More government money for Linamar

Is there any economy left that doesn't only exist due to government bailouts. Peacenik is all in favour of government intervention in and support of the economy. But Peacenik thinks there is good intervention and bad intervention.

Banks and Wall St. who have committed fraud should have the proceeds of their fraud confiscated. All those big bonuses. Take them back. And the criminals should go to jail. But what about the autoparts industry. What about Linamar. After the cash for clunkers ended, auto sales have crashed to the lowest level since 1981. What autos is Linamar going to be making parts for? Who is supposed to buy those autos?

Linamar got $44.5 million in 2006. And yesterday Linamar got $54.8 million as part of Harper's re-election strategy. Maybe it is time to start planning a new economy. A no-growth economy. Maybe it is time to invest in the future, not in the modern equivalent of buggy whips. Peacenik sees this all ending badly. Very badly. When Linamar inevitably downsizes to match the size of the real auto industry, or what is left of it, what is going to happen to all the mortgages that former Linamar employees will no longer be able to afford. Peacenik can hear the air leaking out of Guelph's real estate bubble as Peacenik types.

glayson@guelphmercury.com

GUELPH — Prime Minister Stephen Harper brought along quite the house warming gift Monday when he attended the grand opening of the Frank Hasenfratz Centre of Excellence in Manufacturing at Linamar Corporation.

Harper announced Linamar would receive from the government a $54.8 million repayable interest-free contribution to fund the development of the company’s green and fuel efficient powertrain projects.

The funding was made possible through the Automotive Initiative Fund, which will provide $250 million over five years to auto-related companies in support of strategic, large-scale research and development projects.

Read on...

Part deux

Yes, as Peacenik drives, and walks, and jogs, and bikes around the streets of Guelph, Peacenik sees lots of sold signs on houses. Some houses seem to sell very fast. Is the real estate market in Guelph in good health? At a glance it appears to be. But what happens to all the happy homeowners when interest rates go up a percent or two? What happens if a two spouse income becomes a one spouse income? What happens when its time to renew your mortgage?

Garth think a new bubble is being pumped up. No document loans. 100% financing. The government is so desperate to avoid reality that they are encouraging the same reckless behaviour that got us to the edge of the finanical abyss. How are all the out of work auto supply employees, and out of work Chrysler and GM employees paying their mortgages? With unemployment insurance? With credit cards? Peacenik says this housing bubble is leaking air....at a terminal rate. phzzzzzzzzzzzzzzzzzzzzzzzzzzzz

Part deux

by Garth Turner

Is this blog a fraud? A brave anonymous poster suggested as much a day or two ago. People were “duped” into coming, he said, expecting the dirt on a real estate crash that never came. Obviously the guy is a wannabe vulture, hot to pick on the bones of the previous greater fool.

So, what happened to the bust?

The latest realtor numbers, trumpeted from its deathbed by the MSM, are sizzling. May prices hit the highest point in history – an average of $319,700, which means prices have rebounded by 16% in the last five months. Of course, the average number is inflated by sales activity in some of the country’s pricier markets, including a big condo dump in the Lower Mainland. A more meaningful median price was not provided.

Read on...

March 3, 2009: Sometimes I sit up in the darkness

Ilargi: President Obama must be starting to sweat, maybe hyperventilate and perhaps even panic. In a move that is prone to kill a political career if it turns out wrong (and it will), he suggested today that this may be a good time for Americans to buy stocks. Now, I don't care if he really thinks that or not, the fact remains that it's a highly risky and volatile thing for a politician to say. It feels like he's moving ever closer into W territory, it sounds like something that Bush 43 would have said, like when 8 years ago he urged Americans to go out and buy a home. Where's the difference?

President Obama also insisted that he's convinced the economy will rebound. And while there will of course be some kind of bounce somewhere down the road, no matter how small, what exactly will be the good that comes from it when it happens with the Dow at 1000? I know, that's probably not what the president thinks. Or hopes for.

Read on...

Peacenik contemplated the state of the present on the bus trip to work this morning. It screamed normal. Peacenik went to the Borealis, a new, upscale, southend restaurant, for dinner on Saturday. It was full. The local pub, the Wooly, continues to be busy. Peacenik got tickets to a soldout concert at Folkway Music for Friday. There doesn't seem to be an increase in the number of street people on the streets of Guelph. The grocery store and Canadian Tire seemed busy. BCE showed some confidence in the mall-based economy and bought the Source. The city of Guelph reached a tentative agreement with its outside and library workers. Punditman continues to work hard and play hard. Life seems good.

But. But there are some signs of a disturbance in the state of the present. There are a lot of real estate listings in the Guelph Mercury. The Kitchener employment insurance office is apparently very busy. There are no wait times in the ski lift lines at Chicopee Mountain. There seems to be a paper towel and toilet paper price war going on in the local grocery stores. GM sales were down more than 50%. The median price of a house in Detroit is $7500. Can southwestern Ontario become like upstate Michigan? Can Guelph become Detroit? The Toronto Star this morning front paged a story about 1500 Canadian steelworkers losing their jobs.

Then Peacenik turned Peacenik's thoughts to Ilargi. Ah, Ilargi. The name that strikes fear into sentinent humans. Ilargi, the scary one. If your state of mind is dependent on psychotropic drugs, or if you are in a fragile state of mind, or if you are fearful of tomorrow, do not follow the link. Do not read Ilargil. Life seems good. But after reading Ilargi, Peacenik wonders how much longer life will seem so good.

Layoffs a complete surprise at Hitachi

Hitachi Construction Truck Manufacturing Ltd. trims workforce by 58 in response to economic downturn

January 13, 2009
Rob O'Flanagan
Mercury Staff

GUELPH

Late last year, Guelph-based Hitachi Construction Truck Manufacturing Ltd. was gearing up to expand its business, company and union officials said yesterday.

What a difference a few months makes.

The manufacturer of large-scale heavy equipment confirmed yesterday it is laying off 58 workers. The move is a direct outcome of the global reduction in accessibility to credit and slumping commodity prices, company chief executive Walter Fox said in an interview. The majority of the company's sales are outside North America.

Read on...

Stories like this make the hair on the back of Peacenik's neck stand on end. They strike too close to home. How many more hits can the Guelph economy take before there are widespread consequences? If the auto industry isn't making a comeback, will Southwestern Ontario get hollowed out just like Michigan? That's the Michigan where houses are now selling for less than a hundred dollars. And there still aren't buyers. Guelph and Southwestern Ontario need a plan now. Peacenik hasn't seen one.