Friday, January 16, 2009

Peter McKay, of the Clan McKay

One of these days I may just have a good rant about the old Nova Scotia / Newfoundland Tory Cartel, but for now I'll satisfy myself with some facts on Minister McKay actions. There is of course the relationship between Brian Mulroney, Frank Moores, Elmer McKay, Karl Heinz Schrieber, Air Bus, Thyssen Industries, Helicopters and Military equipment in general to consider as well.

That said, Minister McKay and co-horts have once again decided to go outside the country to purchase a significant amount of Military equipment as most of us know. Many are asking why? And rightfully so in my opinion.

From a Green Party release;

"Although Minister MacKay denies the shipbuilding contracts were destined for off-shore bidders, his denials were contradicted by Public Works Minister Christian Paradis who previously suggested that if Canadian built vessels for the Navy and Coast Guard were too expensive, he would buy them elsewhere, threatening thousands of Atlantic jobs. Meanwhile, MacKay has promised funding for Canadian shipbuilding, but he has fallen short of actually committing to building the required naval and coast guard vessels in Canada. Especially in the context of the economic downturn, these contracts must remain in Canada.

"Economic stimulus starts with spending taxpayers' dollars on made-in-Canada
purchases," said Ms. May. "We were promised a more responsible approach from
the government but it continues to export the good jobs in return for

As if carrying on this way isn't bad enough when times are good, these people forge ahead doling out contracts worth hundreds of millions of dollars to foreign companies when we have the capacity to build these things here. Public Works Minister Christian Paradis also deserves due recognition here. He says if it costs to much to build them here, he would buy them elsewhere. Hasn't Minister Paradis heard of economic spin off? Or is that too complicated a concept? We have all heard of situations where governments, both federal and provincial allot large sums for questionable pet projects on the basis of economic spin off and not much else. Projects that haven't a hope in a warm place of making money on the strength of the project, yet they are justified by virtue of the overall benefit to surrounding communities. Well, duh!

The release above also talks briefly about the recent decision on the trucks for the Military. They don't go into much detail, but a consideration worth noting is that Trucks to be used for general purpose aren't all that difficult to build. A great number of the components are sourced from OEM manufacturers, such as International engines, and borg warner transmissions. Frames can be custom built in just about any fabrication facility worth it's salt and Cabs, wheels, electrical components etc. can also be sourced if a facility isn't set up to manufacture such things. Technical ability is no problem, and facilities abound. So Peter McKay of the Clan McKay really and truly hasn't much justification for his decisions affecting the big money. Except of course, big money.


  1. I'd dearly love to know "the relationship between Brian Mulroney, Frank Moores, Elmer McKay, Karl-Heinz Schreiber, Air Bus, Thyssen Industries, Helicopters and Military equipment in general ...", but I'm not holding my breath. Meanwhile, I’ll offer some thoughts on the military off-shore procurement that bothers you, C.O.

    A real problem we have between the Canadian Forces and Canadian industry is scale. Military equipment, from clothing to vessels, is built for different requirements than civilian versions, and it is built only in numbers to meet current and anticipated CF needs. There was a time in my service when we were running out of combat clothing because we could not find a supplier prepared to produce the number of yards of specified material the Army needed.

    Let’s consider trucks. After you find a plant that can retool and assemble the 3,000 trucks you want to buy over the next five years, what does the plant do after it has filled that contract? The CF won't need more trucks for another 25 years, and there may not be enough civilian truck demand to keep the plant going until then.

    There is little shipbuilding capacity left in Canada. Commercial vessels have been built overseas at considerable savings for decades. The last naval building program was the frigates 20-odd years ago. So now we want so many Coast Guard and naval vessels. To build them here, we would have to find a corporation that is prepared top invest big bucks in shipyard infrastructure and equipment, then hire and train a large number of shipbuilders, and all to build a limited number of vessels over a limited number of years. It can’t be done, because no serious company would be interested in sinking that kind of money into a limited proposition. In fact, the Navy should have its own shipyards to build to its own specifications, but it can't be done either because that, too, would be too expensive for our limited requirements. So, the plan to buy off-shore and go for procurement offsets in Canada does make sense. It is a realistic way of dealing with the real situation, the ideal one not being on the table because it would be unaffordable.

    Besides, the story I heard a long time ago about two parts of a frigate’s hull built in different places not fitting together may have been more than rumour.

  2. Going from memory here Herb, but I believe the US company that is to receive the contract to build the trucks, is the same company that recently built and even more recently announced closure of said truck plant in Southern Ontario. Yes/no? I could research that some more if necessary. And remember, these aren't specialized military trucks. These are for humping up and down the road here in Canada, so any operational truck plant should be able to handle this, perhaps with a few mods. If I knew the specifics on the trucks, I might even suggest that current production models might well suffice, again perhaps with a few mods. There are lots of shops, even small ones that do modifications on trucks, beginning with a rolling chassis, drive train and cab.

