Thoughts and Opinions On Today's Important Issues

Thursday, March 18, 2010

Canada Wants Matty's Bridge, AND At A Cheap Price

Why not just be honest and admit it already.

Why do we have to have so much drama that has destroyed Windsor over the last 8 years and which may last another decade as lawsuits play out? We could have avoided the worst of the near Depression if the Governments and Moroun had worked out their differences years ago.

In reality, unaccountable bureaucrats using an endless supply of taxpayer money thought they could crush a business person who made the Forbes list by using his money and with him taking the business risks. They just did not understand him and his family, like ships passing in the night.

Man oh man. The Windsor Star's story today was a real knee-slapper. I almost spilled my coffee from laughing so hard
  • "Windsor's Ambassador Bridge losing value, expert says"

Does anyone with half a brain think that the comments of some "expert" will influence Moroun? If it is such a disaster, then why did Prime Minister Harper issue a secret mandate letter over X-mas to buy the bridge?

Lord, we are back to a coffee discussion I had with an Ottawa bureaucrat years ago who explained to me in all seriousness that Moroun would sell out because he knew that Government could destroy the value of his bridge. According to this theory, Moroun would beg the Government to buy him out!

The 2 1/2 page spread in the Globe and Mail made a mockery of that bureaucratic theory. It's too bad that Peter Samuel had not read this history before he made his comments in the Star story

  • "For that reason, it makes sense for Moroun -- recently rated by Forbes as the 556th richest man in the world -- to sell the bridge, he said.

    "He is a businessman -- and obviously a very smart businessman. He might say 'let's talk,'" Samuel said.

    He said that once the DRIC bridge is built, Windsor could ban transport trucks from Huron Church Road, cutting off a major source of Moroun's revenue.

    "He's got to seriously think Windsor or the province might do something like that once the new bridge gets built. If he wants to get some value then he has to consider selling."

I am right after all and have been for a long time.

The DRIC road, Bill C-3 in which the Bridge Co was the only target, the anti-demolition by-law and Heritage action, the Schwartz Report and DRIC itself amongst other actions were nothing more than scare tactics to accomplish a purpose. Was DRTP? Who knows but it has now morphed into the doublestack rail tunnel which also would take away business from the Bridge and has now re-appeared co-incidentally.

The secret mandate letter was the proof to me that the Government's tactics did not work. The fact that it was Canwest who disclosed it was the icing on the cake. Its Chair must be hanging his head in shame.

To me, Matty cannot sell out cheaply. How can he? Wilbur Smith in its MDOT refresher has now said how huge the traffic volumes are going to be in the future (Mind you, their number is 10% less than the DRIC number only a short time before so all of their numbers are suspect anyway) Why should he give up that revenue value?

If he did not sell out in 2007, at the supposed height of the market, why would he sell at its bottom? The DRIC bridge may never be needed until 2035-2040 so until then, he is the only show in town. He is NOT like Canada or Ontario who must consider selling assets at any price to pay down their huge deficits. Moreover, he knows that if HE offers to sell to Canada then Canada is off the hook with the US re the Dubai ports issue. That is worth $$$ too from a political perspective for Canada.

Have you ever seen such news coverage of truck volume numbers increasing? I guess that was to convince the Michigan Legisaltors that there is a need for DRIC (even though the comparable 1999 numbers are much higher). However, it is a two-edged sword. It just makes Matty's bridge more valuable as traffic grows.

As Transort Canada's Mark Butler stated:

  • "Butler said the Canadian government is committed to the building a new bridge to provide additional capacity for an anticipated growth in border traffic."

That has to be worth an extra billion or two in itself. How can Transport Canada be wrong?

I am so glad that so many believe the value has decreased. That's in the interest of P3 operators isn't it!

Why wouldn't P3 operators want a cheap price? means that THEY make all of the future profits, not the Government. Moreover, if they know that Moroun is NOT their competitor, then they might even have an interest. Otherwise, without Government guarantees, do you think they can compete with tolls 3 or 4 times higher?

  • "And every day Moroun waits to sell, the value shrinks, he said. "If he would have sold in 2007, he would have got a higher price than now," Chase said. "Traffic and toll revenues were higher. Infrastructure investors could also borrow more money back then."

That also means that no P3 operator with the economic meltdown can afford to invest in a bridge that is supposedly losing traffic and revenue and has a smart competitor like Moroun. Even the Blue Water Bridge cannot compete with him around. Edgar (aka Eddie) could not find a financial source for the Tunnel deal.

Why then does Canada want to buy into this bridge when at the same time the Minister of Finance seemingly wants to get rid the Blue Water Bridge. Strange eh! Something stinks!

Wow, Mr. Chase's and Mr. Samuel's numbers come in so closely to those supposedly of Canada as disclosed in the stories that were reported with former Michigan Governor Blanchard telling us about the negotiations. Obviously, Matty will listen to them it would seem. NOT!

Does anyone really think that a headline and a story in a newpaper that is anti-Moroun and which is about to be sold because its parent company is in financial problems will cause one minute of distress in the Bridge Company offices? On the contrary, the price has just escalated even more IF the bridge was ever for sale and I doubt that it is!

Haven't the bureaucrats ever been taught how to negotiate a purchase? It is NOT done through the mainstream media. Today's Trucking maybe, but not the Star.

It just makes it so clear that Canada desperately wants the bridge and more importantly that it has failed once again in its mission.

I warned Stephen about that so many times in the past. I warned him that his negotiating position was diminishing and that he was backing himself into a corner.

Stephen just does not get it. He did not understand it when the new US Ambassador to Canada was appointed and he made a point of saying in his Senate Foreign Relations hearing:

  • "As I sit here today, I cannot help but think back to a family vacation I took when I was seven years old. We were going to leave the country for the first time. My parents, my two sisters, and I packed up our blue Buick to drive from Chicago to Niagara Falls. Our route took us to Detroit and we drove over the Ambassador Bridge. Despite my mother’s protestations that he would get us all killed, my father stopped the car in the middle of the bridge at the border. I will never forget my parents reaching from the front seat in Canada back into the United States and my sisters and I reaching forward into Canada. If anyone had said to that seven year old in the middle of that back seat on the Ambassador Bridge that some day he would be appearing before this great Committee as the nominee of the President to be Ambassador to Canada, I can assure you that he would not have believed it."

A nice, homey touch wasn't it but obviously, in the circumstances that he was getting into, a message to the Government of Canada that he understood the border file. He would not have been allowed to make that comment without specific approval from President Obama. He clearly had been briefed on the US Government's position in case the Senators asked a question. He was not going to be blind-sided as he was in the CTV interview.

Stephen should have understood that Matty is the biggest friend to trade between Canada and the US, not just for his bridge traffic but for his trucking and distribution business.

Stephen should have followed my advice and worked with Matty for the future of border traffic, not against him. Is it too late now for Stephen? Only Matty can answer that!