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SNC-Lavalin’s probable exodus from Canada is a national shame
MARCH 29, 2019 | The Globe and Mail | by ERIC REGULY EUROPEAN BUREAU CHIEF
LONDON.

Head offices abandon Canada in two ways – slowly or abruptly.

The slow approach sees the head office, usually after a foreign takeover, gradually lose relevance, to the point it becomes a branch plant and simply fades from view over several years. The abrupt approach, again usually after a foreign takeover, sees the head office vanish virtually overnight, as Falconbridge did a decade ago after it was snapped up by mining giant Xstrata. SNC-Lavalin Group Inc. has been slowly disappearing from Canada for years. That’s mostly SNC’s fault – it hasn’t won enough work to keep its Canadian headcount intact......SNC’s departure would come as a serious blow to Canada Inc. Since the middle part of the past decade, Canada has lost dozens of head offices as Canadian investors lunged at the prospect of fat takeover premiums. Many, perhaps most, of the foreign companies doing the buying promised to keep the Canadian head office intact. But those assurances proved to be either wildly exaggerated or outright lies.

Among the head offices that have disappeared are Alcan, Dofasco, Inco, Molson and a chunk of the Canadian oil industry. Recently, Goldcorp Inc., Canada’s second-biggest gold producer, accepted a takeover offer from Colorado’s Newmont Mining Corp., meaning that Goldcorp’s Vancouver office faces a serious downgrade.

Aside from the loss of stock market listings, the elimination of large head offices rots the country’s social fabric. Head offices provide high-paying, high-skilled jobs and create an ecosystem of spinoff jobs, from accountants and chefs to limo drivers and lawyers. Head offices bolster the financial services industry, which underwrites the bond and equity offerings and sponsors the arts and charities. When corporate headquarters disappear, so does talent.
Eric_Reguly  exodus  head_offices  sellout_culture  SNC-Lavalin  social_fabric 
march 2019 by jerryking
Another one bites the dust: Goldcorp sale a further example of the hollowing out of Corporate Canada - The Globe and Mail
ERIC REGULY EUROPEAN BUREAU CHIEF
ROME
PUBLISHED JANUARY 14, 2019

Toronto’s Barrick Gold Corp. always wanted to team up with Newmont Mining Corp. of Colorado. Merging the two giants, which have adjoining operations in gold-rich Nevada, would have created an unassailable industry leader and reduced costs by an estimated US$1-billion a year. On paper, it looked like a dream deal. But it never got off the ground, in good part because Barrick founder Peter Munk wanted the new company to stay in Toronto, not move to Denver.

Were he alive today, Mr. Munk – a Canadian patriot who believed in the value of head offices – would be distraught. In the fall, Barrick bought Randgold Resources but handed management control to Randgold’s executives, who promptly gutted Barrick’s Toronto headquarters, leaving the world’s top producer with a mere 65 employees in its echo-chamber offices on Bay Street. The deal was, in effect, a reverse takeover. The new Barrick will be run from the Channel Islands........Toronto still fancies itself the mining capital of the world, a bold claim given that it is now largely devoid of A-team and even B-team players. Barrick was the last miner in Canada that could be considered world class, and it’s fading from view as a Canadian company. All the big base-metal names are gone, bar Teck Resources. Goldcorp is going. Who’s next? Could it be the well-regarded Agnico Eagle Mines (market value $12.4-billion) or B2Gold ($3.7-billion)?

