Thursday, May 3, 2012

O JESUS! THE TRUTH IS IN THE CLOSURES

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 "The agreements that we have reached provide
 for fair and equitable treatment of FPI shareholders,
 and more importantly, for the first time in a very
 long time, we are able to provide security for the 
workers of FPI," 

Premier Danny Williams 
May 08, 2007

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It was talked about, but not taken that seriously. I just heard the news on my way home for lunch.

Today, the Town of Burin learned that it's major employer, High Liner Foods is closing it's secondary processing facility throwing 200 people out of work. The company also announced that it will be closing its Danvers, Massachusetts facility in 2013.

 Both facilities were picked-up when the P.C Government, with he support of the provincial New Democrats, passed legislation in the House of Assembly allowing the sale and breakup of FPI Ltd., one of Canada's largest seafood processors, to rivals Ocean Choice International and High Liner Foods Inc.

 Earlier this year the company warned that the plant could be in jeopardy because of it's location and the cost of production. The company has acquired a newer processing facility in Virginia. The Burin operation will close in December.

30 years ago, than deputy mayor, current Premier Premeir Kathy Dunderdale, dug a trench across the gate of the fish plant in Burin to prevent the company from removing equipment. Her actions resulted in the fishing assets remaining, leading to significant investments in value added production. 30 years later the plant in Burin continued to employ a couple hundred people, until now.

Had she taken her government's "free market conditions must be respected" 2011 approach the plant would have been torn down. 

High Liner, based in Lunenburg, N.S., purchased the secondary processing facility in Burin, as well as FPI's United States-based marketing arm. High Liner have committed to maintaining current employment levels at the facilities for at least five years.

How fast time flies?

This will be the third major former FPI processing facility to be shuttered since the province gave it's blessing to the deal. The OCI Plant in Fortune may be the fourth.

 It took the Nova Scotian's 61 years to steal our fishery.

Anyone else feel hoodwinked!




10 comments:

Anonymous said...

http://www.cbc.ca/news/canada/newfoundland-labrador/story/2012/05/03/nl-burin-plant-closure-503.html

Wm. Murphy said...

So are you saying..........If the plants remained FPI; there would be no closures?
Is the change in Legislation a result in plants shuttering?

Anonymous said...

Here is a great opportunity for a Co-op of knowledgeable industry participants. Purchase it, operate it.

Peter L. Whittle said...

Murphy:

What I am saying is that the jewel in the crown for FPI was it's secondary marketing network and assets. That was Danverse and Burin. That was the money maker that subsidized the not-as profitable and non-profitable operations. FPI, at least when Vic Young was there, looked at the operation a whole. That social approach ensured a future for these plants. When they were cannibalized that changed.

High Liner wanted to get rid of a competitor and pick up the marketing arm. They did need or want Burin. The agreement called for a five year commitment, hence the news today. Burin certainly would not be closing if the FPI was still whole.

Marystown, Harbor Breton would be processing fish. I think Port Union would be as well.

I opposed the 2007 arrangements because it was pretty clear what would happen. FPI operated on the knowledge that it was created by the public (even after it was private) to serve a socio-economic need. It thrived because profits from one line of business could back fill another. The bottom line was not big profits each year at the expense of these towns, it was profitability and the survival of communities.

There would and needs to be rationalization, I think FPI was big enough and well rounded enough that its plants would have survived and been the corner stone of the fishery.

Instead we have disaster capitalism.

Anonymous said...

The plants are closing because these communities were sold out!

Anonymous said...

