STORM CLOUDS GATHERING FORCE

The second-largest bank in the United States, Citigroup, will cut 52,000 jobs before Christmas and over a million jobs are on the line in America's collapsing auto industry. So far Canada has lost 5,000 vehicle-assembly jobs and 10,000 parts-supply jobs, mostly in Ontario.

While Canada's growth engine continues to sputter, the worldwide credit crunch and economic downturn is having impacts here at home. Fort McMoney has slowed down. I have spoken to at least a dozen friends who have been laid off or are facing layoffs. They are heading home to an uncertain future.

Scully Mines in Wabush is facing the toughest time in its history. The operators says the mine is old and needs significant infrastructure investments, the workforce is inefficient and energy costs are high (hey what about Churchill Falls power). The company warned employees that layoffs are coming.

An Antimony mine in central Newfoundland that was reactivated this spring after being closed for ten years is now laying off workers hoping that the demand for fire retardant will rebound soon. Just weeks ago they were planning a major upgrade!

Despite an optimistic outlook from IOC about their planned expansion in Labrador West just last week, the storm clouds are gathering around that project as well. Shrinking markets are not conducive to expansion.

And another bad omen for a government that prides itself on attempting to diversify the economy, the jewel of the local IT industry has closed its doors. Consilient Technologies, a global provider of mobility software with offices in San Francisco and Asia was no longer in a position to pay the rent or its employees. The company owes millions of dollars to the Provincial and Federal governments. The company put the province on the IT map and its failure means the loss of highly skilled jobs in that sector for this province. This is a serious blow. The company is expected to provide an update tomorrow.

And did I mention Oil prices continue to fall on news that Japan is in recession. The price of a barrel of light, sweet crude on the New York Mercantile Exchange has fallen 60 percent since hitting a record high of $147.27 on July 11th.

A little bump in oil prices today to push them up over $58 a barrel with the prediction of a cold weather in the United States and the brazen hi-jacking of a Saudi supertanker laden with $100 million worth of oil (two million barrels) by Somali pirates.

We are just entering this economic downturn and already events are resembling a mad max movie in a post-apocalyptic world. Unfortunately Newfoundland and Labrador is not out of harms way!