Net Gain

Marusa: fact and fiction

By Michael Hammond, Record staff

As mentioned a few days ago when rumours first started to surface about the possible closure of the Marusa Marketing call centre in Cambridge, the official word is the place is not closing.

That hasn't stopped some readers from contacting me to dispute the official line from the company. As I mentioned in previous posts, we can only print what people tell us on the record. Our newspaper's policy is to not use anonymous sources, since it undercuts our credibility. However, we do use these tips as a starting point.

To read the company's statement about the Cambridge call centre, read yesterday's blog post.

The response we received to the Monday story, Call centre shifting work, denies it's about to close, certainly shows how the challenging economic conditions facing a number of industries in the region are resonating with our readers. As always, we welcome the feedback from our readers. They are sometimes our best source of information.

It must seem puzzling to readers that our Monday story was so light on details, but that is what the company told us. And, in the absence of people willing to talk to us on the record, including Marusa's parent company, which has refused further comment, we are in a situation where we have to take the company at its word.

mhammond@therecord.com

Marusa Marketing Inc. statement

By Michael Hammond, Record staff

This is the complete text of what Marusa Marketing's parent company said regarding the recent rumours surrounding the Cambridge call centre. For a related story, check out yesterday's blog posting by scrolling below.

Here's what the company said:

"Some of the Marusa Marketing Cambridge, Ontario contact centre volumes will be shifting based on client needs and we notified our Cambridge staff of this development late last week. We currently cannot offer further comment on this development due to client confidentiality. But we can state it is our intention to continue to operate the Cambridge facility by replacing the shifting work with new volumes from other clients and potential clients. In short, reports and/or rumours of a total centre closure are not accurate. We will keep our staff and the local media informed as additional developments occur. Marusa Marketing Inc. has no further public comment at this time."

mhammond@therecord.com

Marusa Marketing: Rumours of our demise...

By Michael Hammond, Record staff

Tough economic times create unique headaches for business reporters. This week's news that Marusa Marketing Inc.'s Cambridge call centre was possibly closing illustrates how difficult it is getting at the truth sometimes.

First, let's be clear. The call centre is not closing. But, here is how these situations unfold for us.

I often receive email messages from laid-off workers in these cases. Often, people ask us why we are not reporting on the closure of Company X. The short answer to this is that we often rely on workers, unions and those in the know to tell us about these closures. Reporters have their sources, but we often only find out about things from our readers.

This creates a second problem. When we receive an anonymous tip, we have to independently verify that we are getting truthful information. This requires that we talk to a company that is either laying off workers or closing a plant. If the company choses not to talk, we are hard-pressed to write a story. Case in point: both Lear Corp. and Martinrea International are reluctant to speak with the media, which makes it tough for us to report on the struggles at the Kitchener Frame and local Lear auto parts plants.

In the case of the Marusa Marketing call centre, we received a tip Friday afternoon that the call centre was going to close. Our tipster referred to remain anonymous since she wanted to protect her job, no doubt. After repeated calls and email messages to Marusa's parent company, we received a short statement Monday afternoon which hinted at layoffs, but would only say that "contact centre volumes (are) shifting."

Tips are usually the first step taken toward a story. However, we can't report tips as truth. The process takes time. In this case, had we reported that Marusa was closing its doors, we would have been wrong (This is why The Record usually doesn't use anonymous sources). The company stressed in its statement that rumours of its demise have been greatly exaggerated, to borrow a Mark Twain phrase.

We appreciate the tips and couldn't do our job without them. However, they are only the first step in an often complicated process.

mhammond@therecord.com

Stories that resonate

By Michael Hammond, Record staff

My colleagues and I often muse about which stories we write will generate the biggest response from readers. This week, I received responses to two stories that I never imagined would generate all that much response. I received some email for Thursday's story New directions for auto industry. The story I wrote was based on a presentation Anthony Pratt gave to local auto parts executives earlier this week. Pratt, a senior industry analyst with PricewaterhouseCoopers, talked about how new green automotive technology is beginning to take hold in the industry.

Essentially, he said high gas prices are begin to fuel innovation in North America at a rate never seen before.

This caught the attention of one reader, who mentioned to me there is a growing trend of people riding "electric bikes" to work. They're not quite motorcycles, she told me, and they're not quite bikes. They can go as fast as 35 kilometres per hour and don't require a licence to drive (but you have to wear a helmet). I have seen a few people riding around on these electric bikes, particularly in downtown Waterloo.

Another reader just today told me about his business, which is working on a new combustion engine that can operate either as a two-stroke or four-stroke motor, depending on your power needs. His problem, he told me, was he has the idea but needs a partner looking to fund his business (if you want to reach this guy, email me).

Finally, I received an email from a magazine editor who was asking me questions about a story I wrote back around Labour Day last September. She wanted to know about a nine-year-old entrepreneur and how he invented a fishing gizmo that caught on with a few local retailers. The story explored his adventures in learning how to operate a small business.

