Monday, December 22, 2008

The new Cadillac "Barack" or the Ford Harper...a nerdy looking gas guzzler?

So...I have to comment - I've been rather silent, on the bailout of the North American Auto industry.

First, I need to place a number of qualifiers on what I am about to write.

Let me start by saying that I'm clearly confused about what it means to pro-rogue the House of Commons. Apparently, the Prime Minister can make whatever spending decisions he wants now without any agreement from the people elected to Parliament. This weekend the Tory government-in-hiding announced that it would match 20 percent of the amount given to the US parent companies of Chrysler and General Motors. Ford apparently doesn't need the money as badly.

Secondly, I definitely agree that something needed to be done given the importance of the industry to the North American economy. However I also think we need to build a bridge between slow auto sales caused by the current credit crunch and the mobility market of the future while trying to create new jobs in a new economy. Unfortunately we appear to be squandering what might be huge opportunities to turn crises into catalysts of change.

I am actually a bit baffled and mildly amused by the irony of the 'bail-out'. Chrysler is owned by a Private Equity firm Serberus (sp?) They have been unwilling to pump their own money into their own investment. I become very worried when politicians are making investments that the company's owners won't make! As I wrote in a previous blog about my hopes of a Belinda Stronach Liberal leadership campaign, I believe that the right thing to do is to ensure that GM and Ford survive while forcing Chrysler to be split up.

I'm not talking about the money either. Tony Clement was on CBC this morning talking about the need to reduce wages while also boasting of the Canadian auto assembler and parts maker's efficiency as the most productive in North America. Part of productivity of course is quality where Clement was critical of the Big 3s record. Unfortunately, these are not your father's Fords or GMs. North American manufacturers are now winning initial quality awards from JD Power and are building top-selling vehicles. They're even responding to market demand for fuel efficiency even if they are a bit late to join the party.

Here is my main concern. Our Highways, public transit systems, sidewalks and borders are crumbling due to mismanagement by public authorities and dis-investment in assets. Now government is going to loan money to an industry that constantly fights regulation while ensuring that money is loaned with regulation and oversight. Hmmm. Am I the only one wondering why the Tories, who supposedly believe in the free market now believe in market intervention.

At any rate, it is interesting to say the least that we seem to efficiently produce automobiles and the 'best parts in the world' while also having a bloated market in terms of wages. I don't think that auto workers should necessarily be paid as well as they are but I also don't agree with the roll-back of collectively bargained agreements. As partners in the industry the unions have a vested interest in ensuring that the North American industry survives. A rational individual must conclude that they will act in the long-term best interests of their members.

I am curious to see what happens in the coming weeks. Aside from being directly involved in the intersection of transportation and politics, pardon the pun, we are perhaps in the most precarious economic times since industrialization. There are so many questions to be answered.

Will extending new credit on top of bad credit make things better? Can government do the heavy work of both over-seeing the operation of private companies while ensuring the health of their own bank accounts? Can government invest in the private sector while not crowding-out private investment? Can government create new green jobs in a new green economy while propping-up the old order?

The US economy is already in the deep red, over-exposed to foreign debt and most likely still boasting of an over-capacity of low-to-mid wage and skilled labour. Right now we have an opportunity to create jobs building public transit systems. There are thousands of cars sitting on the docks in Long Beach California depreciating by the minute. How will putting money into the Big 2/3 change the fact that people on Main Street USA have over-extended their credit already and are losing jobs and real wages?

Infrastructure jobs take time to create. One doesn't just approve and build a nuclear power plant in a week. That takes at least 5 years. In fact, it would take at minimum 6 months for any infrastructure money to hit the ground so to speak and that money would likely go to backlogs and 'easy' repairs which most likely would create few new jobs.

We could get to work creating new jobs to address long-standing problems. For instance if we we know that there is a shortage of solar-panels, education/training programs could be started to fill the new jobs are created by investments made - yes, to the reward of those who have taken risk previously - and we could collectively start down the path to a post-carbon economy. I think President-elect Obama gets this. It remains to be seen what, if anything, Harper (or Ignatieff) will do with the opportunity of crisis.

At any rate, these are very interesting times. How we figure our way out of the systemic challenges that we have is beyond me. I do think it's misguided to hope that our politicians will do a better job running companies than they will running government but I love the irony that this is where we're heading! In accordance with the title of this blog, I really can't wait to see the new cars designed by the Progressive Conseratives. There's no way the Harper will be as cool as the Barack!