Aside from the loss of their Toronto stock-market listings, the endless elimination of head offices across Canada rots the country’s social fabric. Head offices provide high-paying, high-skilled job opportunities and create an ecosystem of spinoff jobs, from accountants and chefs to limo drivers and lawyers. Head offices bolster the financial-services industry, which underwrites bond and equity sales and sponsors the arts and charities. When head offices disappear, so does talent. If you want a top-level management job in mining, an industry that shaped Canada, forget Toronto. Today, the opportunities are in London, Johannesburg and Melbourne...........In a largely open economy such as Canada’s (banks, big telecoms and media companies are still protected from foreign takeovers), it’s hard to stop head offices from disappearing. The cult of shareholder capitalism produces unsentimental results, such as the eradication of underperforming companies. But Canadian investors and managers have proven time after time that they’re happier to sell rather than build, happy to take a quick buck rather than take a long-term gamble on a double or triple. The cost of doing so is a hollowed-out corporate sector – a branch-plant economy.
Barrick  Corporate_Canada  Eric_Reguly  Goldcorp  head_offices  hollowing_out  Peter_Munk  sellout_culture  social_fabric 
january 2019 by jerryking
The gutting of Barrick Gold – it didn’t have to be this way - The Globe and Mail
ERIC REGULY EUROPEAN BUREAU CHIEF
ROME
PUBLISHED JANUARY 4, 2019

Most big companies Eric Reguly followed – Inco, Falconbridge, Alcan, Dofasco, Molson, Fairmont, Four Seasons, among others – were flogged to foreigners, their head offices downgraded to branch plants or eliminated. ....Canadians were sellers, not builders.....If there was one company that was safe from the takeover onslaught, it was Barrick Gold, I thought......At the time, Barrick was run by its founder, Peter Munk, the Hungarian-born Canadian patriot who wanted to build the world’s biggest gold miner. After achieving that goal, he mused about creating a diversified resources giant, the equivalent of a BHP Billiton or Rio Tinto under the Maple Leaf. But he was too late: By the time he was ready to put the pieces together, in the middle part of the previous decade, all his potential targets, including Inco, had been plucked clean from the Toronto stock market.....
Eric_Reguly  branch_plants  head_offices  hollowing_out  John_Thornton  large_companies  LSE  mining  Peter_Munk  Pierre_Lassonde  sellout_culture  TMX  Barrick  Corporate_Canada 
january 2019 by jerryking
Why traditional retail hasn’t hit rock bottom — yet
October 4, 2017 | The Globe and Mail | ERIC REGULY.
.....it's fashionable—and not wrong—to blame Amazon for most of the retailers' woes, other factors, from stale retail formats to the new anti-stuff movement, are at play too. Put together, the financial and cultural forces battering the retailers seem relentless.

The outlook is so grim that Bespoke Investment Group of Harrison, New York, invented a "Death by Amazon" list of 54 retail stocks that it thought would get whacked by Amazon and other forces conspiring against the sector......Traditional retailing, of course, is not entirely doomed because only the brave or bone-headed would buy some expensive items—diamond earrings, high-end suits, musical instruments, mattresses, Persian carpets, prescription sunglasses—without hands-on examination. And some shoppers, me among them, like the pleasure of propping up independent stores that sell high-quality goods.

But I don't shop much for general merchandise any more, because I am sick of clutter and, with university fees for my kids, don't have the spending power for non-essential items..... blamed shifting consumption patterns for much of the old-style retailers' distress........ blamed shifting consumption patterns for much of the old-style retailers' distress...money spent on smartphones and wireless services is unavailable to be spent on T-shirts and shoes.....middle-class incomes have stagnated, healthcare costs have climbed, and highly leveraged consumers are more interested in paying off debt than buying new TVs. Something had to give, and it was the department stores, whose shares are down by 40% or more in the last year or so (Macy's, J.C. Penney)......Amazon's endless virtual aisles sells Fiat cars in Italy, Nike shoes and and Sears' Kenmore appliances. Amazon recently bought Whole Foods and dropped its prices, which put the mainstream supermarkets into a panic........ 55% of product searches start on Amazon, far more than the 28% that start on search engines. The popularity of Amazon Prime (which provides free, two-day delivery as well as TV and movie video streaming) and the construction of massive warehouses have accelerated its growth. .....captures an estimated 40% of every shopping dollar spent online and is already the second-biggest apparel seller in the U.S., behind Wal-Mart. No wonder the traditional retail sector is in free fall.
And here's another question: As traditional retailers weaken or go out of business, and anchor stores disappear from North America's crazily over-malled shopping geography, can the real estate investment trusts be far behind? Betting against Amazon seems a fool's game.......
Eric_Reguly  retailers  decline  bricks-and-mortar  shifting_tastes  Amazon  REITs  shopping_malls  bankruptcies  department_stores  seismic_shifts  high-quality 
october 2017 by jerryking
Summer reads: Globe writers on the book that changed them - The Globe and Mail
STAFF
THE GLOBE AND MAIL
LAST UPDATED: THURSDAY, JUN. 29, 2017

