Archive for March, 2008

When Eaton’s closed its catalogue division in 1976, the event was deemed to be so seismic that family members personally paid courtesy calls on a federal cabinet minister as well as senior aides and premiers in New Brunswick, Ontario and Manitoba to give advance notice. After all, 9,000 employees would be thrown out of work.

The Eaton “boys” as they’ve always been called, despite the fact that they were all in their thirties at the time - John Craig, Fred, Thor and George - took media training to prepare for the anticipated public outcry at the icon’s demise.

But when the announcement came on January 14, 1976 that the spring-summer edition would be the last of the catalogues begun by founder Timothy Eaton in 1884 there was instead an outpouring of nostalgia and the boys escaped blame - at least until 1997 when the department store declared bankruptcy.

All this pining for the printed word struck me as I read this morning about the end of the Canadian Tire catalogue, at least in published form. The online version will continue. There was no official announcement, no political panic. Begun in 1934, the Canadian Tire catalogue had by 1941 not only become a household companion, it had acquired a character in the form of an older gent who appeared in cover illustrations until 1969.

In my 2001 book about Canadian Tire, “Can’t Buy Me Love,” I described the Old Gent with his white hair and upturned moustache as a stand-in for co-founder A. J. Billes. The two boys with whom he was usually shown could have been his sons Fred and David, and the blonde, daughter Martha. To be sure, the real-life mischievous Martha had red hair but on the covers she was always more assertive than her brothers who were portrayed as too heavy for light work and too light for heavy work. As we all know, Martha beat out Fred and David to become controlling shareholder and even now is passing along ownership to her adopted son, Owen, 38.

Unlike the late and oft-lamented Eaton’s, Canadian Tire has prospered against the onslaught of American retailers. How the Tire catalogue morphed into a new format in the digital age is just another example of survival that some family businesses never learn.

Still, I do miss the Old Gent.

Easter celebrations in Florence reach a crescendo on Sunday at the Duomo. Beginning at 10 a.m. there is a procession along Via Roma of celebrants in medieval costumes that includes drummers, trumpeters and flag-tossers as well as official representatives from the police, church and city. What makes this parade different from the many others throughout the year is the carro, a huge wooden cart that’s about ten meters high and looks Oriental in design. The cart, which is loaded with fireworks, was pulled in the past by two white oxen. In recent years, all the hard work to position the cart strategically between the Baptistery and the Duomo has been done by a farm tractor.

As we watch proceedings from our rooftop terrace high above the crush of the crowd, we drink glasses of bellini and listen to the bells of Giotto’s Campanile. According to legend, this ceremony of the exploding cart celebrates the exploits of Pazzino de’ Pazzi, an eleventh-century Florentine warrior from the First Crusade. As the first man to climb the walls of Jericho he was awarded two pieces of stone from the Holy Sepulcher, the shards of which are still used to start a fire that is carried through the streets to light the fireworks. If all goes well everyone will enjoy good luck and good crops this year.

At precisely 11 a.m., accompanied by more pealing of bells, inside the church the archbishop lights a dove-shaped rocket, the colombina, which is sent flying on a wire out through the church door where it ignites the fireworks on the cart, then immediately turns around and scoots back inside. For the next ten minutes, roman candles, katy wheels, various rockets and screamers bang and howl in red, green, yellow, and blue, soaring as high as the top of the church facade while shimmering silver confetti falls above the heads of the delighted crowd. Small boys wonder why church isn’t like this every week as the good luck flows all around.

Thank goodness Industry Minister Jim Prentice is taking an extra month to consider the sale of MacDonald Dettwiler and Associates Ltd. (MDA) to foreign interests. At the end of his consideration, he must reject the transaction.

Canada has too few global brands. In our more than 140 years as a nation, you can count on one hand the Canadian manufacturing firms known around the world: Massey-Ferguson (long gone), Bata, Nortel (for a time), Bombardier and Research in Motion. MDA belongs among the celebrated because of Canadarm, Canada’s contribution to the International Space Station, as well as Radarsat-2, an observation satellite. The prospective owner, Alliant Techsystems Inc., a Minnesota-based munitions maker, is unlikely to honor the heritage.

