Airports and Small Cities

Small cities like Windsor have no chance without a viable airport. The entire Windsor Essex region should be supporting the efforts to improve and expand service at our local airport.

Below is a good read published online in the New York Times.

By ELIZABETH OLSON
Published: August 17, 2009

Small Cities Pay to Keep Air Travel

With airlines cutting back service in a weak economy, some cities that are too big to qualify for federal help but too small to keep the planes flying in have stepped up with ways to hang on: paying the airlines, either directly or indirectly.

The cities, like Myrtle Beach, S.C., and Duluth, Minn., have tried various strategies to keep their lifeline to the outside world.

Myrtle Beach, for example, has reduced landing fees, terminal rents and other fees. In addition, the city’s convention and visitors bureau plans to spend $8 million — in money raised from private businesses and in state tourism promotion money — on a marketing campaign to attract more visitors, particularly golfers from northern states, said Bradley Dean, president and chief executive of the area’s visitors bureau.

Officials in Duluth are weighing whether to guarantee an airline that a certain percentage of seats will be filled. Once those targets are met, the city will profit.

“Anymore, the airlines don’t want to take the risks,” said Brian Ryks, executive director of the Duluth Airport Authority. “But they want all the rewards.”

While many of these cities have struggled for years to keep their airline service, the issue has become more acute in recent months. Airlines have been cutting capacity sharply for much of the last year — first as their costs rose with skyrocketing oil prices and then as the economy slowed, reducing demand for air travel. To save money, the airlines either eliminated service or significantly cut back on routes.

But some airlines have been willing to resume service if cities agreed to shoulder most — or all — of the financial risk.

The airlines confirmed their arrangements with cities, but declined to discuss the guarantee programs. Many of the cities are not part of the federal Essential Air Service program, which subsidizes service to about 150 communities.

Henry H. Harteveldt, travel industry analyst for Forrester Research, said changes in the airline industry had begun to change the financial relationship between the carriers and the cities.

The airlines have a right to ask for revenue guarantees, Mr. Harteveldt said. “There is no responsibility to serve a market that loses money.”

But, he said, some towns might have a hard time rounding up the support for guarantee programs. “At a time when basic services are being cut back, it’s hard to justify paying airlines for service.”

The cities left behind feel the economic pain, even beyond the sting of the broader economic downturn.

Roswell, N.M., for instance, lost airline service in 2002, said Bill Armstrong Jr., a board member of the Roswell-Chaves County Economic Development Corporation, and “it hurt us terribly.” He added, “We were like nomads in the desert looking for water.”

It took five years for Roswell to regain service, and that was only after the city offered a minimum revenue guarantee of $2.4 million over two years to American Eagle to fly from Roswell to the Dallas-Fort Worth Airport, Mr. Armstrong said.

The service has been so popular, he said, that $700,000 in community pledges have not been touched and the deal is being renewed next month.

Roswell has assembled a $360,000 fund to underpin a second program: a six-month tryout of American Eagle flights to Los Angeles International Airport. The city plans to use $40,000 from that fund to pay for a marketing campaign to persuade businesses and the public to buy seats, Mr. Armstrong said.

“This is the name of the game in weak economic times,” he said. “Communities have to do more. Airlines are hesitant to start a new service without economic support.”

Wichita, Kan., was a pioneer in the business of paying airlines to continue service. It acted after one of its biggest businesses, the headquarters of Pizza Hut, moved away more than a decade ago, and the city was looking for a way to assure service, recalled Valerie Wise, the air service and business development manager for the Wichita Airport Authority.

Through a combination of federal, state, local and private money, Wichita was able to guarantee revenues to some airlines to continue flights. Competition from low-budget airlines, in turn, pressured other carriers to lower prices, she said, to the benefit of business travelers, who had been paying walk-up fares of as much as $1,000.

The city now guarantees AirTran $6.5 million a year to assure flights to the airline’s hub city of Atlanta.

The airport in Latrobe, Pa., is trying a different tack after losing its only air service last month. Delta Air Lines had flown twice a day from Latrobe to Detroit.

The community is small but does not qualify for federal Essential Air Service subsidies, which underwrite service in rural areas, because it is within 70 miles of a large airport, in Pittsburgh. The Senate recently voted to fund the program for $175 million next year, a $39 million raise.

So Gabriel Monzo, executive director of the Westmoreland County Airport Authority, which operates the Latrobe airport, said the authority was considering whether to offer a complete service package to attract a carrier. It is looking, he said, at “handling ticketing and everything over and under the wing, including de-icing.”

He added, “We’re telling carriers: ‘Put up your kiosk, hang up your sign and we’ll do the rest.’ ”

But such partnerships do not always work out. Duluth, for example, has already been burned once in trying to entice an airline to serve the manufacturing, iron ore mining and medical enterprises in and around the city. In 2004, Mr. Ryks of the airport authority said, the city put up a $1 million minimum revenue guarantee in a deal with American Eagle for flights to Chicago O’Hare.

But after six months, O’Hare, which was having trouble handling all its scheduled flights, required the carrier to end flights from some destinations, and Duluth was one of them.

“The revenue guarantee was spent and then they were gone,” Mr. Ryks said.

