Canadian Business Thread

[The Gibbroni]

[QUOTE=MolsonExport;5750925]

I know eh? I have been holding on to this Dog stock for more than a decade, seeing drop from $12/share to the cellar it currently occupies. Yet the company is profitable, has a relatively rosy future....

Farnborough is coming up and the C-Series is on schedule. Look for more good news in the coming weeks.

Meanwhile, the Transportation division keeps scoring:

Bombardier's San Francisco order increased


Bombardier Transportation said Tuesday that the San Francisco Bay Area Rapid Transit District has exercised an option for 150 additional rail cars valued at about $274 million.

With the option, the transit authority has now placed firm orders for 410 cars with a total value of about $921 million, the company said.

Bombardier will assemble the cars at its plant in Plattsburgh, N.Y.

Ten pilot cars are to be delivered in 2015 for testing, with the remaining 400 to be delivered between early 2017 and the spring of 2020.

The initial deal, which was announced earlier this month, also includes additional options which, if exercised, would bring the total number of cars ordered to 775 and the total value of the order to $1.6 billion.

http://www.cbc.ca/news/business/stor...isco-bart.html

[davidivivid]

Another Bombardier deal announced today...

Bombardier to realize $417-million from Paris commuter rail deal

A consortium that includes Bombardier Transportation has received the green light to supply an additional 210 rail cars worth $1.3-billion (U.S.) to the Greater Paris commuter network.

As a consortium member responsible for a third of the order, the Berlin-based division of Quebec’s Bombardier Inc. will realize $417-million from the order, the company said Friday.

[...]

http://www.theglobeandmail.com/globe...rticle4379664/

[The Gibbroni]

There is also the Garuda deal:

Bombardier sells $607M of regional jets

Bombardier Aerospace has won a major order to deliver new aircraft to a subsidiary of Danish leasing company Nordic Aviation Capital that will lease the aircraft to Garuda Indonesia airlines.

The firm order for 12 CRJ1000 planes is valued at $607 million at list prices.

Garuda is the first customer in the Asia-Pacific region for Bombardier's latest 100-seat regional jet. It already has six direct orders, placed in February, for the plane and has options for 18 more after considering competitor Embraer's E-190.

[...]

http://www.cbc.ca/news/business/stor...es-garuda.html

[The Gibbroni]

And yesterday's Westjet deal:

Bombardier receives order from WestJet for 20 aircraft

2012-06-28 15:05 ET - News Release

WESTJET PLACES CONDITIONAL ORDER FOR UP TO 45 BOMBARDIER Q400 NEXTGEN AIRCRAFT

Bombardier Inc.'s Bombardier Aerospace has signed a conditional order with WestJet Airlines Ltd. for 20 Q400 NextGen turboprops following the letter of intent to purchase the aircraft that WestJet announced on May 1, 2012. The transaction also includes options on an additional 25 Q400 NextGen aircraft.

Based on list price, a firm order for 20 Q400 NextGen aircraft would be valued at approximately $683-million (U.S.) and could increase to approximately $1.59-billion (U.S.) should the 25 options be converted to firm orders.

[...]

http://www.stockwatch.com/News/Item....&news_region=C

[Nouvellecosse]

Well isn't that something. Westjet doesn't use anything other than Boeing 737 aircraft at the moment, so for them to make such a huge order of Qs is pretty significant. Although I've traveled on both their 737s and a Q400 with Porter, and I definitely preferred the Boeing. They're both faster, roomier, and despite the "Q for quiet" designation, the Boeing was definitely quieter.

[The Gibbroni]

Originally Posted by Nouvellecosse

Well isn't that something. Westjet doesn't use anything other than Boeing 737 aircraft at the moment, so for them to make such a huge order of Qs is pretty significant. Although I've traveled on both their 737s and a Q400 with Porter, and I definitely preferred the Boeing. They're both faster, roomier, and despite the "Q for quiet" designation, the Boeing was definitely quieter.

And I'll take an A-380 over either of the two!

They serve different markets. One is a 76 seat regional turboprop for use on short runs/runways, the other is a 120-160 seat jet for use on longer runs/longer runways.

