Canada was able to do this 130 years ago. We could never do it today.

That's progress.

The front page story in the local paper is all about Barick Gold giving the local medical center a contribution of $100,000. Just like that - no strings attached.

One hundred grand.

Oh, maybe they'll have to call it the Munk Medical Center.

Peter Munk survived the shame of bankruptcy and reinvented himself as the founder of Barick Gold. The 500,000 ounces they get out of their Marathon mine translates into something around three quarters of a billion dollars a year.

This gift to the Marathon Medical Centre is emblematic of the Canadian spirit; great Canadians don't just take and take and take, they also give back.

So Peter Munk reinvented himself as a gold miner.

Buddy at the variety store reinvented himself as a variety store clerk, and my grandfather, after being drafted into the Wehrmacht in 1939, reinvented himself as a logger.

Another train.

Imagine, a railway from coast to coast! If we tried that today it would never happen.

Today it takes twenty years of planning for 10 kilometers of subway. Train tracks across the country?

I figure at least a hundred years for the feasibility studies. Then the environmental impact studies.

Imagine all the sensitive wetlands a trans-Canada railway has to cross!

At least a couple of hundred years for that.

Then the aboriginal land claims...

In Nippigon, a couple of hours drive west, I ask the clerk in the liquor store where  locals go to work.

Fort McMurray she says. She's not trying to be funny.

Nippigon is hurting. All the towns along the north of Superior are hurting.

The jobs are gone. Except the few hundred still digging gold out of the ground for Peter Munk.

It seems a lifetime ago, but I remember Mulroney campaigning on his "job jobs jobs NAFTA jobs jobs jobs NAFTA" platform in 84.

Sounded fishy to me.

You mean our stupid brown brothers south of the Rio Grande only want the shit jobs?

We're gonna keep all the good ones?

Oh yes, not only keep all the good ones; there'll be more more more!

Well, people voted for that.

That's democracy, I guess.

Another train.

Mulroney probably gets a bad rap.

The mere mention of his name conjures up images of cash-stuffed envelopes being furtively passed from hand to hand in sleazy hotel rooms.

In the first place, and let's do Mulroney justice here, they weren't sleazy hotel rooms - they were the poshest of posh.

Secondly, I think we forget the leadership role that Brian Mulroney played in the boycott of apartheid South Africa.

Those were turbulent times.

Nelson Mandela had been jailed as a terrorist for many years, and although that was before the Palestinians gave terrorism a bad name, it still took courage for a world leader to stand up for him.

Brian Mulroney took that stand.

Apartheid South Africa had one main export - the Krugerrand. The Krugerrand was the gold coin of choice for people around the world who needed to hoard gold.

I don't know why people need to squirrel away gold - I'm sure there are lots of legitimate reasons. When Brian Mulroney took his stand against apartheid, the Krugerrand had but one competitor - the Canadian maple leaf gold coin.

Here's another train.

When I first heard these trains many years ago I couldn't figure out why the brakes were squealing at the same time as the engines were pulling. Then I realized that the back half of the train was still going downhill while half a mile ahead the engines were already pulling uphill. They are a marvel, these trains.

So Buddy at the variety store thinks the mill jobs might come back. Apparently some politicians together with some wheeler-dealer types have a plan afloat that will use the mill to make bio-fuel to use in Ontario's coal fired electricity generating plants.

I wish him well.

So NAFTA came in.

The jobs on the north shore of Superior are gone.

The factories in the south are gone to Mexico.

Brian Mulroney left politics and became a director of Barick Gold.

Peter Munk has the biggest gold company in the word.

Nelson Mendela got out of jail and became President of South Africa. He's celebrating his 93 birthday today. All's well that ends well.

Except for Buddy at the variety store, maybe, but we'll see.

So my grandfather gets drafted, goes to war, and gets captured in the first week. My other grandfather gets sent to the eastern front and freezes to death in a snowdrift.

Fate.

Here on the north shore the German POWs considered themselves the luckiest Germans in the world.

Every morning a guard would take twenty prisoners out for a nature hike. You can see pictures of the guards and prisoners at the information center at Neys Provincial Park.

The prisoners had a handball club, orchestra, boxing team, wrestling team... escape attempts were rare indeed.

You can see it in the pictures...

Fate.

These men, some guards, some prisoners, were all in this together. If not for fate, they'd have been somewhere in Europe trying to kill each other.

I hear another train.

I don't think we could build a railway across Canada today.