So Duluth officials are considering a different sort of arrangement, this time with ExpressJet, a regional partner of Continental Airlines, to fly between Duluth and Chicago twice a day at a cost of $5.4 million for the first year.

“The plus is that with conservative figures factored in for revenues and expenses — and a 70 percent load factor,” he said, referring to the percentage of seats sold, “it is estimated there would be an $800,000 profit, and that would come back to the community.”

He conceded, though, “the wild cards are the load factors, the fare levels and the fuel costs. And the community takes the upfront risk.”

But if the airline can sell more seats, the city could make a profit on the deal because the carrier’s profits and expenses are already built in. “This way,” Mr. Ryks said, “we also get to share in any rewards.”

Chrysler to Build Fiat Cars in Mexico

Boy oh boy, talk about being naive--I was going to say boy scouts, but I have too much respect for them. This news is not surprising, but I still feel like we in Canada, and Windsor-Essex in particular, have been run over by a Mack Truck--no excuse me, a Fiat 500.

Over the past few months, I have written numerous stories of the Chrysler give-away to Fiat. Time and again I pointed to circumstances not well explained. Time and again I implored our local newspaper to do an in-depth analysis of this deal, the Fiat balance sheet, and what we would get. The response from the Windsor Star, nothing, on occasion, an embarrassing piece of journalism. Senior management at the Windsor Star chose to deploy their staff and resources elsewhere.

Below is an article published online Monday August 17, 2009:

AP Source: Chrysler to build Fiat 500 in Mexico
By TOM KRISHER (AP)

DETROIT — Chrysler Group LLC, now being run by Italian automaker Fiat Group SpA, is planning to build the Fiat 500 minicar at a factory in Mexico, according to a person briefed on the company's plans.

The automaker also is considering building a compact car in the U.S. that could be larger than the 500, according to the person, who did not want to be identified because the plans have not been made public.

Chrysler spokesman Gualberto Ranieri declined to comment Monday. But news of the Fiat 500 decision disappointed several members of the United Auto Workers union who had hoped that the minicar would be made at a U.S. factory because of UAW cost-saving concessions and the fact that Chrysler has received $15.5 billion in U.S. government aid.

It was not clear which Mexican factory would get the 500, but it likely would be a plant in Toluca that builds the PT Cruiser sedan and Dodge Journey crossover and employs more than 2,100 workers organized under a Mexican union. Chrysler also has a truck assembly plant in Saltillo, Mexico.

Even though the UAW has made concessions to reduce labor costs, workers still make far less per hour at Mexican factories. Since small cars generally fetch lower prices than larger vehicles, the profit margins are narrower, making low costs important. Also, Mexican factories are closer to Brazil, a key market for Fiat.

Turin-based Fiat's management is trying to turn Chrysler around. The Italian automaker took a 20 percent stake in Chrysler earlier this year as part of its exit from bankruptcy protection. The U.S. government owns an 8 percent stake in the Auburn Hills, Mich.-based Chrysler, which lost $8 billion last year.

Fiat, as part of its purchase, had announced plans to bring the hugely popular 500 to the U.S., along with the Alfa Romeo brand and Fiat-designed compact and midsize cars. The Italian automaker also plans to bring engines, transmissions and other technologies to Chrysler.

UAW members were hoping that Fiat would build the 500 at an assembly plant in Sterling Heights, Mich., which is slated to close by the end of 2010.

"We want to keep as much work as we can in this country and in Michigan," said Bob Stuglin, president of a UAW local at the Sterling Heights parts stamping plant which is close to the assembly facility.

Stuglin, who said he had not been told of the decision by the company, said that UAW workers have given up a lot in an effort to keep work at their factories.

The Wall Street Journal reported Chrysler's decision on Monday.

AP Auto Writer Dan Strumpf in New York contributed to this report

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Given all the concessions made by auto workers, all the taxpayer money invested, and given our capacity and capabilities in the US and Canada, and right here in Windsor-Essex, this move by Fiat should at the very least be up for review.

Oh, and by the way, I wonder how much Mexico invested to save both Chrysler and Fiat?

Which Goods Will Cost More Under New HST Tax?

On April 14, 2009, I challenged the top management over at the Windsor Star to do a better job covering important issues, especially in the areas of finance and business. As a matter of fact, I strongly suggested more information was needed about the new Harmonized Sales Tax (HST). Read my post.

I am sorry to say, other than one or two editorials (written by John Coleman?), I have not seen much about the HST on the pages on our daily paper. Oh, I forgot. Top honcho Jim Venney and assistant top honcho Marty Beneteau have been busy with the CUPE strike. And business writer and super snooper Grace Macaluso has been busy attacking the pay and perks of the new General Motors Board of Directors.

Like other Windsor-Essex residents, I have to search elsewhere to get the information we need.

Below are some paragraphs from a Toronto Star online article of August, 15 2009, written by Steve Lambert of the Canadian Press.

• The Canadian Taxpayers Federation is calling on Ontario and British Columbia to release a full list of goods that will cost more when the two provinces enact a harmonized tax next July.