[Nouvellecosse]

Westjet has always stuck to a single model of jet to reduce costs by simplifying maintenance, pilot training,etc. Their current fleet is only 98 planes. For them to place an order for up to 45 of the Qs, it seems like they are planning to phase out the Boeings and replace them with the Qs over time. If that is indeed the case, this isn't a matter a different markets, but of a different plane being used for the same routes.

[The Gibbroni]

Originally Posted by Nouvellecosse

Westjet has always stuck to a single model of jet to reduce costs by simplifying maintenance, pilot training,etc. Their current fleet is only 98 planes. For them to place an order for up to 45 of the Qs, it seems like they are planning to phase out the Boeings and replace them with the Qs over time. If that is indeed the case, this isn't a matter a different markets, but of a different plane being used for the same routes.

No, they're planning on starting up a regional service. You don't replace a 160 seat jet with a 76 seat turboprop just for the hell of it.

You could always, I dunno... maybe read the article?

[casper]

Originally Posted by Nouvellecosse

Westjet has always stuck to a single model of jet to reduce costs by simplifying maintenance, pilot training,etc. Their current fleet is only 98 planes. For them to place an order for up to 45 of the Qs, it seems like they are planning to phase out the Boeings and replace them with the Qs over time. If that is indeed the case, this isn't a matter a different markets, but of a different plane being used for the same routes.

They are getting closer to the point where they have 737 flights on all the domestic routes that can support an aircraft of that size. For lighter routes they need a smaller more fuel efficient aircraft.

From other articles I have read, it sounds like some existing routes will have Qs replace the 737 to increase frequency or match actual passenger load. Does not sound like the plan is to remove any 737 from their fleet, just reallocate them to routes that can support the larger aircrafts.

As an example in Saskatoon we use to have WestJet service to Winnipeg (with many passengers connecting to Ontario/Quebec bound flights) when WestJet started the Saskatoon-Toronto route they dropped Winnipeg since they could not fill both flights. Saskatoon-Winnipeg may be one of the routes that comes back with the Qs.

[shreddog]

Nexen to be acquired by China’s CNOOC for $15.1 billion in cash

CALGARY—Oil and gas producer Nexen Inc. (TSX: NXY) has agreed to be acquired by China National Offshore Oil Company for $15.1 (U.S.) billion cash.

The Calgary-based firm will be purchased by CNOOC Ltd. in an all-cash transaction worth $27.50 per Nexen share.

The agreement is a 66 per cent premium over the 20-day weighed volume average of Nexen shares, and a 61 per cent premium on the closing price of its shares on Friday at the New York Stock Exchange.
...

I'm sure most have heard about this and expect that many will respond with the usual crap about loss of national resources/Cdn companies selling out/big bad Chinesee boggie men taking over/etc, however what is more interesting is the longer term impact this sale will have on Canada - namely will there be more Chinese investment in Canada replacing the tradition foreign sources like Europe and US, or will this be just a flash in the pan??

IMHO, I think we will see more of this, but in the end the amount of foreign investment in Canada will remain static (there are many other options out there). As such, I think it is a good thing as it allows us to diversify our pool of capital to build a better Canada.

Note 1 - to those who will whine about this loss of Canadian sovereignty, please read that while Nexen is in the Oil Sands, over 80% of its business is currently off shore - what CNOOC is really buying is oil production in the Gulf, the North Sea and in Yemen all managed (currently) though a Calgary head office.

Note 2 - to those that will decree that Harpo is selling us out, please be aware that in their time in office the Libbies NEVER once rejected a foreign purchase of a Cdn asset, unlike the Conbots who prevented the Potash and MDA sales (among others). This is not an idealogical issue!

[casper]

Originally Posted by shreddog

Nexen to be acquired by China’s CNOOC for $15.1 billion in cash

I'm sure most have heard about this and expect that many will respond with the usual crap about loss of national resources/Cdn companies selling out/big bad Chinesee boggie men taking over/etc, however what is more interesting is the longer term impact this sale will have on Canada - namely will there be more Chinese investment in Canada replacing the tradition foreign sources like Europe and US, or will this be just a flash in the pan??

IMHO, I think we will see more of this, but in the end the amount of foreign investment in Canada will remain static (there are many other options out there). As such, I think it is a good thing as it allows us to diversify our pool of capital to build a better Canada.

