Something stinks

The media is reporting today:

A Nova Scotia town with over 100 years of steelmaking history met the cold-blooded reality of modern business Wednesday with the announced closure of its railcar plant and loss of 330 jobs.

U.S.-based parent, the Greenbrier Companies, said it would shut down its TrentonWorks plant in Trenton, N.S., later this year and shift operations to Mexico and to its primary facility in Portland, Ore.

“The very strong secular outlook for the Canadian dollar, uncompetitive labour and benefit costs coupled with geography and other factors really meant that we didn’t have a choice,” Bill Furman, the company’s president and CEO, said during a conference call.

I’ll make a couple of points. Maybe three or more.

1. The company lumps in uncompetitive ‘benefit costs’ into the reasoning for closure. If Greenbrier offers any health care benefits at all in Portland, there is no way benefits costs are higher in Nova Scotia.

2. This company, I believe, is just badly managed. There are companies in Canada making all kinds of transportation equipment and doing it competitively.

3. If this was a Quebec-based aerospace firm, I wonder if they would have received $100 million TPC contribution? Hmmm….

Seriously, though, I think the economic developers down there should get past Greenbrier. They should do a study to see if in fact a well run operation could work down there. And if so, I’d put up a for sale sign and pay a high priced sales guy/gal to contact everyone one of Greenbrier’s competitors (ACF, Bombardier,
CIT Group, CAF, Duchossois Industries Excel Railcar Corporation, FreightCar America,
GATX, Interpool, Pioneer Railcorp, Trinity Industries, TTX, Union Tank Car and Wabash National) and tell them we’ve got a ready workforce and a rail car manufacturing facility ready to go.

I keep saying this. Companies with bad business models and bad management should not be propped up or supported artificially in Atlantic Canada. But if there are great companies with good business plans, come on down.

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