• Ontario has given reporters a partial list of goods that will cost more under the HST. Heating fuel, electricity, gasoline, tobacco, taxi fares, lawyers' fees, haircuts and other items will be taxed at 13 per cent instead of five. But the opposition has been pulling out other examples, such as funerals and maintenance work on condominiums, almost daily.

• Rather than providing a website or other location listing all goods that will increase, Ontario is suggesting that people call the department's general line with questions.

• "The Ministry of Finance ... has an information line that people are free to call, and are encouraged to, because these are significant tax changes and we are happy to take people through them," said Alicia Johnston, a spokesperson for Ontario Finance Minister Dwight Duncan

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The proposed tax, which will merge the PST and GST into a flat 13% rate, is set to be introduced on July 1, 2010. So the Windsor Star still has a chance to do a real, in-depth story, laying out pros and cons of this tax, and letting consumers know what goods will be more expensive.

I have three big questions. Has an analysis been done on how many jobs will be lost (or not) because of this new tax? How much if anything will this tax cost our health care system? And how much will this tax cost our education system?

"eHealth Scandal" Won't Go Away

My readers will know that I have written about the "eHealth Scandal" on more than one occasion. I have done so because results of public opinion polling usually put health care issues at the top of any list regarding voter concerns. Our elected officials know this and respond accordingly, usually by spending lots more of our money on "health care".

eHealth is the Ontario government organization mandated to put all medical files in electronic form. This involves big money! According to the Ontario Ministry of Finance, website eHealth allocations for 2008-2009 fiscal year is-- $522,847,000. Wow! How many cancer treatments, how many hospital beds, and how many nurses can be paid for with half a Billion Dollars every year? As you can see, the reason I write about eHealth is because there is a lot at stake.

Read my post of August 6, 2009 as a refresher.

And my post of June 18, 2009.

And my post of June 8, 2009, where I wrote about some of the management and spending practices over at eHealth, such as:

• "The Ontario Conservatives have alleged these untendered contracts have gone to "Liberal Friendly Firms". Oh boy!

• "Ms. Kramer was hired last November (2008) at an annual salary of $380,000, according to documents obtained by The Globe and Mail through a freedom of information request. As well, documents show, in March (2009), after just 5 months on the job, Ms. Kramer was awarded a bonus of $114,000."

Now, everyone makes mistakes.  I have made many. Government is a big operation, and that mistakes occur should not be a surprise. But what has surprised me is how my old friend and colleague, Premier Dalton McGuinty, has allowed himself (according to Toronto media reports) to be dragged into this whole mess.

Shortly after these management and spending practices became public (it is now claimed that $16 million in untendered contracts were let) we saw the resignation of the CEO Sarah Kramer and Board Chairman Dr. Alan Hudson. In my opinion these resignations were more forced than voluntary.

Up until recently, Dr. Alan Hudson had been a personal favourite of Premier McGuinty. So you can imagine my surprise when I read in the Toronto Star on August 12/09 (unfortunately the Windsor Star has been missing in action on this one) the following quotes by McGuinty:

• 
  "Obviously, Dr. Hudson was a strong influence in all of this; I relied heavily on him," said McGuinty.
  "He made it clear to me that if he was going to take on an additional responsibility with electronic health records, he thought that Sarah Kramer would be indispensable in helping us to achieve our objectives."
  In hindsight, he added, "it's obvious that we made a mistake, but at the time the best advice that we had was that Ms. Kramer ... was performing very well, and based on that advice and the strongest recommendation, I thought it was the right thing to do, we all thought it was the right thing to do."
  

When McGuinty says "it was the right thing to do" he is referring to hiring Ms. Kramer as CEO on the advice of Dr. Hudson.

Records show Ms. Kramer was hired by "order in council"--a fancy term for a political appointment. This means the political opposition and others will be able to claim McGuinty had a big hand in hiring Ms. Kramer.

I know my old friend and colleague Premier McGuinty to be a stand-up guy, and will accept his share of responsibility for this whole thing without qualification. But it is now obvious he has to move this out of the political arena, and the sooner the better.

The provincial Auditor General, as I understand it, will early this fall have a report for public consumption. During my last years as MPP, representing Essex South, I served as Chairman of the Public Accounts Committee. The provincial Auditor General works for this committee and I know first hand they love this stuff. McGuinty needs to be more proactive, and get ahead of this report. He needs to establish a panel with authority to review everything that happened, and recommend solutions for the future. If not, this whole thing will end up being just one big political fiasco.

"Three Amigos Summit"

The Presidents of Mexico and United States along with the Prime Minister of Canada, have a formal once a year summit now commonly referred to as the "The Three Amigos Summit". This of course, is to further the North American Free Trade Agreement (NAFTA). A host of other current issues, such as swine flu, drug gangs, labour rights, climate change etc received attention as well.

The Summit held over the weekend of August 8th, 2009, in Guadalajara, Mexico did not seem to garner the type of media attention, especially here in Windsor Essex, as deserved. If there is one region of Canada that needs all the information it can get regarding trade with Mexico and the United States it is Windsor Essex. They have to start doing a better job over at the Windsor Star on these matters.

Below is the full text of a joint statement released by the White House briefing room. It makes for very interesting reading.

