Kellogg's closing plant in London Ontario

[logicalview]

Ontario seems to be under siege right now, as plants are closing left and right. The radical leftists will of course blame free trade, Harper, global warming, you name it, but there's one main culprit here and it's the same culprit that caused huge recessions in Portugal and Spain - stupidly high electricity rates, all caused by bad government policy moving towards a "green economy". The Ontario government has committed billions of taxpayer dollars to the horrible wind power and solar, and now has some of the highest electricity/energy costs in the country - http://www.journalofcommerce.com/articl ... lectricity

This horrible policy is the single most reason to blame for these plants closing. How the foolish bureaucrats and idiotic Liberal government in Ontario couldn't see this coming is just mind boggling....

http://www.canoe.ca/Canoe/Money/News/20 ... 27081.html

If Premier Kathleen Wynne can’t come up with a strategy before Christmas, she is welcome to steal the Conservative platform, Hudak said.

Wynne brushed off the offer to extend the sitting of the legislature and said the minister of training, colleges and universities is closely monitoring the situation and will be ready to assist the workers.

She defended the Liberal government’s jobs strategy and attacked Hudak’s calls for right-to-work legislation that will make union membership and dues voluntary.

“That will provoke a race to the bottom. We’re not going there,” Wynne said.

You aren't in a "race to the bottom" Madame Premier. Your government's foolish energy policies have caused a freefall to the bottom.

[GordonH]

The cuts are part of an overall restructuring by Kellogg’s to streamline their operations by 2018.

http://www.thestar.com/business/2013/12 ... _lost.html
http://london.ctvnews.ca/kellogg-s-to-c ... -1.1582862
http://www.theglobeandmail.com/report-o ... e15840106/

[Captain Awesome]

What will I do without my Special K?

[grammafreddy]

And I only buy the corn flakes with the rooster on the box. Cripes! Save my rooster!!!!

[Captain Awesome]

Silly Grandma. Roosters are for kids.

[GrooveTunes]

stupidly high electricity rates, all caused by bad government policy moving towards a "green economy"

Really? I've read many articles on the closure. Where does it say that?

[Atomoa]

The radical leftists will of course blame free trade, Harper, global warming, you name it, but there's one main culprit here and it's the same culprit that caused huge recessions in Portugal and Spain - stupidly high electricity rates, all caused by bad government policy moving towards a "green economy"

BC electricity rates are going up 28% in a few years, thanks to the BC Liberals - but these liberals are good because they are right wing Liberals of course.

Not one mention of Globalization, lol.

[logicalview]

BC electricity rates are going up 28% in a few years, thanks to the BC Liberals - but these liberals are good because they are right wing Liberals of course.

As far as I know the Kellogg didn't close their factory in BC because they never had a factory here.

Not one mention of Globalization, lol.

Yes, the catch-all blame whenever a factory closes....sigh...

[driveangry]

So does this mean Milk sales will go down ???

[LoneWolf_53]

It's Christy's fault that Kellogg's is shutting down an Ontario plant.

[hobbyguy]

LV - I would remind you that Brian Mulroney, when he was opposed to "free trade" (before he got elected), said that the American companies would close the Canadian branch plants when times got tough, and we'd get "clobbered".

Heinz closed their plant moving the production south, the London locomotive plant got closed and the jobs moved south, the Stelco plant got closed after US Steel reneged on its agreement and moved the jobs south, the Kellogg plant now closing and production being consolidated south...the list goes on...

See, Brian was right before he was wrong.

[logicalview]

Really? I've read many articles on the closure. Where does it say that?

You probably won't see Kelloggs admit that expensive power is the reason they are leaving, but the fact is, Ontario's energy policy has been managed about as badly as possible by the McGuinty Liberals. Just so so dumb....this isn't about "free trade", it's about bad energy policy, plain and simple.

Ontario drives manufacturers away with overpriced electricity

BARRIE McKENNA

OTTAWA — The Globe and Mail

Published Sunday, Oct. 13 2013, 7:18 PM EDT

The laws of economics suggest that when supply goes up, prices fall.

Not so in Ontario’s increasingly twisted electricity market.

Here, heavily discounted surplus power is routinely sold to neighbouring utilities in Quebec and various U.S. states, while customers at home face a steady diet of higher rates.

Ontario had net exports of more than 1,000 megawatts of electricity last year, or enough to power a million homes. Occasionally, Ontario Power Authority even pays Hydro-Québec to take electricity off its hands – power the Quebec utility can then resell in New England at a profit.

Al Yousef, process improvement manager at plastic packaging maker Par-Pak Ltd. of Brampton, Ont., is appalled by this bitter irony.

The company pays 12 to 14 cents per kilowatt hour for electricity at its three Toronto-area plants – four or five times the price charged to Ontario’s neighbours in the wholesale market.