Friday, December 5, 2008

Notes from the Crisis

Well, Canadians will surely remember the last week for some time to come. If our 'Constitutional Crisis' does not inspire Canadians to think long and hard about the kind of electoral and governing system that we currently have and the kind that we desire and need, then our ability as a nation to survive the new global economy must certainly be questioned as well.

Peter Van Loan is on TV right now blabbing about their clear mandate. What a maroon! Then he keeps going back to the Liberal Party and their issues while Suhanna Marchant continues to ask her questions. Blabbermouth. I can't believe that a majority of Canadians want these bozos over a coalition of parties representing, well, a majority of Canadians. The polling that has been conducted must be flawed.

The Conservatives have injured unity in the country with their attacks on the Bloc. The Bloc is a Provincial-rights party as much if not more than they are a separatist party (hypocritically called a sovereigntist party in Quebec.)

The Conservatives are arrogant. They received a third of all votes cast. They did not win a majority of votes or seats. We don't vote for a President but if Canadians want to, then we should consider changing our system though I've already blogged about it.

PREDICTIONS!

Okay...I often believe that I called things even if they are rumours I've heard already so I'm going to start putting things in writing about what will happen in the future!

The US Congress will get Harper! Belinda Stronach will come back to lead the Liberal Party of Canada!

Here's my sneaking prediction! This one is admittedly a long-shot but those are often the wise shots - especially when you're down 3 points in the championship, as the Liberals are right now.

So, what am I talking about? Here goes....The US Congress will provide a bailout for 2 of the Big 3. Ford and GM will be helped while Chrysler will be either left to its own devices or taken over by the federal government in order to manage its break-up and sale, perhaps to the other two, though don't overlook some foreign maker like Indian company Tata Motors.

At any rate, Chrysler's failure or sale over the next few months, heck the lack of a bailout package for them undoubtedly would cause its near immediate, shall we say, adjustment? This will cause at best temporary plant closures and a reduction of up to 1/3rd of the auto sector in North America, I would guess. The ripple through the economy will be huge.

If that happens, or Congress does nothing, or Congress waits for Obama, or Bush bails out 2 of 3 the Automakers, then there will be a huge pile of complaint letters waiting for Steve when he gets back to his job after his 6 week sojourn. The irony of the coalition is that they wanted to act now but due to Harper's ego and the apparent ignorance of many Canadians, their action has inadvertently created a vacuum of economic leadership in our country. But I blame Harper, not the majority of members of the House of Commons.

IF this happens as I predict and jobs are lost in the auto manufacturing and parts supply industries, then Ontario's vote-rich 905 region will have boiling blood to welcome Tory MPs out trying to garner public opinion. If nothing else, Harper has gambled these people's future as much as he has his own in a high-stakes game of political maneuvering. They will ring the collective necks of conservatives if there is any significant downturn in the economic sector in the next 6 weeks which brings me to my next big point...

I read in the Globe and Mail this morning that many Liberals are chatting about the possibility of someone running for the leadership who is very strong on economic issues and is pro-business and that no one has really been talking about. The Liberal commenting went on to refer to 'her' considerations for running and to 'her' in several other instances. Who could that possibly be?

Here it is - the Liberals absolutely need to take back the 905. Hilary Clinton and Sarah Palin's emergence in the US have recently generated huge support for women in politics in North America, Hockey Moms and centrist candidates. The rivalry between Rae and Ignatieff threatens to ruin the party at a time when it needs solidarity - in a classic Liberal way I am torn one day to the next. I lean to Rae's politics and beliefs while thinking Iggy is the better candidate for a centre-right Canadian electorate, particularly in the West.

Belinda came to the Liberals during the brief Paul Martin era. Stronach has run a national leadership campaign before. Many tories, particularly democracy and institution-respecting conservatives are upset with Harper and the conservatives and the lack of an action plan. Stronach would be incredibly popular in the 905 and in the West.

I truly believe that this will happen. Our second female Prime Minister and leader of the next Canadian coalition government will be Belinda Stronach. You heard it here first!

Thursday, December 4, 2008

a draft OP-Ed re Technology Incubation and the Clean Tech Sector

Green Sector Needs more than Encouraging Words from Government

Economic Development officials the world-over are heavily in pursuit of the next ‘bio-tech’ sector to create new employment opportunities in their Cities. The 2008 version of bio-tech is the ‘Green’ or ‘Clean Tech’ Sector. Toronto Mayor David Miller has talked openly of his goal to brand Toronto as an ideal location for such businesses to locate.