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THE WHITE HOUSE

Office of the Press Secretary
___________________________________________________________________________
For Immediate Release August 10, 2009

JOINT STATEMENT BY NORTH AMERICAN LEADERS

Guadalajara, August 2009

We, the leaders of North America, have come together in Guadalajara to promote the global competitiveness of our region, foster the well-being of our citizens, and make our countries more secure. We build our collaboration on the understanding that our deepening ties are a source of strength and that challenges and opportunities in one North American country can and do affect us all. North American cooperation is rooted in shared values, complementary strengths, and the dynamism of our peoples. We are confident that working together we can help our societies thrive in the challenging, competitive, and promising century ahead.

North America’s coordinated response to the initial outbreak of the H1N1 flu virus has proven to be a global example of cooperation. We set an example of a joint, responsible, and transparent response, enabling other regions to react quickly to protect their populations. Through planning and foresight, we were quickly able to put effective health measures in place. We will remain vigilant and commit ourselves to continued and deepened cooperation. We will work together to learn from recent experiences and prepare North America for the upcoming influenza season, including building up our public health capacities and facilitating efficient information sharing among our countries.

Promoting recovery from the current global economic crisis is a priority for each of us. By working together, we will accelerate recovery and job creation, and build a strong base for long-term prosperity. We look forward to the coming G20 Summit in Pittsburgh and will join efforts to ensure that the G20 continues to advance effective global responses to the crisis, including working to strengthen international financial institutions that are vital to assisting countries to restore economic vibrancy. The Inter-American Development Bank (IDB) plays a crucial role in mitigating the effects of the crisis in the Americas, particularly for the most vulnerable citizens of our Hemisphere. We support an accelerated review of the IDB to ensure it has sufficient short-term lending capacity.

Our integrated economies are an engine of growth. We are investing in border infrastructure, including advanced technology, to create truly modern borders to facilitate trade and the smooth operation of supply chains, while protecting our security. Building on these investments, we will work together to strengthen the resilience of our critical infrastructure, which transcends borders and sustains the well-being of our communities and economies. We will cooperate in the protection of intellectual property rights to facilitate the development of innovative economies. We commend the progress achieved on reducing unnecessary regulatory differences and have instructed our respective Ministers to continue this work by building on the previous efforts, developing focused priorities and a specific timeline.

North American trade is a vital component of our economic well-being and we pledge to abide by our international responsibilities and avoid protectionist measures. We reiterate our commitment to reinvigorate our trading relationship and to ensure that the benefits of our economic relationship are widely shared and sustainable. We will seek to promote respect for labour rights and protection of the environment with a continuing dialogue to address the functioning of the Labor and Environmental side agreements. This dialogue must result in mutually agreeable and cooperative activities with the aim to enhance the well-being and prosperity of our citizens and the economic recovery of our countries.

We recognize climate change as one of the most daunting and pressing challenges of our time and a solution requires ambitious and coordinated efforts by all nations. Building on our respective national efforts, we will show leadership by working swiftly and responsibly to combat climate change as a region and to achieve a successful outcome at the 15th Conference of the Parties of the UN Framework Convention on Climate Change. We also recognize that the competitiveness of our region and our sustainable growth requires a greater reliance on clean energy technologies and secure and reliable energy supplies across North America. Today, in agreeing to the "North American Leaders’ Declaration on Climate Change and Clean Energy", we reaffirm our political commitment to work collaboratively to combat climate change.

Transnational criminal networks threaten all three of our countries. To dismantle them and to make our populations more secure, we will continue to deepen cooperation built upon the principles of shared responsibility, the strengthening of national institutions, and respect for our respective national legal frameworks. Canada and the United States recognize the commitment and the sacrifices of the Mexican people and Government as they confront the cartels threatening society, and we pledge to them our continued support. Our three governments recognize that we cannot limit our efforts to North America alone, and we have agreed to instruct our respective Ministers to strive for greater cooperation and coordination as we work to promote security and institutional development with our neighbors in Central America and the Caribbean.

We are deeply committed to helping strengthen democratic institutions and the rule of law throughout the Americas. We support a leading role for the Organization of American States (OAS) as we work together to strengthen implementation of the Inter-American Democratic Charter. We have thoroughly discussed the coup in Honduras and reaffirm our support for the San José Accord and the ongoing OAS effort to seek a peaceful resolution of the political crisis - a resolution which restores democratic governance and the rule of law and respects the rights of all Hondurans.

We recognize and embrace citizen participation as an integral part of our work together in North America. We welcome the contributions of businesses, both large and small, and those of civil society groups, non-governmental organizations, academics, experts, and others. We have asked our Ministers to engage in such consultations as they work to realize the goals we have set for ourselves here in Guadalajara.

President Calderón and President Obama welcome Prime Minister Harper’s offer to host the next North American Leaders´ Summit in 2010. We will continue to work through this North American Leaders’ Summit process, in an inclusive and transparent manner, for the common benefit of the people of Mexico, Canada, and the United States.

Modest Electoral Changes Approved at Windsor Council

Windsor city council members must be breathing a sigh of relief. As a matter of fact, I can hear it all the way here in Amherstburg. Under curious political cover, from our very own Windsor Star, the council members voted to maintain a bloated city council. Surprisingly, the Windsor Star gave their blessing to a continued bloated council via recent editorial comment.