Eric Reguly - Joseph Heller’s Catch-22
Liz Renzetti - Katherena Vermette’s debut novel, The Break.
Joyita Sengupta - Jhumpa Lahiri’s The Namesake.
Eleanor Davidson - Roald Dahl's Going Solo.
Ian Brown - Nicholson Baker’s U and I: A True Story changed the way I thought about books, writers, writing, reading and what it meant to be honest on the page.
Victor Dwyer - Charlotte Gill's Eating Dirt: Deep Forests, Big Timber, and Life with the Tree-Planting Tribe.
Rosa Saba - Markus Zusak's I Am the Messenger tells the tale of a young man in a stagnant existence whose life is changed by a series of mysterious missions, in which he finds himself helping strangers and eventually helping himself. [You can’t wait for something to happen to you and give your existence meaning. You are the one who will make your life worthwhile.]
books  fiction  Eric_Reguly  Ian_Brown  life-changing  reading  summertime  transformational  writers 
june 2017 by jerryking
How Glencore AG became a giant in the global agriculture trade - The Globe and Mail
ERIC REGULY
ROTTERDAM, NETHERLANDS
THE GLOBE AND MAIL
LAST UPDATED: WEDNESDAY, MAY 03, 2017

Interested in acquisitions, Glencore AG has accumulated an extensive network of grain assets around the world, and has no plans of stopping
Eric_Reguly  Glencore  soybeans  CPPIB  Argentina  ADM  Bunge  Cargill  Louis_Dreyfus  oilseeds  Viterra  agriculture  growth  opportunities  Rotterdam  grains  logistics  storage  transportation  trading  agribusiness  supply_chains  Marc_Rich 
may 2017 by jerryking
Monocle editor-in-chief Tyler Brûlé is a rare believer in print - The Globe and Mail
ERIC REGULY - EUROPEAN BUREAU CHIEF
LONDON — The Globe and Mail
Published Friday, Dec. 23, 2016

Wallpaper was Mr. Brule’s first media success story, even if it was, for him, a financial dud. ...Wallpaper, focused on fashion, design, travel and art and, as does Monocle today, highlighted top-quality products and services as opposed to merely “luxury” offerings in all their potential vulgarity. The magazine was launched in 1996 – “It ran out of money right away” – and Mr. Brûlé sold it to Time Warner (now Time Inc.) a year later. In 1998, Wallpaper started Winkreative, a brand design and strategy agency that, lately, designed the brand image of Toronto’s Union Pearson Express.....Across the street are two trim shops – Trunk Labs and Trunk Clothiers – that sell horrendously expensive travel and clothing items such as the Begg Arran scarf, apparently made from the wool of caviar-fed sheep; yours for €345 (almost $500 Canadian).

On the same street is the little, ship-shape Monocle Café...The Monocle Shop is around the corner. In nearby Paddington, Monocle is experimenting with Kioskafé, a news and coffee shop that sells 300 magazine titles and thousands of print-on-demand titles, including The Globe and Mail.