    Again from memory, there are 3 major shipyards in Kanata. One in Saint John N.B., one in Quebec and another in BC. I remember a recent go around about servicing the submarines purchased from GB. Our locals, the Irving group were not pleased that the Fed had decided to send subs stationed on the east coast, to BC for servicing and maintenance. Irving also built some of the Frigates in the recent past, and to my knowledge the shipyard is still completely functional.Certainly the skilled labor was still in the area until recently at least.

  3. Comrade One,

    an historical survey of shipyards in Canada from 1939-2000 updated in 2007:

    Don't think we have the capacity left. If we did, the proponents of our industrial base would insist on it being developed/used.

    With the trucks, the emphasis should be on the MILITARISED part of the "Militarised Commercial off-the-Shelf" procurement of 1,300 trucks over 18 months. Remember the Iltis that was universally condemned as a piece of crap? I spent three years with a German division that had tons of them, and their performance or maintenance was never an issue. Of course, the Germans did not "Canadianize" their Iltises (CF project management derision for improving everything not made here to bring it up to our standards, even if it no longer works) - nor have them built by Bombardier. The real crunch will come with the follow-on "Standard Military Pattern" order.

    Recalling what I saw of our "defence industrial base" and the LAV, if there were any reasonable way of building the ships and trucks in Canada, our corporate sector would have made it so. The only caveat I would have in saying so would be the profits staying in the same company, in which case the border would be immaterial.

  4. It seems to me that it would be more logical to change the military procurement system. Instead of the agony over ordering a bunch of stuff lke we do now maybe standing orders with Canadian companies would keep them going every year and keep a fresh supply of new equipment flowing into our soldiers hands.

    For example, a company in B.C. could start making icebreakers starting with smaller models at first and then building larger, more specialized ones as time goes on. If it was timed right by the time the oldest one gets near the end of its life we could sell it and replace it with new ones. This keeps a shipyard and design crews etc. going year after year no matter what the economy does and we always have the oportunity to sell offshore as well. The east coast shipyard could build other ships the same way. Surely an existing Canadian company could modify their trucks to military standards and make 50 every year as well as design special models and sell a number each year as well. every piece of military equipment could be bought under this system which would stabilize the budget as we know what the cost is each year and only need to add in special purchases. Not to mention all the research and development as well as exports.

    Military equipment purchases are one of the very few ways our government can step in to jump start our manufacturing sector and as usual the dingbats in the con. government are proving they know nothing about running an economy by making big one time purchases off shore.

    The other way they can boost the manufacturing sector is the huge vehicle fleets all levels of government have. Instead of wasting our (taxpayers) money giving it to the car companies would it not make more sense to buy up as much excess Canadian production as possible instead of leasing and let the companies sink or swim. Finally has anyone seen a government vehicle that is NOT a Ford, G.M. or Chrysler product? Honda and Toyota have been making cars in this country for years yet they get ignored when the government goes shopping. Considering they make a far superior product this makes it a double waste of my money.

    My rant for today!

  5. California has said it will be broke next month, so there are new measures being taken to preserve what little money they have left:

    "State Controller John Chiang announced today that his office would suspend tax refunds, welfare checks, student grants and other payments owed to Californians starting Feb. 1, as a result of the state's cash crisis."

    Following, Circuit City, the second-largest electronics retailer in the US filed for bankruptcy Friday, and more than 35,000 jobs will be gone, along with GE laying off 11,000 or more. Hell of an introduction for Obama!

    Why is Ukraine being such an ass and blocking the natural gas that Russia has already agreed to send through? Would it be that Ukraine's govt. is backed by the US and Israel, both of whom want to blow Iran up? This may be a clue . . .

    In case anyone had forgotten, now includes Joe Biden mentioned a "generated crisis". Obama is walking straight into a hornet's nest! From "Excuse me, General Mei Lei; if you don't know about it, how is it you have the date narrowed down like that?"

    Last but not least -- -- guess who supports Israel? Well, we voted them in, so I guess we're responsible!

  6. Hi Charles, your last link redirects. Were you trying to point to and the article that starts with "Canada complicit"?

    That one says a lot about the situation in Gaza, and our gubbermint.

  7. Herb, I can't get your link to work either. Maybe if you cut off the http// stuff and try again.

    I read some about diminished capacity a while back, particularly the state of the Quebec shipyard, but if one reads through the lines in the article I posted, it appears the Canadian Industry is very much in pursuit of those shipbuilding contracts. It indicates that Clan McKay hasn't outright said the contracts will go elsewhere, but are reserving making a commitment. Perhaps it's a negotiating tactic, perhaps not. Given that there is a huge amount of money involved in projects such as this, certainly Canadian Industry should be afforded some latitude as necessary I would think. It would also be responsible to negotiate for the best price, but based on the truck scenario, who could be optimistic as to the governments intent? That and past performance being considered.

    Back to the Trucks briefly, I remembered a venture late last night that I will use as an example. Albeit begrudgingly, because it involves my number one corporate monstar, the Irvings. Said monstars had a vision back in the late 60's to control the trucking industry in this part of Kanata and set about buying up, squeezing out competitors and employing other means to close on their goal. Among the ventures they began were Truck Sales, service and financing and they began to build their own line of trucks. The Scot truck. Or Scott,can't remember exact spelling and given the time frame there is no info available on the net. Not even references to parts availability. That's not hard to grasp as it appears the company morphed into a Truck trailer manufacturer/supplier in 1975 and they probably play down parts availability.

