Will Danny's resource power grab pay off?


mt_pockets1000
#1
Premier seizes AbitibiBowater's hydro assets and cutting rights after company plans mill closure, a move that may sour business investment in the province


Just when you thought the Danny Chavez gibes were getting tired, the Rock's irrepressible strongman strikes - no, more like bludgeons - once again.
Danny Williams's move to unilaterally seize the Newfoundland hydro assets and timber cutting rights of paper giant AbitibiBowater Inc. after the company announced it would close its adjacent newsprint mill is the kind of self-inflicted wound that will sour any sensible business person with an eye on investing in the province. If the government rips up duly negotiated agreements just when it feels like it, what's the point in signing them in the first place?
At least Hugo Chavez, Venezuela's nationalization-happy President, has the decency to call himself a socialist. Mr. Williams just acts like one.
globeandmail.com: Will Danny's resource power grab pay off?

Oh puh-leese. Our self-appointed 'national newspaper' strikes again. This columnist obviously didn't do his homework. Abitibi operates under a 100 year old agreement where the province grants them timber rights and water rights (for free) in exchange for jobs and taxes. Abitibi choose to break that agreement thereby making the contract null and void. Williams is well within his right to take control of these natural resources. They belong to the people, not Abitibi. It's about time someone stood up to big business. Danny is leading the way.

C'mon Harper, follow his lead. Grow a pair.
 
hermanntrude
#2
I live in the town where the mill closure is happening. To me it seems better for the town that the assets are seized. At least then we can use it to prevent the town from deteriorating into a ghost town.

Apparently the trickiest subject is whether the bridge across the river will remain in place and who it will belong to. Apparently AbitibiBowater own the river bed underneath the bridge as well as the bridge itself. many of the town's inhabitants have property on the other side. if the bridge were to be removed, getting to the other side would be several hours driving instead of a few minutes.
 
mt_pockets1000
#3
I'm sure there will be ongoing negotiations between lawyers on both sides as this situation evolves. Tear the bridge down, put it on a truck and send it to Abitibi head office. Build a new one in it's place.

I toured the plant in the mid '90's. Quite a facility. We were interested in the generating station as part of our college program. At that time they were generating 60% of their own power. That's impressive.
 
hermanntrude
#4
I hear the generating station is a bit of a downer for the town. It wont result in any work for the town and the power itself will of course not benefit the town at all.
 
taxslave
#5
Quote: Originally Posted by mt_pockets1000 View Post

I'm sure there will be ongoing negotiations between lawyers on both sides as this situation evolves. Tear the bridge down, put it on a truck and send it to Abitibi head office. Build a new one in it's place.

I toured the plant in the mid '90's. Quite a facility. We were interested in the generating station as part of our college program. At that time they were generating 60% of their own power. That's impressive.

Most pulp mills generate their own power. On the west coast we would never have had any pulp mills if they did not.
I'm glad to see some government leaders have the balls to stand up for their citizens. I hope premier Williams makes sure that all the local suppliers get paid before the banks. Here when the local Harmac mill that was owned by Pope & Talbot of Oregon went down local suppliers got royally screwed in favor of the big US lenders. The company I work for was making chips for the mill when it went into receivership. The receiver,PriceWaterhouseCoopers agreed to pre pay us every week. That worked for a while until the last three weeks when the cheques stopped coming and excuses started. All the management , including the receiver guaranteed we would get paidso kept operating.WE were all under the impression that the receiver was not to run up any new debts. NOT SO. End result a loss of 80000 dollars that went to secured creditors. A big hit for a company with 4 employees grossing a little over 1 mil. a year. Not sure how many other suppliers got screwed but there are lots of them.
 
mt_pockets1000
#6
Quote: Originally Posted by hermanntrude View Post

I hear the generating station is a bit of a downer for the town. It wont result in any work for the town and the power itself will of course not benefit the town at all.

I guess the big issue here is Star Lake where they generate 15 MW of power. I believe that lies somewhere near Millertown in a remote area, a good distance from Grand Falls. I would say the people already working there will maintain their jobs. I would expect this generating station to become part of the provinces new energy corporation, NALCOR.
 
hermanntrude
#7
the facilities at star lake apparently employ 2 people. That's just hearsay but from a trusted friend
 
mt_pockets1000
#8
Quote: Originally Posted by taxslave View Post

Most pulp mills generate their own power. On the west coast we would never have had any pulp mills if they did not.
I'm glad to see some government leaders have the balls to stand up for their citizens. I hope premier Williams makes sure that all the local suppliers get paid before the banks. Here when the local Harmac mill that was owned by Pope & Talbot of Oregon went down local suppliers got royally screwed in favor of the big US lenders. The company I work for was making chips for the mill when it went into receivership. The receiver,PriceWaterhouseCoopers agreed to pre pay us every week. That worked for a while until the last three weeks when the cheques stopped coming and excuses started. All the management , including the receiver guaranteed we would get paidso kept operating.WE were all under the impression that the receiver was not to run up any new debts. NOT SO. End result a loss of 80000 dollars that went to secured creditors. A big hit for a company with 4 employees grossing a little over 1 mil. a year. Not sure how many other suppliers got screwed but there are lots of them.