Read my post of July 30/09.

For those readers outside the Windsor Essex region, you should know that the Windsor Star mantra has been for more regional government. Translated this means fewer politicians and less government. There is merit in this, although for rural communities and small towns, regionalism has usually translated into distant government, loss of history/community and little to zero tax savings.

So it came somewhat as a surprise to me that the Windsor Star put their political weight behind such modest electoral reform. More than 3 decades ago, Windsor created a ward system with 5 wards and 2 council members per ward. Council was perfectly willing to keep it this way until a citizens group collected enough names to send the whole matter to the Ontario Municipal Board (OMB). The OMB for sure would have made wholesale changes. This risk was to great for Council, they had to do something.

So on Monday of this week Council opted for the safest change possible, a 10 ward system 1 council member per ward. This way every incumbent will have a good chance for re-election. But really, that is not what concerns me.

The City of Windsor has just gone through a 101 day strike. Two Canadian Union of Public Employees (CUPE) locals and the city were in a fierce struggle. The Windsor Star weighed in heavily and often against CUPE. In my opinion the lines between editorial and straight reporting were shamelessly blurred. It is also my opinion that this happens often at the Windsor Star to the detriment of our entire region. All one has to do is look at the reporting about the new proposed border crossing. If that is not shameless I don't know what is. I fully disclose that for 11 years I was a senior corporate executive at the companies which own, mange and operate the Ambassador Bridge.

For the Windsor Star to support more regional government, and a less costly administration for the City of Windsor (during the middle of a strike) and then support and maintain a position for a bloated council for Windsor, makes no common sense. What is the reason or reasons for such a significant about face? We will see their hand much more clearly as the next political contest (2010) unfolds.

The problem with most readers is that they believe newspapers and reporters have no bias and just report the news. I wish it were so.

The Detroit River

The Detroit River or "Rivière du Détroit", which translates literally as River of the Strait, is 51 km long and serves as a natural boundary between Canada and the United States. A Strait is a waterway connecting two large bodies of water. This beautiful waterway is one of the busiest in the world and travels south from Lake St. Clair to Lake Erie.

Kissing the shorelines of many small communities, it also flows past South East Michigan, one of the largest metropolitan communities in the United States. For those who live outside the Region where this great River flows, it is hard to imagine its size and beauty.

The French were the first non-natives to navigate this River and to land on what would become the shores of Detroit. The first sailing ship on the Upper Great Lakes was the Griffon, 1679. On board was Robert Cavelier LaSalle, who would become one of the most celebrated explorers and builders of New France. As LaSalle passed through on the Griffon in 1679, he used these words to describe the scene at the mouth of the Detroit River:

• "The islands are the finest in the world. They are covered with forests of nut and fruit trees, with wild vines loaded with grapes. From these we made a large quantity of wine. The banks of the Straight are vast meadows and the prospect is terminated with some hills covered with vineyards, trees bearing good fruit, and groves and forests so well arranged that one would think that Nature alone could not have laid out the grounds so effectively without the help of man, so charming was the prospect...The country is well stocked with stags, wild goats, and bears, all of which furnish excellent foods."

During the 20th century, mass urbanization and reckless industrial pollution took its toll on the Detroit River. However, mandated government initiatives have improved the situation. In a 2007 interview, John Gannon, a senior scientist with the International Joint Commission, stated "It's a lot better than people think". Mr. Gannon went on to give the Detroit River a B- for its recent improvements.

Check out a recent presentation Mr. Gannon made on Great Lakes Urban Habitat.

While improvements to the condition of the Detroit River is good news, a great deal more needs to be done. Currently, the United States and Canadian governments have allocated hundreds of Billions of stimulus dollars for various sectors of the economy. I may have missed it, but I have not seen significant allocations for further rehabiltation of this great natural resource and wonder.

As we have already seen, both the U.S. and Canadian governments continue to move around already allocated stimulus dollars as priorities change. A strong economic case can be made for some of this stimulus money to be used on further improvements to the Detroit River.

I am afraid that if it's not done now, governments will be too broke to do anything after all this stimulus spending.

"Cash for Clunkers" Update

On August 4th I wrote about the U.S. "Cash for Clunkers" program. Read my post.

I promised my readers a follow-up. On August 6th the U.S. Senate voted on:

• Senate Vote 270 - H.R.3435: On Passage of the Bill. A bill making supplemental appropriations for fiscal year 2009 for the Consumer Assistance to Recycle and Save Program.

In plain English the above is the "cash for clunkers" program. The bill carried by a vote of 60 to 37 and added $2 Billion USD to the existing (now depleted) fund. Dealers in the United States claim that 250,000 sales have been made using the rebate for the first $1 Billion USD. So, if that claim is correct, dealers can expect the progam to help sell another 500,000 cars.

Published statistics indicate 45% of cars being sold are from American manufactures and the improved mileage is approximately 9.6 miles per gallon.