Warning to Businesses! We talk a great game but when the rubber hits the road, expect little support beyond rhetoric and encouraging words.

How so?

First, let me state that Canadian governments have done an excellent job to lay the groundwork for technology innovation. While we can always do better, our Universities are creating dynamic, intelligent and innovative graduates in sciences, math and computer science. In Toronto, one has to look only as far as the MaRS building at College and University (its building program co-funded by all 3 levels of government and private contributions) to see that excellent facilities do exist to incubate and commercialize clean and green technologies.

So in that regard, we are well positioned for the creation of a clean tech sector. However, if incubation spaces exist only to help companies to get to a pre-revenue, pre-commercialization stage, then much of the money we invest in facilities such as MaRS will have been wasted. Not only are those public dollars wasted but further millions of dollars of private investment threaten to fail to generate returns to ‘Angel Investors’ and further reduce the effectiveness of government strategies to grow this sector. If Angel Investors and then Venture Capital begins to look elsewhere, the ‘Clean Tech’ strategy will be doomed.

So while our governments have created these great frameworks, bureaucrats are still left scratching their heads wondering how to position their jurisdiction as a leader in ‘Clean Tech’ development. So what is the problem? Why, with all the investment in education and innovation are we failing to create and attract companies with innovative technologies through incubation to implementation and commercialization? Policy alone cannot stimulate economic growth.

A colleague of mine from a small yet innovative MaRS-based company I work with recently attended a session hosted by Toronto’s Economic Development department. City officials were asking the important questions about how to help grow this sector. Responses from the private sector attendees were fairly succinct and based upon a few mutually shared experiences: “Working with the government is like banging your head against a wall.”

Similarly, I attended an Intelligent Transportation Systems Conference in Montreal where Transport Canada officials asked: “How can we help create new technology to solve our transportation problems.” My answer to the room was that the problem was not in innovation but in implementation. There are lots of great ideas but without public policy ‘labs’ to test technologies and demonstrate their potential, Canadian companies are often forced to shop the world for clients to be first-users and early adopters. In those instances, Canadian companies face protectionism and local advantage that we don’t enjoy at home.

Here is the problem as I see it. Politicians want a clean-air machine. They have, I believe, largely convinced themselves that if they just set up technology incubators and create the conditions for innovation, a magical climate-change reversing ‘pill’ will be invented that we can all take, go to sleep and wake up a week later to ask Dr. Gore if its all better. Unfortunately, such a solution may never come along and I’m a big believer in using the solutions that are at your disposal, even if they are new and untested.

The fact of the matter is, human behaviour and the systems that we have built to support our lifestyles are largely unsustainable and require significant change if we are to tackle carbon challenges such as climate change, smog and resource depletion. That means we all need to change. That we all need to change requires that government mandate those changes – volunteerism only goes so far when it involves economics.

Furthermore, great innovations come in leaps and bounds – not in baby steps or from tinkering around the edges. I’ll paraphrase two of Albert Einstein’s famous quotes that come to mind: “We cannot solve the problems of today with the same thinking that created them” and “if an idea is not absurd at the beginning it is unlikely to succeed.” I also think Steve Jobs makes a great point when he says “People don’t know what they want until you give it to them.”

So what is my point and how does this all weave itself together? Let me get back to that MaRS-based company that I work with. Toronto Star readers may recall Judy Steed’s fine work in 2007 for her ongoing ‘Business Challenge’ reports. Judy profiled Skymeter, whose innovative approach to GPS signal processing has enabled them to create a market-busting approach to road tolling. Forget traditional road tolls – Skymeter’s beauty is the ability to privately and even anonymously charge for roads when and where they are used. To simplify – it’s a smart meter that would collect Gas Taxes or Road Taxes in a similar fashion to how a Water meter determines your bill – based on actual use. Plus it’s also a parking meter that removes all the hassle of finding and paying for a parking space.

Skymeter is just one example. There are numerous other companies with fantastic new technologies, many of them developed in conjunction with our Universities and Centres of Excellence. Skymeter is receiving fantastic attention in Cities and countries where governments are seeking to marry innovation to public policy to tackle our toughest problems. For instance, the government of The Netherlands is very keen on Skymeter as a potential tool to implement a nation-wide Distance-based taxation system for vehicles and roads. However, all government buyers ask the same question: “Where is this being used?”

