Wednesday, December 3, 2008

The CAW is completely out of sync with the global labour movement

Thanks to people liek Jim Stanford, the CAW is completely out of sync with the global labour movement, since the CAW favours private equity to public ownership

By blindly opposing income trusts, people like Jim Stanford of the CAW were willing accomplices in these kinds of outcomes below concerning BCE. The CAW is completely out of sync with the global labour movement. As an income trust, Ottawa would have collected $800 million more a year in taxes from BCE, 2500 people would not have been fired, Canada’s largest telco would not be junk bond basket, and the following consequences would not have occurred:

Private equity debt equation no longer adds up for Canadian Telecoms Group

- Labour news from UNI global union - for trade unions in a global services economy. -
Auditors declare a private equity deal that will load 92% of the price tag in debt onto Canadian telecoms group BCE (owner of Bell Canada) would endanger the company. UNI Global Union has been advocating against such high levels of debt leverage for the past two years. The buyout consortium including Providence Equity Partners, Madison Dearborn and Ontario teachers’ pension fund will be unlikely to close the deal with the release of KPMG’s report to the company.
“BCE’s four successive quarters of poor sales have hit profits and hampered the companies ability to pay back the debt that is due to be placed in its books.” The Guardian , 27 November 2008
The days when private equity could buy at close to 100% debt are over. The inability of banks to issue the high level of debt, due to the poor credit markets will hamper future deals. However in the case of the BCE proposed buyout, two of the biggest victims of the credit crisis are backing the deal- Royal Bank of Scotland and Citigroup. It is this sort of irresponsible investment activity by private equity and some banks that UNI believes should be regulated.
Many analysts currently claim that private equity deals that have this sort of leverage are now in danger of defaulting on interest payments. UNI Global Unions wants private equity managers to reveal their plan for unstable portfolio companies. What will happen to the workers employed in these companies? UNI will be arranging delegations to major private equity firms to put these questions directly to senior portfolio managers.

1 comment:

Anonymous said...

Obviously, if those that rape and pillage the country's tax base, jobs, and businesses are "workers" like the Teachers, it is OK in his view.

Perhaps they will support Conrad Black once he gets out, because he will be an ex-con.