A Very Interesting Story From BusinessWeek Magazine

A very interesting story from BusinessWeek magazine.
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INVESTING IN RENEWABLES

European Green Energy Chases US Stimulus Cash
By Mark Scott

European renewable-energy players such as Enel Green Power and Iberdrola Renovables look to take advantage of stimulus spending with US projects.


As the White House hammers out how to spend some $80 billion in stimulus money aimed at kick-starting investment in renewable energy, the race for a piece of the action is on. And while plenty of Americans are on the starting line, many winners are likely to come from across the Atlantic. "The stimulus package is a big incentive to invest," says Francesco Starace, president of Enel Green Power, a new subsidiary of Italian utility Enel.


REUTERS
A solar park near Seville, Spain. The Europeans have a substantial head start. Iberdrola Renovables, a unit of Spanish energy company Iberdrola, is the world leader in renewable power and already No. 2 in U.S. wind generation (behind Florida's FPL Group). Portugal's EDP Renováveis is third in U.S. wind and a growing force globally. In manufacturing, Denmark's Vestas is the world's biggest wind-turbine maker, and Spain's Gamesa is No. 3, behind General Electric.

Although the details of the stimulus plan aren't yet finalized, developers will get tax credits or grants worth 30 percent of the cost of renewable-energy projects started by the end of 2010. That has the Europeans planning big investments for years to come. Iberdrola expects to spend $2 billion-plus annually in the U.S. through 2012, up from $400 million in 2007. EDP Renováveis says it will invest $5 billion in the U.S. over the same period, while Enel Green Power plans U.S. spending of $1.5 billion by 2013 -- a figure that could jump to $7.5 billion if financing costs fall. As much as $33 billion could be invested over the next two years, at least a third of it from Europe, estimates consultancy Emerging Energy Research.

Some spending already under way may benefit from the incentives, too. Enel Green Power on Apr. 15 unveiled two geothermal plants in Nevada, built at a cost of some $200 million, which use the earth's heat to generate electricity for 40,000 homes. And on Apr. 17, Iberdrola opened a $400 million wind farm in Texas that will power 70,000 households. Both plan to file for stimulus money.

While there's sure to be opposition to funding Europeans, they will put plenty of Americans to work. Vestas, for instance, in November opened a $100 million turbine-blade factory in Windsor, Colo., creating 650 jobs in the town 60 miles north of Denver. The company plans to invest a further $1 billion by 2010 at three more plants across the state and on sales offices nationwide, employing an additional 4,000 people.

Funding Edge
The Europeans are helping put some wind back into a sector that has been slowed by the credit crunch. Spending on clean energy projects in the U.S. fell 91 percent in the first quarter vs. the same period in 2008. Much of the investment had been funded by sales of tax credits for green energy, but as corporate profits have plunged, fewer companies need to buy them. Falling energy prices have also cut the incentive to invest in green technology.

One big advantage for the Europeans is their financial health. They tend to be subsidiaries of well-funded utilities, while American rivals are typically smaller. And the Europeans are sitting on a ton of cash. Iberdrola Renovables raised $5.9 billion in Spain's largest-ever initial public offering in 2007. Last year, EDP Renováveis pocketed $2.1 billion by selling a minority stake. Now, Enel plans to sell 40% of its shares in an offering analysts expect will fetch $4.5 billion. Says Rui Teixeira, chief financial officer at EDP Renováveis, "Our funding provides us with a competitive advantage."

Scott is a reporter in BusinessWeek's London bureau.
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I wonder if Canadian companies will take advantage of all this U.S. stimulus money.

Update on "eHealth" Scandal

On June 16, 2009 I wrote my second post about the eHealth scandal. Read my post.

On August 4th the Toronto Star had an excellent update. Have a read.


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Scandal-plagued eHealth gets third CEO in 3 months

Tanya Talaga
Queen's Park Bureau

Liberal government go-to man Rob Devitt is the new interim chief executive officer of scandal-ridden eHealth Ontario.

The electronic health agency's board of directors announced today that they have appointed Devitt, currently the president and CEO of Toronto East General Hospital, effective immediately.

Devitt will fill the eHealth top job until the end of this year as the board searches for a permanent CEO.

He replaces Ron Sapsford, the deputy health minister, who was appointed June 9 after former CEO Sarah Kramer left the agency on June 7.

Kramer parted ways with eHealth after a spending scandal involving nearly $16 million in untendered contracts and rich consultancy fees.

Devitt's appointment is part of a shakeup at the agency as the Liberals try to restore public confidence in eHealth Ontario. The scandal emerged after freedom of information documents requested by the Progressive Conservative party this spring showed the agency gave out $16 million in sole source contracts and relied on consultants who charged between $2,750 and $3,000 a day.

Yet these consultants also nickel-and-dimed taxpayers for small expenses such as a $1.39 muffin or a $4.45 cream cheese bagel.

The McGuinty government has relied on Devitt's expertise in the past. Recently, he was supervisor of The Scarborough Hospital. The troubled hospital had years of back-to-back deficits, bitter community relations and some of the highest death rates in Toronto, but Devitt is credited for helping to turn the hospital around.

"I am eager to meet the staff and stakeholders and help the agency deliver on the province's vital ehealth strategy," Devitt said in a release.