Note 1 - to those who will whine about this loss of Canadian sovereignty, please read that while Nexen is in the Oil Sands, over 80% of its business is currently off shore - what CNOOC is really buying is oil production in the Gulf, the North Sea and in Yemen all managed (currently) though a Calgary head office.

Note 2 - to those that will decree that Harpo is selling us out, please be aware that in their time in office the Libbies NEVER once rejected a foreign purchase of a Cdn asset, unlike the Conbots who prevented the Potash and MDA sales (among others). This is not an idealogical issue!

Is there a real difference (from a purely Canadian perspective) to Nexxen being taken over by CNOOC instead of any major oil multi-national based in the US (e.g. Chevron) or Europe (Shell). If the job stay in Canada I don't think there is a problem.

Some may argue that CNOOC being controlled by the Chinese government is a problem. I am less convinced, for years Petro-Canada was controlled by the Canadian government until it was sold off; however that did not stop it from expanding outside of Canada. In the uranium business you have Ariva controlled by the French government and active in Canada.

[isaidso]

The issue with CNOOC is due to it being controlled by the Communist party of a major power. If this was a public Chinese firm it wouldn't be a problem. The issue is that maximizing the financial benefit of the oil sands isn't this company's #1 goal, it's ensuring supply of a limited resource for China. If enough assurances for Canada/Alberta can be satisfied, fine. That's not necessarily going to happen though.

CNOOC is far from being a transparent public company accountable to shareholders or our regulators.

[davidivivid]

Originally Posted by shreddog

Note 1please read that while Nexen is in the Oil Sands, over 80% of its business is currently off shore - what CNOOC is really buying is oil production in the Gulf, the North Sea and in Yemen all managed (currently) though a Calgary head office.

CNOOC wants the Calgary head office to oversee its North and Central American operations. However, has you have just stated, only a limited part of Nexen's business is concentrated in North America and it recently has had some problems with its new wells in the Gulf of Mexico. In other words, I believe a lot of Nexen's most valuable assets, situated outside the Americas, will not be run from Calgary anymore and I fear that in the long run, the Calgary head office will bear the title but none of the functions.

Chinese public companies are controlled very thightly by the chinese governement so I have some difficulty to believe its canadian subsidiary would have more control over its operations.

[SHOFEAR]

My concern is who will do all the engineering for all of their facilities and pipelines and is more of their fabrication going to be done in China?

Like previously mentioned, China will use this as a tool to feed their economy...is that going to be limited to resources or do they want the labour and jobs as well?

[shreddog]

Originally Posted by davidivivid

...In other words, I believe a lot of Nexen's most valuable assets, situated outside the Americas, will not be run from Calgary anymore and I fear that in the long run, the Calgary head office will bear the title but none of the functions.

For those not familar with Nexen, it was basically a clusterf#@k in the making and likely would not have been managing much in the future anyway. The word on the street is that even in the best case scenario, there will be some serious staff reductions due to this purchase. And actually that is a good thing - here's why:

A bunch of high quality, smart people will suddenly find themselves out on the street with a nice little cash seed. They will likely either start up a junior or find themselves picked up ASAP by some other junior/senior company and be better off for it. The O&G industry in Canada/Calgary continually goes through these renewals and is always much better for it.

The good people will be better off for it, and the others will always find jobs elsewhere.

Originally Posted by davidivivid

Chinese public companies are controlled very thightly by the chinese governement so I have some difficulty to believe its canadian subsidiary would have more control over its operations.

Don't know enough on how the control works, but I don't see how it can be much tighter than how ExxonMobil runs the show. That said, there will always be some level of local control and those at the high end will leave and start something else if they're bored.

I find that in Calgary there seems to be a different approach to layoffs and changing of the management guard. If people don't like what they see, they'll go strart/do something else - and getting a bag'o cash to do that is always a bonus!

[shreddog]

Originally Posted by SHOFEAR

My concern is who will do all the engineering for all of their facilities and pipelines and is more of their fabrication going to be done in China?

There is a reason why Statoil, Shell, Total, ExxonMobil and other foreigns do the engineering local - and it isn't because of the dollars. Will Chinese engineering be cheaper?? Yup. Will it be better?? Definitely not at first - and even the Chinese won't risk multi-Billion $ programs on "learn on the job" engineering. Now that said, Nexen/OPTI has had a lot of bad engineering as of late, so maybe some competitive nature might be good!