Mr. Brûlé says the collective revenue for the publishing, agency and retail spreads are about $50-million. “We’re disappointingly small,” he says.
Eric_Reguly  Tyler_Brûlé  Monocle  digital_media  cosmopolitan  stylish  print_journalism  magazines  journalism  entrepreneur  branding  niches  elitism  social_media 
december 2016 by jerryking
Former Xstrata boss Mick Davis a slimmer, trimmer predator - The Globe and Mail
Mar. 13 2015 | The Globe and Mail | by ERIC REGULY - EUROPEAN BUREAU CHIEF
LONDON.

Mick Davis runs X2 Resources, which has 10 employees and zero assets other than $4-billion of investor capital, some of it from Canadian pension funds, sitting idly in the bank.

X2 was launched a year ago and has been shopping for mining assets or operating companies, but has come up short....Mr. Davis is wealthy. He recently donated £1.1-million ($1.5-million) to David Cameron’s Conservative party to support its re-election bid in the May general election. He admits he doesn’t need to launch X2 to support his lifestyle, though he would like to donate more money to his charities. What’s really driving him is the urge to build once again....Xstrata began life in 2001 as a small lump of coal assets discarded by Glencore. Big Mick had emerged as the industry’s premier predator. “What motivates me is to be able to create and build,” he said back then. “If you’re going to be productive in your time in this world, you have to add to it. I have the capability of adding commercially.”....Commodities recovered shortly after the 2008 financial crisis, then went into a long slump that continues today – copper is down more than 15 per cent in the past year, iron ore by 50 per cent. The culprit was not waning demand, Mr. Davis explains; it’s still rising, albeit at a slower pace. Instead, it was epic miscalculation by the corporate captains and the investors who threw money at them. When prices were strong, the biggies invested fortunes in new mines and smelters and all the ports, ships and railways that went with them. These projects were vast, expensive and took many years to build.

All that new production is now hitting the market like a sledgehammer.
Xstrata  Mick_Davis  mining  Glencore  Eric_Reguly  miscalculations  Second_Acts  commodities  private_equity  mergers_&_acquisitions  natural_resources  X2  entrepreneur  privately_held_companies  overcapacity  overexpansion 
march 2015 by jerryking
Former Xstrata CEO raises $2.5-billion for new company - The Globe and Mail
ERIC REGULY
- EUROPE BUSINESS CORRESPONDENT

X2’s goal is to create a mid-tier mining and metals group. The company consists of a small office in central London and five executive partners, all of whom worked with Mr. Davis at Xstrata. They include Trevor Reid, who was Xstrata’s finance director, Thras Moraitis, Andrew Latham and Ian Pearce. Mr. Pearce, of Toronto, was the CEO of Xstrata Nickel, formerly Falconbridge Ltd., the Canadian nickel miner bought by Xstrata in 2006 for about $22-billion (Canadian).

With ample funding in place, X2 is expected to move quickly on the acquisitions front. The company won’t say where it is looking, though the team has intimate knowledge of the mining scene in Australia, Canada and South Africa. Mr. Davis is a South African and was the chief financial officer of Australia’s Billiton before its merger with BHP in 2001.

X2 will consider buying operating companies or assets that are being discarded by the big players such as BHP, Rio Tinto and Anglo American, which overpaid for assets before the 2008 collapse in the belief that the upward commodities cycle was unstoppable. They have taken billions of dollars of writedowns in the past couple of years.

ROME — The Globe and Mail

Published
Monday, Mar. 31 2014,
Mick_Davis  Xstrata  Eric_Reguly  mining  natural_resources  commodities  overpaid  commodities_supercycle 
april 2014 by jerryking
Jobs: optional
March 28, 2014 |Report on Business Magazine |Eric Reguly
Facebook's purchase of WhatsApp - $19 billion for 55 people - shows how technological change and employment growth are becoming uncoupled
Eric_Reguly  Facebook  WhatsApp  digital_economy  productivity  the_Great_Decoupling  technological_change  digitalization 
march 2014 by jerryking

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