Ontario's Auditor General Jim McCarter is expected to release his investigation into the agency in early September.

What's in a Name?

The New Democratic Party (NDP) is thinking about changing its name. My advice is, don't do it.

The NDP has already changed its name once. In 1933, the Co-operative Commonwealth Federation (CCF) was formed.

In 1961, a founding convention was held for the New Democratic Party. Out with the old CCF and in with the new NDP.

For all of these years the CCF - NDP have occupied the left of centre, the left, and the far left of Canadian politics.

The CCF and NDP have had some modest electoral success over the past 7+ decades. The biggest success for the party has been in the Province of Saskatchewan, were it was first elected as a CCF government in 1944 under the leadership of Tommy Douglas. The CCF - NDP have been dominant in Saskatchewan politics ever since that first victory.

The NDP has also elected governments in the Provinces of British Columbia, Ontario, Manitoba, and Nova Scotia and in the Yukon. However, the party has never been successful at the national level.

A name is symbolic. The name of a political party is very symbolic and many thousands of party members are heavily invested in the name. After all, it means something, or at least is supposed to. A name change causes disruption at the very least, and at worst, alienation. Has anyone done a risk-reward analysis behind this idea, if so I would like to see it.

My second point, just as important as my first point, has the NDP forgotten we are in the middle of "The Great Recession"? Of all the important things political parties have to worry about, why would anyone expend any time or energy at this time on a name change?

What a spectacle this will be. While Canadians continue to lose jobs and homes in record numbers, and while the economy and industry continue to shrink, the NDP, they are focused on their name. I know the NDP probably don't like taking advice from a card carrying Liberal like me, but honestly, you are making a big mistake.

What's the Deal on Clunkers?

Lots of news these days about the success of the U.S. "cash for clunkers" law.

Back in late June, President Barack Obama signed into law the "cash for clunkers" provision. As is sometimes the case when laws are being drafted in the United States Congress, the "cash for clunkers" provision was written into and became part of a totally different piece of legislation. The way this works is that members of the House of Representatives and the U.S. Senate add or insert language into legisation which is already making its way through Congress. The reason for this tactic is that members especially like legislation which has a very good chance of passing and being signed by the President.

If you can believe it, as noted by the Associated Press, the "cash for clunkers" language was attached to "a measure keeping the wars in Iraq and Afghanistan from running out of money". The "cash for clunkers" legislation is no small potatoes, as it provides $1 Billion USD in funding.

Clunker qualifications:

Here are the basics:

• Vouchers of either $3,500 or $4,500 will be given to people who trade in an older vehicle to buy a new one.

• The trade-in, or clunker, must be no older than 25 years, have average gas mileage of less than 18 miles per gallon, and have been owned by the seller for at least a year.

• The new car must cost less than $45,000 and get more than 22 mpg. To get the higher voucher, the new vehicle must also average 10 more miles per gallon than the old one.

• Trucks—SUVs, pickups, and minivans—have different rules. An improvement of at least 2 mpg between the old and new vehicles qualifies for $3,500; 5 mpg or more entitles buyers to $4,500.

• There are no income limits on voucher recipients, nor restrictions on where the new cars are made.

The program came into effect on July 27/09 and has been so succesful that last Friday, July 31/09, the program was deemed to have run out of money. Wow, $1 Billion--gone just like that.

Anyway, American consumers need not fear. Last Friday, the House of Representatives passed a new meausure adding $2 Billion to the program. The legislation is now before the Senate for consideration.

I will keep you posted.

Celebrate Emancipation Day Weekend

Emancipation Day, which is celebrated on August 1st in Canada, has special meaning for me. Please read below the following legislation, passed by the Province of Ontario:

Emancipation Day Act, 2008
S.O. 2008, CHAPTER 25

Preamble

The British Parliament
abolished slavery in the British Empire as of August 1, 1834 by enacting an Act
being 3 & 4 Will. IV, chapter 73 (U.K.) on August 28, 1833. That Act
resulted from the work of abolitionists who struggled against slavery, including
Lieutenant Governor John Graves Simcoe who promoted the passage of an Act
restricting slavery in Upper Canada, being 33 Geo. III, chapter 7 (U.C.) enacted
on July 9, 1793. Upper Canada was the predecessor of the Province of Ontario.
Abolitionists and others who struggled against slavery, including those who
arrived in Ontario by the underground railroad, have celebrated August 1 as
Emancipation Day in the past.
Ancestors of Ontario’s Black community were one
of the founding communities of Ontario and Canada. The Black community has been
present in Ontario for more than 300 years.
The year 2008 marks the 30th
anniversary of the founding of the Ontario Black History Society, which is
dedicated to the study, preservation and promotion of the history of Ontario’s
Black community, and the 40th anniversary of the martyrdom of Dr. Martin Luther
King Jr. in the United States of America.
It is important to recognize the
heritage of Ontario’s Black community and the contributions that it has made and
continues to make to Ontario. It is also important to recall the ongoing
international struggle for human rights and freedom from repression for persons
of all races which can be best personified by Lieutenant Governor John Graves
Simcoe and Dr. Martin Luther King Jr. Accordingly, it is appropriate to
recognize August 1 formally as Emancipation Day and to celebrate
it.
Therefore, Her Majesty, by and with the advice and consent of the
Legislative Assembly of the Province of Ontario, enacts as
follows:

Emancipation Day
1. August 1 in each year is proclaimed as Emancipation Day. 2008, c. 25,
s. 1.
2. Omitted
(provides for coming into force of provisions of this Act). 2008, c. 25,
s. 2.
3. Omitted
(enacts short title of this Act). 2008, c. 25, s. 3.