As an engineer, I don't retain my job because I am more cost effective than someone in India or China - that will never be the case. I retain my job by ensuring that my overall ROI is better than offshoring! And that must always be the case.

Originally Posted by SHOFEAR

Like previously mentioned, China will use this as a tool to feed their economy...is that going to be limited to resources or do they want the labour and jobs as well?

I don't really understand this sentiment?? First off, CNOOC will not sell the oil to China any differently than Cenovus. Both will sell at a world rate, both will export the product in the most cost effective manner, both will respect the rules that Ab/Ca impose on them. Just because the gov't of China owns CNOOC doesn't change any of this.

As for fabrication, many of the components have already been offshored - Kearl components via Pasco - by non-Chinese companies. This is a fact of life, however it is not as cheap nor as easy as some believe. That said, as long as the value is still there, companies will still grow in Leduc - making something halfway around the world may not be the best overall solution - but if it is, expect all the players in this multi-Billion dollar industry to go that way, not just the Chinese.

[caltrane74]

Moody’s deems Canada ‘better than most other top-rated sovereigns’

Barbara Shecter | Aug 16, 2012 1:21 PM ET | Last Updated: Aug 16, 2012 5:17 PM ET
More from Barbara Shecter




Canada might want to ignore recent criticism about the work of credit ratings agencies.

In a glowing report released Thursday, Moody’s Investors Service says Canada’s triple-A rating is supported by the country’s economic performance and government financial position that have held up to the effects of the global recession “better than most other top-rated sovereigns.”

Furthermore, Moody’s says in the annual report out of the New York, “Canada did not experience a financial crisis such as the one that affected the U.S. and a number of European countries.”

The ratings agency notes that the recession did reverse an earlier improvement in debt ratios, but reasons that they are improving and did not deteriorate as much as in most other triple-A-rated countries.

On the housing market, which, along with high household debt, is raising concerns in some quarters, Moody’s “considers risk … to be manageable in terms of its potential effect on federal finances.”

http://business.financialpost.com/20...ed-sovereigns/

[TallBob]

Not a big fan of the Harper gov't (+'s & -'s) aside, and not knowing a lot about the Oil industries, I'd like to see the gov't reject the CNOOC offer. I don't think long term Canada/Alberta will be a big benifactor of this tranaction.

[SteelTown]

Hamilton has secured its title as the No. 1 city to invest in Ontario.

http://www.thespec.com/news/business...estment-report

The Real Estate Investment Network of Canada (REIN) announced Tuesday that the city remains the top location across the province for the second consecutive year.

"It's well deserved," says Neil Everson, Hamilton’s Economic Development Division Director, who’s thrilled to be dubbed again as one of Ontario’s hottest economies.

"But it’s not surprising. We've had a perfect year."

The detailed investment report set for release Tuesday identifies cities, towns and regions poised to outperform other regions of the province over the next five years.

Hamilton's growth spans all industries and it's difficult to pinpoint an area of success, says Everson.

He points to the city's vacancy rates which have dropped another 2.3 per cent.

"Buildings are being filled and companies are leasing those vacant spaces.”

Everson also points to building permits where Hamilton totaled $562-million in the past year. In Mississauga, permits totaled $385 million.

“Known formerly as a hard-working steel town, the city has quickly shed this image in the eyes of potential investors – as indicated by the record breaking building permit values Hamilton has experienced in recent years,” said REIN Founding Partner Don Campbell. “The wheels have been set in motion to create a major high-tech industrial park in conjunction with growth at McMaster University.”

Campbell believes that growth has sparked an entrepreneurial spirit in the city.

“This is further proof that the diversification of Hamilton’s economy is starting to pay great dividends,” Everson says.

TOP ONTARIO INVESTMENT CITIES

1. Hamilton
2. Kitchener and Cambridge
3. Waterloo
4. Barrie
5. Brampton
6. Ottawa
7. Orillia
8. Durham Region (Whitby, Pickering and Ajax)
9. Toronto
10. Vaughan
11. Brantford

[MolsonExport]

^London is conspicuously absent. Maybe b/c very little investment is occuring?