There seems to be one hard-and-fast rule when it comes to reader response in journalism. Most of my colleagues agree it's the unlikely stories that usually generate the biggest response.

mhammond@therecord.com

Doom, gloom and hope

By Michael Hammond, Record staff

This morning, a senior automotive industry analyst from PricewaterhouseCoopers laid out a fairly grim forecast for the coming year in the North American auto industry (For full details, read tomorrow's business section of the Waterloo Region Record).

The analyst, Anthony Pratt, was at a loss to say much about the American Axle & Manufacturing Inc. strike, which has forced hundreds of local auto parts workers out of work, since Amercan Axle's biggest customer General Motors has idled about 30 of its plants.

That was why it was interesting to see that General Motors had decided to resume truck production in Oshawa. Since Lear Corp.'s local plant produces metal components for GM truck seats, I thought it might offer some relief to workers there.

Tony Moxey, the Canadian Auto Workers Local 1524 plant chair at Lear, told me a "handful" of workers were being recalled to the plant on a week-to-week basis. All told, about 270 remain on the floor at the Manitou Drive plant in Kitchener. That's a much smaller number than the 380 people who were on the floor at the plant when the American Axle strike first began two months ago. At first, only 65 workers were let go, but that number has climbed.

Moxey told me that Lear has been forced to lay off employees gradually as the strike has continued to idle car and truck production across North America. The resumption of truck production is not going to make a big difference to Lear in the short term, Moxey said.

"It's not a huge volume of work," he said Tuesday.

The good news, if there is any, is that the demand for green cars is beginning to make its presence felt in the North American market. That was one of the central themes at the automotive innovation event. The drive for green will require automakers and parts producers to rethink how they build cars and engines. That means there will be a big demand for all sorts of new auto parts in the coming years. Those who figure this out first stand to benefit, the auto analyst told the crowd.

mhammond@therecord.com

Serial entrepreneur at it again

By Matt Walcoff, Record staff

Serial entrepreneur Jeff Fedor is adding another line to his resume. He and Terry Goertz, having completed contracts at AideRSS Inc., have launched a new company called ParkVu Inc. On his blog,  Fedor says his new company will be “working on data synchronization amongst multiple devices and users.”

Fedor was a co-founder of local high-tech start-ups Ardesic Corp. and Covarity Inc. and was one of the first employees of Terapath Inc., now known as Primal Fusion. He joined AideRSS in November as “chief whiteboard operator” and helped get the Internet-software company started on the right track. 

There have been a lot of changes at AideRSS lately. Co-founder Kevin Thomason recently left the company, weeks after the company left his house for its first real office. Carol Leaman, a distinguished entrepreneur herself, joined AideRSS as chief executive officer last month. The company is hiring for several positions.

mwalcoff@therecord.com

Two months and counting

By Michael Hammond, Record staff

Media in Detroit marked the second month of the American Axle and Manufacturing Inc. strike by noting that talks with the United Auto Workers are going nowhere fast.

The ramifications of this strike extend all the way here to Waterloo Region. The strike has shut off the axle supply for General Motors, which is American Axle's biggest customer. That has forced GM to shut down and slow production at 30 plants, including ones that local auto parts suppliers count as key customers.

There might be a glimmer of hope. GM has temporarily restarted truck production in Oshawa, which could benefit Lear Corp.'s local plant, which makes metal components for GM truck seats. However, since this is being billed by GM a temporary reprieve, it doesn't seem as though local auto parts production at Tenneco and AGS Automotive in Cambridge and Kitchener Frame is set to gear up anytime soon.

The stumbling block between American Axle and the UAW remains wages and benefits, obviously. With this issue seemingly still nowhere near being settled, pundits are at a loss to predict when this labour dispute will end. Before it started, pundits were suggesting the era of long labour disruptions was over since domestic automakers have too much at stake to risk such a problem in the supply chain.

As the American Axle strike plods along, no one seems to know what to expect. Much of the region's automotive industry, meanwhile, continues to wait on the sidelines.

mhammond@therecord.com

Politics, layoffs and second chances

By Michael Hammond, Record staff

This week's news that ClosetMaid is closing its Cambridge Stack-A-Shelf plant has tongues wagging about Waterloo Region's troubled manufacturing sector. Some of the arguments have been made before, but the rhetoric seems to be taking on another dimension.

The New Democrats' economic trade critic Paul Miller, who represents a Hamilton riding, says Waterloo Region is "sliding into a recession" while the province is just sitting idly by.

The Conservatives got in on the act at Queen's Park with Ted Chudleigh, the party's economic trade critic, accusing the Liberal government of allowing Ontario to become a "have not" province, which closely mirrors what federal Finance Minister Jim Flaherty said recently.