MDA shareholders have voted 99.9 per cent to sell; shareholders always do. But in Canada’s mixed economy, where private and public sectors create together, there are other owners. Taxpayers have contributed $500 million to the success of Radarsat and MDA. Doesn’t that give all of us a vote?

The Conference Board of Canada recently produced a study claiming that foreign takeovers don’t matter, there is no hollowing out of Canada. This conclusion, following the loss of our entire steel industry last year - just the most recent asset grabs after decades of denuding - has been challenged by Dominic D’Alessandro, president and CEO of Manulife Financial, himself a $15-billion buyer of a U.S. giant, John Hancock Financial Services. “There’s something wrong when you have too few leaders,” said D’Alessandro. “Every country needs its heroes, and I think Canadians are poorly served by the point of view that says, ‘It doesn’t matter.’”

Minister Prentice, here’s your chance to be a hero.

Never in my thirty years as a business writer have I seen so many scary stories following one upon the other. JP Morgan’s offer to buy Bear Stearns may lance that particular boil but there remains a toxic waste of acronym debt that until recently few knew about but far too many held.

Some of those deadly instruments were peddled by the very investment banks that are now threatening to bring down other houses. The investments, which today seem ludicrous, were touted by the wounded right until the moment they reared up and snakebit their creators. I asked the wisest man I know on Bay Street why firms would sell such stuff they knew to be beyond risky. “After all,” he said, “they are vultures.”

With the savings and loans scandal of 1989, fraud was involved, and Charles Keating went to jail. When Confederation Life was seized in 1994, it was a one-off, there were no industry repercussions and investors were made whole. Rogue traders such as Nick Leeson might bankrupt Barings but the damage was usually contained.

This time around, the very interconnections that made the instruments possible are causing unpredictable outcomes. Central bankers are acting in bold new ways that may not work but certainly underscore the severity of the situation. Interesting that the Federal Reserve gave JP Morgan 28 days, as if they operated on a lunar calendar, to fix this particular lunacy.

Everyone from billionaires such as Joseph Lewis to ordinary folks have been felled. A BBC report on the weekend showed people who lost their homes in California now living in tents, a scene right out of the Dirty Thirties.

In Canada we sit smugly, hoping record oil and commodity prices will somehow guard us from the growing onslaught. But save us they will not. No one knows how long this maelstrom will last or from whence the next bogeyman will come. As Bette Davis said in All About Eve, “Fasten your seatbelts, it’s going to be a bumpy night!” And a long one.

March is a glorious month in Italy. The warm weather arrives; temperatures moderate from winter’ss chill to the mid-teens Celsius. Buds begin to burst; shop owners stuff sidewalk pots with flowers.

We visit Lombardy to pay homage to two sixteenth century women. In Parma there’s Giovanna da Piacenza, a Benedictine abbess who discovered Antonio Allegri, the painter later known as Correggio. He created a gazebo in Giovanna’s bedroom, Camera di San Paolo, by painting the thin ribs of the domed ceiling to look like bamboo surrounded by fruit, putti, and allegorical panels.

The other leader is Isabella d’Este, wife of Francesco Gonzaga, Marquis of Mantova, known as la prima donna del mondo, the first woman of the world. Among those who visited her 500-room Palazzo Ducale was Leonardo da Vinci; he painted her portrait and advised on some vases she’d acquired. With the help of her refined taste and knowledgeable eye, the Gonzaga family built the world’s largest art museum consisting of two thousand paintings - including thirty-six Titians - as well as twenty thousand sculptures.

In those days, many courts kept a midget or two for a bit of ribald fun. The Gonzaga line loved midgets. A midget appears in a fresco by Andrea Mantegna, done for what became the Camera degli Sposi (Wedding Chamber) of Isabella and Francesco. What started out as a few midgets grew to such a number that an apartment, appropriate to their diminutive size, was built for them in the palace. Today, their lodgings are not open to tourists, but you can peer through a doorway covered by an iron gate to get an idea of the lavish life led by the little people and the high honor in which they were held.

Andrew Ross Sorkin has an excellent piece in today’s New York Times about Edgar Bronfman Jr. that expands upon the themes in my recent post and adds some other thoughtful comments about everyone’s favorite corporate pinata.