Windsor City Council will Try Again

Members of Windsor City Council have indicated they will try again to establish a new electoral ward system in time for next year's vote.

The Council members embarrassed themselves while discussing a consultant's report which they themselves commissioned. Read my post of July 13 and my post of July 14, 2009. It was reported some 2 weeks ago that Council members spent three hours debating and voted down at least ten different motions before they finally gave up--with the current system intact, of course.

While Council allocated $50,000 for the report, I understand that only $20,000 was spent.Whether the report cost $20,000 or 20 cents should make no difference. The issue before Council is one of an outdated ward system. The current 5 wards, 2 Council members per ward system has significant population imbalance. But more importantly, the size of Council is too big. And it looks like some Council members are leaning towards a new, 10 ward system with one Council member per ward.

Given the fallout from the just ended 15 week strike involving nearly 1800 city workers, and the need for smaller, more effective, and more affordable government, to maintain the status quo with council numbers should not be an option.

Yesterday, I called the Mayor's office in Edmonton, Alberta and had a very helpful conversation with one of the staff members. The reason I called Edmonton is that I had heard that they, too, were changing their ward system. I was told that last week Edmonton City Council approved a new, 12 ward system with one council member per ward.

I was also told the City of Edmonton has a population of around 780,000. OK: 780,000 divided by 12 equals 65,000 residents per ward. Let's assume Windsor has 220,000 residents. If you divide this by 10, you get 22,000 residents per ward.

And oh, by the way, in Alberta, members of municipal councils are elected for three-year terms and not the four-year terms we have here in Ontario.

It would be unreasonable for Windsor City Council to move forward with a new ward system, which includes 10 wards and one Council member per ward. What is reasonable for the current time and circumstances in the City of Windsor is 6 wards, with one council member per ward.

Each Council member would represent approximately 36,000 residents--a far cry from the 65,000 residents represented by Edmonton City Council members.

Michael Vick the Football Player

Micheal Vick is famous, very famous.

He was born Michael Dwayne Vick on June 26, 1980, in Newport News, Virginia to struggling teenage parents. Brenda Vick was just 16 when she became pregnant with him. His father, Michael Boddie, was only a year older. The very young parents already had a girl, Christina.

Michael's father served three years in the army and bounced around from job to job before he settled in as a sandblaster in the Newport News shipyards. His mother, Brenda, became the mainstay in his life and that of his three siblings. Obviously, the children were very close to Brenda as they all took her last name.

Very early on, Michael showed great promise as a football player. He eventually chose to attend Virginia Tech University and arrived at the campus in Blacksburg in the summer of 1998. Michael did not disappoint the Virginia Tech fans, leading his team to the national collegiate championship game in 2000. Although Virginia Tech lost to Florida State, Vick made a great impression. The very next year, Vick lead his team to a Gator Bowl victory over Clemson, 41-20.

In 2001, and only in his sophomore year, Michael Vick turned pro after being drafted by the Atlanta Falcons. Soon thereafter he signed the largest rookie contract in NFL history, $62 million over six years. This was followed up by the signing in 2005 of a 10-year $130 million contract extension. The new contract made Michael Vick the highest paid player ever in pro football.

However, all of the above is not the reason Michael Vick is so very famous. Unfortunately for Vick, he became famous outside football circles after a U.S. federal investigation linked him to a vicious dog fighting ring called the Bad Newz Kennels. Vick pleaded guilty to funding the operation and killing some of the dogs after the fights. Bad Newz indeed.

This past week, the 29-year-old quarterback finished his 23-month federal sentence (18 months spent in a minimum security facility in Leavenworth, Kansas), when an electronic monitor was removed from his ankle early on July 20th, at his home in Hampton, Virginia.

While in jail, Vick went bankrupt; it has been claimed he owed anywhere from $10 million to $50 million. Wow.

I don't usually do sports stories, and this is not a sports story. It is about a successful person, who has run afoul of the law, pleaded guilty, and spent time in jail; he paid the price for his mistakes. I am writing this story because so many voices are calling for Michael Vick not to be reinstated in professional football. In plain English, many don't want this man to work at his job.

I think Michael Vick deserves a second chance. Below is his just released statement.

"I would like to express my sincere gratitude and appreciation to commissioner Goodell for allowing me to be readmitted to the National Football League," Vick said in a statement released by his agent, Joel Segal. "I fully understand that playing football in the NFL is a privilege, not a right, and I am truly thankful for the opportunity I have been given.

"As you can imagine, the last two years have given me time to reevaluate my life, mature as an individual and fully understand the terrible mistakes I have made in the past and what type of life I must lead moving forward."

I sincerely hope Michael Vick can become famous again, and this time for all the right reasons.