What then is the missing link between Innovation, incubation and the wonderland of commercialization and success? The most important ‘I’ word here is Implementation. Had Apple required government for the iPod to succeed, we’d still be having blue-ribbon panels to discuss the idea. Governments must find the courage to test, pilot, demonstrate and otherwise support the export development of technologies made in Canada. Until we do, we will create more Alexandar Graham Bells – people who have to go away to succeed only to have that success nationalized once they return. The 2.0 version of Bell’s work is RIM and Blackberry.

I am not for one minute suggesting that Premier McGuinty implement provincial road tolls or that David Miller stand-up where Metrolinx has failed to and force the issue of fair taxation of motorists. However, I am suggesting that governments need to identify ‘test beds’ and put money forward for pilots and demonstrations. For instance, how would charging Courier vehicles for every stop in the downtown core affect the issue of illegal stopping? The City has a problem and Skymeter has a possible solution where all others have failed. This is a win-win-win-win. Traffic solution for the City, pilot for a local company, exposure of innovative clean tech sector, rewards to private investors. What am I missing?

Until Government realizes that it must step up to the plate and that politicians must take some portion of the risk that private investors and entrepreneurs are taking to develop these solutions then they will be doing little more than printing documents with great stated-goals that are never ever met. Ultimately that will lead not only to the failure of our economy but to our failure as a society to deal with our most pressing problems.

If, as Mayor Miller has stated, Climate change is [his] generation’s greatest challenge, than doesn’t that require the boldest steps?

Wednesday, December 3, 2008

Ohhhhh Canada....or is it Cana-duh?

Good friends you'll know now of my disgust with some Canadians for their furor over the 'Crisis' in Ottawa. The worst part of this whole thing is that the boarish, bizarre reaction of Canadians has drowned-out what could have been a huge galvanizing point in Canadian History that created the conditions for the solution of so many of the problems we face! It is toothless selfishness that reacts angrily to a coalition of elected officials representing over 60 percent of voters acts to take over from a government to avoid a costly election while investing in our economy.

I'm so tired of the Conservative's negative view of government. They seek not to solve problems but to disarm government of the ability to solve them, then complain that government doesn't work. It's cynical. It's old. Why can't we marry the good ideas of conservatism, particularly the fiscal approach, with those of the left, like using economic tools to curb carbon emissons. Huh? We have?

I have been thinking a lot about what the overall message is of what has happened in Ottawa and how the public has reacted in general. Canadians have fallen into two camps of course but they're odd in their composition because some partisan types are caught up in their own brands. Lefties generally support what is going on with the coalition and will believe that Harper's prorogue (hate that word) is simply stalling to avoid defeat and ultiamately it is the weakest economic package he could possibly propose - who's interest is Steve serving? If the Liberals don't use that in the next election it will prove that they haven't fired the idiots currently handling their communications.

If you don't support what is happening, even if you accept that it is constitutional, and if you're rational you must accept its constitutional since we do have rule of law in Canada and the coalition could not be doing what it is doing or proposing if it werent' constitutional, then you must conclude that our system of government is broken. If you are rational. If you are rational but are angered that the party in government could be overthrown by a majority of members of the House of Commons without an election but using instead the current composition of members and consensus to present a viable alternative to the Governor General then you must come to the conclusion that our government is broken.

Either way, you must conclude that our government is broken. Our system of government does not result in governments that reflect the desires of the majority of Canadians. I say we either go Presidential with a two-party system and a system of primaries for the selection of local candidates with candidates representing either generally right-wing and generally left-wing and running in local ridings with a multitude of candidates able to run for President. The Prime Minister would run the legislature and would be the leader of the party with the most seats. Add a reformed senate for good measure and you have Canada's own Republican form of government.

Or if you are not so enamored with that but think that everyone's views should be counted so that we have clear winners and losers but so that a range of views are allowed to be at the table then you must both support subsidies to parties for the amount of votes they get and you must ultimately support Proportional Representation as our form of government. Throw in a reformed senate for good measure and you have a Euro-Canadian form of government. Oh - and you could have either a run-alone Presidential Candidate or you could have the leader of the party with the highest vote share. These systems often allow people to rank the candidates or at least to vote for and against certain candidates.

So if Harper does stay in after the New Year (presumably we'll have a hiatus achieving no economic stimulus) I think the Governor General should commit him solely to the pursuit of electoral reform. Otherwise he should get out of the way gracefully and realize that Canada has once again set history with the most peaceful coup d'etat in the history of the world!