Saturday, October 14, 2006

 

Hogwash

On Thursday, Maple Leaf Foods announced a major restructuring that had been in the works for months (often rumoured due to the dislike for the Saskatoon union work place - more later). Maple Leaf Foods cancelled plans to build a new $110-million pork processing plant in Saskatoon and will wind down operations at an existing plant over the next three years.

This is news for three reasons. One, it will have short-term and long-term implications for the Saskatoon economy. Obviously, a new plant would have created jobs, retained or recruited skilled labour and added more individuals to the tax roll. Without it, local residents will look elsewhere and many will cast their eyes west.

The second reason is, like most governments, the Government of Saskatchewan made a series of concessions over the years to encourage Maple Leaf Foods (Mitchell’s)to stay and operate (maybe expand) their operations. The concessions may have paid off short-term, but long-term they can be debated. It is the classic case of subsidize one large business or foster a climate that allows many to prosper.

The last reason is that it exposes an obvious division in the labour movement. So much for solidarity. How so you ask? Well, follow this thread.

Maple Leaf Food purchases the Mitchell operations (including the soon to close plant) and very shortly the unionized employees fear for their job security. Maple Leaf Foods (operated and controlled by the McCain family) are, not to put too fine a point on it, anti-union. The family is well known for the monumental struggles to ban any activity on their property. Not allowing union representatives on their property for fear they would share the working conditions with their "brothers and sisters."

This is often part of the business cycle. Companies and unions clash. Unions try to flex their muscle. Companies, fearing what a unionized workforce may mean, flex back.
The McCain's are no different than many, however, they are bigger and often more vocal of their disdain for organized labour.

The curve, however, is this. One of the largest shareholders in Maple Leaf Foods is a labour union. The Ontario Teachers' Pension Plan (one of the country's largest investors) holds a great deal of sway inside a largely anti-union company. So it would stand to reason, if solidarity was alive and well, than the OTPP would be concerned about "supposed" anti-union bent and the closing of shop in Saskatoon.

Well, not exactly. According to the OTPP, the move receives their blessing. Brian Gibson, senior vice president of public equities at Ontario Teachers' Pension Plan, Maple Leaf's largest shareholder says:

“We are very supportive of the strategy and highly confident of management's ability to execute this reorganization and to improve profitability."

Translation. Solidarity, when convenient. Business before Brothers and Sisters.

Comments:
Shaky,

These peaches are getting very moldy indeed. We want some fresh stuff on here soon.
 
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