"Manufacturers are worried, unions are worried, investors are worried – everyone but this government is worried,” said Chudleigh. “Unfortunately, the Premier continues to sit idly by and watch as Ontario becomes a 'have-not' province."

Health Minister George Smitherman was left to fend off the attacks and pointed out that the region has recently attracted German auto parts firm Thomas Magnete. It should also be mentioned that Ford has twice announced plans to expand its presence in the province in recent weeks.

Contrast this rhetoric with what the ClosetMaid workers themselves were telling me yesterday.

Zlatimir Papuga, a 10 year veteran of the plant: "It's a global issue."

Bill Ashwell, laid off in January: "They (ClosetMaid) seemed to have done everything they could to avoid layoffs."

Ron Wolf, who left the plant in Octover: "There was no annual meeting last year and there was supposed to be one this month. A lot of these things were warning signs."

In other words, it seems as though more workers are resigned to the notion that Canada can't compete for manufacturing jobs like it did 10-20 years ago.

All three of these workers is keen on moving on. Papuga wants to pursue a government job. Wolf is looking into starting his own newspaper in Fort Frances, Ont. Ashwell is still looking for work, but has worked outside of manufacturing before.

Contrast these responses with the heated attacks on the provincial and federal government a year ago when MTD's Kitchener facility appeared destined for closure. There seems to be a sense of grim acceptance creeping into the debate.

mhammond@therecord.com

Power to the people

By Michael Hammond, Record staff

First, a sobering thought. It is estimated that our province's power system needs about $60 billion worth of infrastructure improvements in the coming years. This includes refurbishing aging nuclear reactors that are nearing the end of their usefulness.

Now, the good news. The Ontario Power Authority is giving everyday Ontarians the power to contribute to the energy grid and make some money in the process. The authority's chief executive Jan Carr spoke to a business gathering this morning in Kitchener and told them that the authority has 300 contracts in place with small groups or individuals who are generating their own electricity and feeding it back into the grid for a set amount. This year, there are nearly 70 more energy projects that will funnel power into the grid under the power authority's Standard Offer Agreement. Click here to read the text of Carr's speech.

Carr said the program is the first of its kind in North America. The timing couldn't be better from his perspective, since regions like Waterloo Region are approaching a point where their local power grids are beginning to falter amid spiralling demand for power. The word he used to describe our situation in the region was critical. Strong words. (For more on our local power problems, please read Thursday's edition of The Waterloo Region Record.)

Waterloo Region is hampered by a lack of strong winds, which rules out wind power as a local energy project, although a group in Baden feels its wind patterns will make a wind power project there feasible. Carr said solar power, energy from waste and other forms of power generation are going to play a much bigger role in local energy projects. This is where the region can likely play a bigger role. There is no shortage of environmental research happening in the region (read about this in the latest edition of Rex Magazine). As with any new industry, we are now in a position of transforming this research into a sound commercial venture. We might just save our energy grid in the process.

mhammond@therecord.com

Read between the lines on this one

By Michael Hammond, Record staff

A German company deciding to set up shop here and employ 30 people may not elicit all that much excitement at first blush, but news that Thomas Magnete is locating here (pronounced Mag-NET-ee) is about more than just a small manufacturing operation on Boxwood Drive, judging by the comments from the company's local executive yesterday.

Ed Niewinski told me that Toyota is in the company's long-term plans, which is not surprising since the German company's Boxwood Drive facility is not far from the Toyota plant in north Cambridge.

"We will certainly be in discussions with them as we develop our reputation in North America," he said yesterday.

To read today's story, click here.

Thomas Magnete's local operation will produce automotive controls (think switches, or solenoids in car-speak) for a new V6 transmission project for Chrysler. In fact, the controls will be delivered to a transmission maker, which will then, in turn, deliver the product to Chrysler.

The new Chrysler powertrain is a good example of the drive for fuel-efficient engines in Europe right now, John Tennant told me yesterday. This drive is starting to spread to North America where drivers are increasingly looking for fuel efficient cars to cut down on their expensive fuel bills.

We touched on this green trend in our latest edition of Rex Magazine. Tennant seemed to indicate that this is the way most industries are going, not just the automotive industry. The fact that these innovative new products are being made here bodes well for the regional economy, which is clearly in transition.

The company is hinting that it wants to do more in the region than just build components. Niewinski told me that being close to cutting-edge research at local universities and Conestoga College was a big reason why the German company came here.

It's almost a given that a businesses will mention the region's post-secondary institutions as reason to locate here. But, this is not a high-tech concern, per se. The fact that an auto parts maker is looking to engage in research here points to much broader change happening in the economy, Tennant said.

Tennant's job is to promote the region, of course, which includes its troubled auto parts industry. He didn't discount the changes happening in the industry, but he did remind me that there are signs of promise. It all depends on whether we choose to focus on short-term pain or long-term gain.

mhammond@therecord.com