Mr. Yousef wonders whether Ontario really wants a manufacturing industry. Par-Pak, which has 500 Ontario employees, could save millions of dollars a year by moving to Buffalo, which is dangling cheap power and tax breaks to attract Ontario manufacturers.

“It’s not fair for us as a manufacturer … [to be] paying for the mistakes done by the province,” Mr. Yousef said. “We are a Canadian company, but how much can we take?”

Thanks to a dysfunctional market, Ontario has become an island of high-priced electricity in a North American sea of surpluses and falling rates.

Higher electricity rates is one of a growing list of good reasons not to make things in Canada. Already reeling from the high dollar and a host of competitive disadvantages, expensive power risks forcing more businesses out of the province altogether – to Quebec, or more likely, to the United States.

The problem goes way beyond the $1-billion squandered on two cancelled gas-fired power plants.

The culprit for Ontario’s pricey electricity is the so-called “global adjustment,” which is added to customer bills, but not the export price. The surcharge is a catch-all that pays for a decade or more of botched deregulation, bloated guaranteed-fixed-price energy purchase contracts and costly efforts to promote wind and solar, while shuttering coal plants.

Energy traders eagerly exploit this price gap. Meanwhile, independent power suppliers, including wind farms and the privately owned Bruce Power, a nuclear power plant near Kincardine, Ont., are often paid for electricity they don’t ever produce – a concept referred to as “deemed generation.”

“Ontario is probably the worst electricity market in the world,” said Pierre-Olivier Pineau, an associate professor and electricity market expert at the University of Montreal’s HEC business school.

Ontario’s prices are now dangerously out of whack with key neighbouring jurisdictions, who are using cheap natural gas to produce power. The average price paid by large industrial power users in Toronto is nearly 11 cents per kilowatt hour, according to Hydro-Québec’s 2013 survey. That compares with 4.8 cents in Montreal, 5.45 cents in Chicago and 8.12 cents in Detroit.

The Toronto-Montreal price gap has widened to 123 per cent, up from 79 per cent in 2009. Four years ago, power was cheaper in Toronto than Chicago. Now the reverse is true.

There is a better way, argued Tim Clutterbuck, president of stainless steel maker ASW Steel Inc. of Welland, Ont. Instead of selling cheap surplus power to neighbouring utilities, Ontario should be using discounted electricity as an economic development tool – a model used in Quebec, New York and elsewhere.

“That might be a better argument than trying to cover the real cost of power,” he explained.

ASW Steel, like other manufacturers, is doing whatever it can to stay competitive, including holding down labour costs and contracting out certain activities. “Power has to come along for that ride,” he said.

The competitive pressures on Ontario are mounting. Quebec, which already has some of the cheapest power rates in North America, says it will now offer special discounts as part of a $2-billion effort to revive its moribund economy. Key to the new pitch: Power at 4.6 cents per kilowatt hour for large power users, or half of the going rate in Ontario.

In a rational system – a country with an integrated national electricity market – one province wouldn’t be poaching customers from another.

But don’t blame Quebec. This is a made-in-Ontario mess.

http://www.theglobeandmail.com/report-o ... e14854752/

So Hobbyguy - you see that due to stupid energy policy driven largely by the insane man-made climate change myth, companies in Ontario are being forced to hold down wages. You hate that, as you always blame free trade for this phenomenon. You've been proven wrong, yet again. It would appear to me that what is needed is for foolish leftist governments to abandon this stupid fixation with high-priced energy sources, just because they are "green' (even though they aren't green at all) and focus on creating jobs - and that starts with offering manufacturing bases cheap power.

[Prestige Mike]

Well this is certainly connected to free trade.

It's simple in my mind though, if Kellogg's doesn't want to support Canada, then Canadians shouldn't support Kelloggs.

[danmartin]

[quote="hobbyguy"]LV - I would remind you that Brian Mulroney, when he was opposed to "free trade" (before he got elected), said that the American companies would close the Canadian branch plants when times got tough, and we'd get "clobbered".

Heinz closed their plant moving the production south, the London locomotive plant got closed and the jobs moved south, the Stelco plant got closed after US Steel reneged on its agreement and moved the jobs south, the Kellogg plant now closing and production being consolidated south...the list goes on...

See, Brian was right before he was wrong.[/quote]


A little more locally is the shutdown of Western Star in Kelowna and Consumers Glass in Lavington by American based companies that cost us many good paying jobs.

[logicalview]

Well this is certainly connected to free trade.

It's simple in my mind though, if Kellogg's doesn't want to support Canada, then Canadians shouldn't support Kelloggs.

It's certainly connected to electricity and energy pricing in Ontario. If Ontario doesn't want to be competitive with its electricity policy then more businesses are going to leave. It's just that simple.