    About the Scot truck. It was largely a combination of what I briefly described earlier. Drivetrain purchased from OEM sources, and a collection of compatible parts combined with components they could fabricate themselves. Now to understand how this could work, one has to consider the big Irv is like a giant octopus and owns or controls a vast array of companies that deal in a great variety of products and services. This gives them a huge leg up on any venture they undertake, as their buying power and influence are extraordinary. Even their own needs for trucking/transportation of goods provided a very good base for demand for the Scot truck.

    In the end, apparently it didn't prove to satisfy their overall goals, as production ended. But, they are totally motivated by bottom line and the trucks themselves were the most basic of units. Ugly as sin too. Would have made good army trucks, rugged, plain, simple and ugly. Other than not having the bells and whistles and good looks of major manufacturers offerings, the only complaint I remember hearing was fuel efficiency. I expect whoever it was they purchased the engines from, sold them a poor fuel delivery system. Similar to what happened to Bombardier when they tried to manufacture railway locomotives. The big guys will take your money, but they don't want you in the game. Old story.

    Anyway, I think this is a subject we should all pursue more knowledge in, as it is an integral part of how governments use tax payers money and could give rise to offering constructive input to our local government representatives on how they operate. When a company like Zenn can survive without government help or co-operation and go through tooling up etc., why couldn't a better way of acquiring military trucks be found?

  8. wayupnorth @12:22 a.m.

    Some good thoughts, and thanks for your input. Collectively, we might just make some progress toward coming up with something useful.

    With Comrade Herb's knowledge of procurement, and the Government/Militaries vision of how to do business, combined with the variety of specialized and general knowledge people who participate in blog sites can offer, we may come up with some good things.

    Someone once spoke of what they didn't know and said it could fill a library. Which is true for most of us. But, libraries get filled with what people do know, and the result is a collection of that knowledge in one place.

  9. Catching up a day late -

    Comrade One,

    links do not work on this blog, so copy and paste everything incl. the www etc. into your browser. Just tried and confirmed it: the study prepared for the "Canadian Naval Defence Industrial Base (CANDIB) Project" popped up.

    Ah, the Irving Empire. When I was in N.B., I thought of the Province as the "Irving Fiefdom." Is it still, or has globalism reduced the local cartel?


    great and on-target rant, but remember that the CF tries to buy by requirement. Too much of what should be simple is skewed by secondary considerations, such as regional or industrial benefits. I know that compromise is necessary and even possible in most things, but defence is the most serious of all businesses. Here I'm puritanical to the extent that it should not even be compromised by the military itself.

  10. Herb, no change that I can see re: the fiefdom. Still firmly in their control.

    I tried copy and paste before, and no go. Here is what comes up when I try,and I'll break the line into two.

    Compare that with the actual URL and see if there is a difference.

    I'm going to try to find a solution to this format cutting off the ending of some links.

  11. C.O., no idea why it doesn't work. Pasting my link works every time, pasting your two-liner does not, but both look the same.

  12. wayupnorth: "Finally has anyone seen a government vehicle that is NOT a Ford, G.M. or Chrysler product? Honda and Toyota have been making cars in this country for years yet they get ignored when the government goes shopping. Considering they make a far superior product this makes it a double waste of my money."

    FYI Gentlemen, many of these vehicles you see that are for government use are LEASED and the Leasor gets to choose who makes them by virtue of the bidding contracts. One Leasor is G.E.Capitol Fleet Services, who have a such vast grip on this industry they will always be either #1 or #2 in the business. They will bid on the likes of Bell Canada fleets or the Provincial Gov'ts requirements as well as the Federal orders. Now having identified that, it is not unusual for a gov't to have a clause in the bidding that said vehicles be mfg within its own territory. In this case the Navistar plant in Chatham, Ont. can just as easily supply this order as their Texas plant, or Chicago, or the one in the Pacific North West. These build orders all have to have the logistics worked out for the various parts and pieces to arrive at which ever plant regardless of the location. As a matter of fact there have been occasions when Gen. Mtrs., Oshawa had Cdn and/or US Army pick up trucks going down the ass'bly line in amongst other non military units, it is all part of the computer programming and logistics designs set up by the individual Mfg Co. They also have to have the gov't military plain clothes branch procurement inspectors present to audit the process from start to finish. Our military's do reciprocal inspections for each others' countries!
    So in this case where McKay issued this purchase one could question whether there were some sort of kick backs from whom ever to benefit whom else! This might warrant a much closer investigation.
    It is also very likely that the Freightliner Sterling Plant in St. Thomas, Ont. is totally capable of producing this order. Did they get a chance to bid on it? When it comes to the quality of Navistar's commercial equipment, it is well known through out the industry they have the best warranty plan BECAUSE THEY NEED IT! Did the PACCAR Kenworth organization with plants in both Kelona, B.C and Quebec get an opportunity to bid? Their quality and durability is far superior. So much for transparency and accountability in our Federal Gov't! "I don't smell a rat but there is a distinct odor of grease online!"