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Alcan buyout called "economic suicide" for Canada



Lynn Moore, CanWest News Service


Published: Saturday, July 14, 2007

MONTREAL -- The proposed acquisition of Alcan Inc. by the London- and Melbourne, Australia-based Rio Tinto Group is a symptom of "economic suicide" underway in this country, Montreal billionaire and shareholder activist Stephen Jarislowsky said Friday.


Others use less dramatic language as they engage in the hollowing-out-of-corporate-Canada debate but admit to growing concern over deals such as Rio Tinto's friendly $38.1-billion US bid for Alcan.


The Montreal-based aluminum producer is the 10th company on the TSX 60 to be taken over, or poised to be taken over, by a foreign company in the past three years, Jarislowsky noted.



Foreign takeovers are fuelling the Canadian dollar, which is "going through the roof" and contributing to the woes of Canada's exporting and manufacturing companies, he said.


"I think the Canadian government is wrong to let any of the 60 biggest companies get taken over by foreigners," said the founder and chairman of Jarislowsky Fraser Ltd., which manages $60 billion in assets.


The Conservative government's appointment of a panel to asses Canada's competition policy and foreign investment is akin to closing the barn door after the best horses have run away, Jarislowsky said.


"Only the stupid horses are left," along with banks and companies that, for regulatory reasons, can't leave, he said.


Ken Wong, an associate professor at Queen's University's business school, said there are few takers for unprofitable, poorly-run businesses, so it's not surprising the best companies are being bought.


But while businesses are looking out for their own interests, someone should be considering the national good, particularly when resources or resource-dependent companies are concerned, he said.


"I would be looking for certain signs that tell me that the merger or acquisition will be good for the country, not just the company" or shareholders, Wong said.


Ottawa should ensure the long-term stewardship of resources is factored into the equation so that lost resources can be tabulated in much the same way lost jobs have been, he said.


The Rio Tinto offer, unveiled Thursday, would see Rio Tinto Alcan with a head office in Montreal but its chief executive officer would report to Rio Tinto's CEO. Rio Tinto currently has its key aluminum and aluminum-related assets and offices in Australia.


Rio Tinto Alcan would be "the new hub" of Rio's aluminum business, although investment in Australia "would not be diminished," Rio Tinto CEO Tom Albanese said at Thursday's press conference in Montreal. There would be some ebb and flow of employees between Montreal and Brisbane, Australia, but the employment levels in Montreal would remain as high, if not higher, he added.


Descriptions like that make Concordia University finance professor Lawrence Kryzanowski uneasy because they remind him of what was said as Montreal head offices moved west when the separatist movement was gaining strength in Quebec.


"It is clear when a company moves a head office; less clear is when a company moves key functions out," he said. "Smart companies will do that over time."


The Royal Bank of Canada, for example, contends that it maintains a head office in Montreal but its corporate headquarters is in Toronto.


"You can say you still have the head office here in Montreal but (what matters) is where the head office work is carried out. I would expect of lot of that to happen" with Rio Tinto Alcan, Kryzanowski said.


Alcan "probably arranged the best deal for shareholders ... and Montreal," given the circumstances, Kryzanowski, an Alcan shareholder, said.


The Rio Tinto Alcan office in Montreal "will be a divisional office at best," Jarislowsky said.


One thing that helped tie Alcan to Canada were agreements between it and the governments of B.C. and Quebec that were linked to long-term, low-cost energy supplies for the aluminum producer, Kryzanowski said.


"If it wasn't for the agreements they had in both Quebec and B.C., I think the head office would probably move," he said.


The Quebec deal, signed last December just before Alcan announced a $1.8-billion US investment in the Saguaenay, requires that Alcan maintain in Quebec "substantive operational, financial and strategic activities and headquarters ... at levels which are substantially similar to those of Alcan" at the signing of the agreement.


Now it's up to Quebec and other interested parties to "be vigilant" and ensure that the deal is honoured, Kryzanowski said.