Romanticize all you want. This was the change FPI warned us all about five and ten years ago. Shame on them for telling us the truth, apparently. They were rewarded with a Fisheries Minister (noted stunned arse, Tom Rideout) siding with the FFAW/Open Line ignoramae and dictating the terms of FPI's destruction. With the full support at the time of Jack-off Harris and also your beloved Liberal dullards under the immaculately coiffed Gerry Reid. Have Port Union and Marystown (and maybe Fortune next?) fared better with OCI? Was Burin better off with Highliner? Social fishery dogma is the new-age Newfie joke. Please examine the facts -- and continue to do so during the announcements of plant closures yet to come -- and admit that the industry and the world have left our sad old fisheries model in the dust. Few towns have had fish plants that were anything other than 14-week EI stamp factories for at least a generation. Bemoan their loss if you will, but understand that no amount of VOCM vitriol changes what is real. We (and ALL of our well-heeled politicians and Big Labour Elite) have failed us by pretending that blockades, picket lines, ditch digging, egg-throwing, toque wearing, pulpit pounding, ranting and roaring will restore economic viability to the outport inshore fishery. It's over. That's unfortunate. Time to get a real job.

Peter L. Whittle said...

You make some really good points, and I do not disagree at all with the reality of the world markets and the changes, particularly the Chinese influence on labor costs.

However it is not a romantic notion to state that the FPI prior to the Risley/Crosbie takeover was not working on the disaster capitalism model.

You would agree that under that model, romantic or not, the company was prepared to use its very profitable marketing and distribution arm to underwrite loses on the processing side here.

From my perspective, and this is not romanticism, the governments facilitation of the break-up of FPI and it's sale to it's competitors ensured this outcome. High liner wanted the brand and the marketing. In the meantime they made a competitor disappear. To their, credit, because of the profitability of the operations they purchased, they honored the commitments they made in 2007..five years of work for Burin.

OCI wanted quota. They are working on a business model and can not afford to be a provider of social welfare. The model does not work. They sold off the FPI HQ building for a cool huge profit and were prepared to operate plants until it made no economic sense to their bottom line to continue.

So you are right, no argument from me. You can't live off the dead unless you are working with a model that can make the operation whole. The disaster capitalism model facilitates profits and efficiencies that make the corporations the returns they want - not need.

The break-up of FPI, the take over of it's board, the change in business model created this situation.

Wm. Murphy said...

because profits from one line of business could back fill another.

I wonder what "back filling" Daly and Quinland are using when they discuss the next round of closures? The mere notion is prepostostorous.

I do not agree with government employing a social approach. Not quite sure what finacial world you live in put the shareholders of FPI or High Liner or Ford or IBM are not into social experiments. They are in it to make money. In the case of Highliner they decided to close the least profitable and move to a more updated Plant. Good economics for the Shareholder if they can get it.

We live in a free market system and capitilism is here to stay....warts and all. This is what the MOU was all about and this news should not come as a surprise to anyone.

Peter a few more Plants along the North East coast will close in the near future and they had nothing to do with FPI or the change in Legislation. Why are these Plants closing? The simple answer is that they are losing money and that the players couldn't get their shit together concerning the MOU.
To think that no Plants would close under an FPI's watch is laughable and for people to think that this would have "saved" the industry is as silly as someone advocating a "social approach" as the answer to the problem

Peter L. Whittle said...

Again, I agree. Markets and costs are driving the rationalization. Many of these plants are going to close. That is a completely different issue than FPI.

That is my point, FPI was a different type of company. It was set up from the ashes of a major collapse in the 1980's with public backing. I guess that is why Vic Young was adamant that the profits in the marketing and secondary production division offset the loses in the bad years at the plants here. In the end everyone one.

Without that marketing jewel, the FPI plants were in trouble. Each plant for itself, much like the Abitibi model for paper mills.

These companies can not afford to be propping up unprofitable operations. Markets dictate their very survival. Bankrupt fish companies can not exist for long.

Peter L. Whittle said...

anon 108

You are confused.

At no time did the Liberal Party support the demise of FPI. The leader, nor the caucus voted with Tom Rideout and the PC's to pass the legislation which enabled the company to be cannibalized.

The position was clear, the liberals were opposed to the sale and even more opposed to the division of assets.

What FPI (the renagade board) preached ten years ago is what the government allowed to happen.

I get to no comfort out of the fact that the Liberals were right about what the division meant.

The renagade board, Risely and company wanted to get rid of a competitor and purchase the lucrative brands and marketing arms. They could care less about newfoundland plants of communities, why would they. The primary reason for their existence is making money.

But at least get your facts right with regards to who said what and when.