Doncha love how these large companies act with such disregard for their workers when times are tough? I'm sure he will hold Abitibi's feet to the fire and not allow them to stiff anybody. The man should be wearing a cape...

Williams realized Abitibi was ready to drag this process along for a few years. He knew they would continue to use the timber and water for profit during these long, drawn out negotiations. So he took action.

"For a hundred years, Abitibi and its predecessors enjoyed the privilege of Newfoundland and Labrador's natural resources," Williams said. "It simply makes sense if Abitibi are not going to continue the operation of the pulp and paper mill and renege on their commitment to our province, they will no longer have access to our natural resources.
"There are numerous charters and licensing agreements which allow Abitibi to operate in this province, and those relevant to the natural resources of Newfoundland and Labrador will be repatriated to the province."


Book em Dano...
 
hermanntrude
#9
I figure danny's been expecting this for some time. his quick reaction seems to confirm that
 
mt_pockets1000
#10
Another point I wish to make on this issue is to bring to light (as if we Newfoundlanders don't already know) the pure hate the Globe and Mail has for Newfoundland and Labrador and Danny Williams in particular. They continue to liken Williams to Hugo Chavez....ha. I guess he could be compared to worse. If Chavez sticks up for his people and don't take any crap from outside influences then the comparison is probably valid. There are some out there who absolutely despise Williams, but they are few and far between. Most comments I see are positive and people wish their premiers and our prime minister had half the backbone.
 
Just the Facts
#11
Williams for PM!!
 
mit
#12
Companies will go where they can make money - If political stability was the deciding factor in where to locate a business their would be no oil fields - mines or plantations outside the developed world. The Amazon Rain Forest would be pristine still.
On a Canadian note - In Ontario anyways when a business shuts down it's propert tax bill goes down also. These leaves the survivors to pay more. I think if a business closes down their property tax should remain the same - Of course that will mean lower property taxes overall and the price of commercial/industrial real estate would fall, creating opportunities for businesses to aquire a cheap lease or building. And because all the vacant real estate will now become more expensive to hold - speculators will avoid it like the mumps and owners will have to come up with new ideas for their buildings like reasonable priced housing. Derilict buildings would be torn down to lower taxes. So we would end up with an affordable business climate that was not in need of municipal subsidies - fewer empty buildings - more housing - more jobs and more money in peoples pockets

It would never work - if it would McGuinty or Flaherty would have already thought about it!
 
TenPenny
#13
I think everyone's been expecting this for a year, we certainly were at my place of work. When Abitibi closed Stephenville, there was talk that they wanted to close Grand Falls, and use the power generated there to feed Stephenville, but NLHydro wouldn't let them transmit the power, they'd have to sell it to NLHydro, then pay market rates at Stephenville. That made it slightly more economical to keep GF open.

But earlier this year, Grand Falls cancelled a bunch of stuff on order, and once the union voted against the new contract, that was that. How could that come as a surprise to anybody?

So out of 4 mills in Atlantic Canada, Bowater now has only one. And we'll see how that one fares.
 
hermanntrude
#14
i dont think it surprised anyone. The surprises will be what happens afterwards... no-one's quite sure what will happen in grand falls, but i'll be able to give you guys the insider's point of view
 
mt_pockets1000
#15
No surprise here about the shutdown either. What raised my eyebrow was Williams aggressive approach to expropriate the assets. He's staring down the critics in typical Danny style.

I was curious how 2 employees could maintain and run a site like Star Lake. Have you seen the size of this place? I guess most of the place is fully automated.

Last edited by mt_pockets1000; Dec 18th, 2008 at 01:30 AM..Reason: missing word
 
hermanntrude
#16
some hydro plants have no permanant employees at all
 
mt_pockets1000
#17
For sure Herman. There's a small plant just outside St. John's as you leave town with a couple of Rolls Royce jet engines housed there that kick in during emergencies. That plant is unmanned. Crews show up occasionally to do routine maintenance but otherwise the place runs itself. But I digress....

I see where CBC is running a few scare tactic interviews and reports that try to shine a negative light on Williams dealings with Abitibi. Freakin' media and their negative spin.
 
hermanntrude
#18
yeah not sure why CBC want to make it look like that. perhaps Danny is public enemy number one in the newest have-not province? Jealousy does nasty things to people
 
mt_pockets1000
#19
Hmm, public enemy #1...ya think? CBC's spin falls in line with the naysayers. Perhaps the CBC is afraid Newfoundland will set a precedence in going up against big business, something that should have been done long ago. By all accounts the CBC could use a magnifying glass pointed in it's direction. And you can throw the Globe and Mail in there as well for their biased slant on the news and their incessant attacks on Newfoundland and Labrador. Public enemy #1: the media.
 

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