Quebec will have to decide how best to measure Rio Tinto Alcan's presence in Quebec, based on what it most values, be it payroll numbers, new products

development or research-and-development money spent, Wong said.


Montreal Gazette


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  • 3 months later...
  • Administrator

Bon ça commence le chantage...



Rio Tinto Alcan warns Ottawa


Introducing tough emissions rules could prompt aluminum giant to go offshore




October 26, 2007


MONTREAL -- Rio Tinto Alcan, the world's largest aluminum producer, warned yesterday it would consider moving production offshore if Ottawa opts to impose absolute reductions on greenhouse gas emissions.


At an event marking the birth of the new company created by Rio Tinto PLC's $38.1-billion (U.S.) takeover of Montreal's Alcan Inc., Dick Evans said regulations mandating overall emissions could have a devastating impact on its Canadian operations.


"If you look at absolute reductions as a solution, the likely consequence is that you will drive the growth of aluminum production offshore potentially to other jurisdictions that do not have the same environmental standards and do not have the same commitments to greenhouse gas reduction. Therefore the unintended consequences of ill-conceived legislation or controls could very well be to worsen the situation rather than improve," said Mr. Evans, the former Alcan chief executive officer who has been tapped to run the new unit of the British mining heavyweight.


The current Conservative minority government favours a so-called intensity-based carbon regime, whereby companies are allowed to increase emissions as production rises. Opposition parties, however, have recommended moving to an "absolute" regime, with harder emission limits.

Print Edition - Section Front


sectionB-188.jpg Enlarge Image



The executive favours reducing emissions on an "intensity" basis - measured by carbon emissions per unit of aluminum produced - rather than a cut in the overall amount of greenhouse gases produced.


In 2006, Alcan's worldwide operations emitted 20 million tonnes of greenhouse gases directly from its smelters and a further 11.6 million tonnes from other sources. A total of 4.3 million tonnes of the emissions came from its wholly-owned Canadian operations. The company has committed to a 10-per-cent overall reduction in the intensity of its emissions on a per unit basis by 2010.


Demand for aluminum used in vehicles, electricity transmission and building supplies is on the rise, said Mr. Evans, the Rio Tinto Alcan CEO. Alcan's new smelting technology dubbed "AP" is currently the most environmentally friendly way to produce the metal.


Last year, the company committed almost $600-million towards a pilot project using state-of-the-art AP50 smelting technology in the Saguenay Lac Saint-Jean region in Quebec. Run on hydroelectric power operations owned by Alcan, the new smelter promises to produce more aluminum with less electricity than traditional smelters. The company also wants to modernize its Kitimat operations in Northern B.C. with AP technology that would reduce emissions from 1.3 million tonnes to 800,000 tonnes, but the plan has been stymied so far by regulatory delays and local opposition.


"Our track record in reducing green house emissions on an intensity basis is outstanding ... So having the most efficient greenhouse-gas-emitting smelters worldwide is the best impact for the world," he said.


Some leaders, including many provincial premiers such as Ontario's Dalton McGuinty and Quebec's Jean Charest, have called for a so-called "cap-and-trade" system. If adopted, the measure would see hard limits placed on the amount of greenhouse gas individual polluters could emit. Companies that exceed the limits would pay a fee to those that come in under their limits - essentially trading cash for credits earned by their competitors.


Rio Tinto CEO Tom Albanese said he strongly supports Mr. Evans's call for intensity reductions rather than hard caps on emissions.


"The fact of the matter is you have two billion people between China, India and the rest of the world that want to live just like you do. They want to have an urbanized middle-class life. They want to have access to broadband, they want to have access to cellular phones, they want to have access to things that use aluminum. That demand is going to be met by supply.


"We are better positioned to try and match that supply with leading practices as opposed to someone who may not be so sensitized to that carbon envelope," he said.

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nous avons un choix à faire en tant que société. Soit que nous protégons l'environnement et que nous perdons un grosse compagnie avec des milliers de jobs ou que nous faisons plaisir à Alcan et y allant un peu plus "mollo" avec les restrictions!


Quel choix allons nous faire?

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nous avons un choix à faire en tant que société. Soit que nous protégons l'environnement et que nous perdons un grosse compagnie avec des milliers de jobs ou que nous faisons plaisir à Alcan et y allant un peu plus "mollo" avec les restrictions!


Quel choix allons nous faire?


À quoi bon protéger Alcan et les milliers de job si dans 25 ans il n'y aura plus d'Alcan à protéger ni de jobs à sauver puisque la terre sera rendue inhabitable ?

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nous avons un choix à faire en tant que société. Soit que nous protégons l'environnement et que nous perdons un grosse compagnie avec des milliers de jobs ou que nous faisons plaisir à Alcan et y allant un peu plus "mollo" avec les restrictions!


Quel choix allons nous faire?


Alcan va s'installer là ou l'électricité ne sera pas chère. Les restrictions environnementales sont secondaires.

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  • 2 months later...
  • Administrator

Jean Charest s'inquiète de l'avenir d'Alcan



21 janvier 2008 - 06h29

La Presse

Tommy Chouinard





Jean Charest poursuit sa tournée en Europe. Vendredi, il a rencontré le premier ministre francais, Francois Fillon.


Le premier ministre Jean Charest est préoccupé par l'achat possible du groupe minier britannique et nouveau propriétaire d'Alcan, Rio Tinto, qui fait l'objet de convoitises de la part de sa rivale BHP.


Il veut éviter qu'une éventuelle transaction remette en question la présence à Montréal du siège social d'Alcan ou mène à des suppressions d'emplois au Québec.


Jean Charest rencontrera cette semaine le président du conseil d'administration de Rio Tinto, Paul Skinner, afin de s'assurer que les engagements que la compagnie a pris envers le Québec en achetant Alcan soient respectés, peu importe ce qu'il adviendra.


«Je vais lui rappeler les obligations qui sont contenues dans la convention de continuité. Il faut que tout le monde sache que ces obligations doivent être respectées», a affirmé M. Charest au cours d'un entretien accordé à La Presse, dimanche.





Selon la convention de continuité conclue entre Alcan et le gouvernement, le siège social de la compagnie doit demeurer à Montréal et un plancher d'emplois doit être respecté.


Si ces promesses ne sont pas tenues, Québec pourrait priver Alcan d'électricité à tarif préférentiel. Le producteur d'aluminium pourrait également faire une croix sur des blocs d'énergie supplémentaires.


Mais cette convention pourrait ne pas survivre à une autre transaction, estiment des analystes. L'australo-britannique BHP cherche présentement à s'emparer de Rio Tinto, le nouveau propriétaire d'Alcan.




Jean Charest a décidé de planifier une rencontre avec Paul Skinner cette semaine lors de son passage à Londres, deuxième escale de la mission européenne du premier ministre.


Aujourd'hui (lundi) et demain (mardi), M. Charest aura des entretiens privés avec plusieurs gens d'affaires. Il doit également prononcer une allocation devant la Chambre de commerce canado-britannique.


Il fera la promotion d'un traité de libre-échange entre le Canada et l'Union européenne, comme il l'avait fait à Paris la semaine dernière.


Mercredi, Jean Charest se rendra au Forum économique mondial de Davos, en Suisse. Cet événement réunit des chefs d'État et des dirigeants des plus importantes compagnies de la planète.


Jean Charest participera à deux ateliers, dont l'un ayant pour thème «Mondialisation = homogénéisation culturelle?» et qui réunira notamment le PDG de Burger King, John W. Chidsey, le chanteur Peter Gabriel et le maire de Londres, Ken Livingston.


Forum de Davos


Le Forum de Davos est également l'occasion pour le premier ministre de rencontrer quelques représentants politiques.


Il aura des entretiens avec le gouverneur de l'État de Mexico, Enrique Pena Nieto, celui du Nuevo Leon, José Natividad Gonzales Paras, le ministre-président de la Flandre, Kris Peeters, et le gouverneur de l'État du New Jersey, Jon Corzine.



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