David Akin’s On The Hill

Nortel fired CEO Frank Dunn [pictured] yesterday. We had two pieces on CTV National News last night. [Look for the Video links at this page where you'll also find some additional information]
My colleagues at the Globe and Mail have a pile on this as well, as do most of the world's major business papers. It's the top item, for example, in today's Wall Street Journal.
Two key phrases in Nortel's press releases yesterday: First, the company said Dunn “was terminated for cause.” I've never seen that at a company of Nortel's size. Usually, when a CEO gets turfed, they put a positive spin on things like, “left to pursue other opportunities” or some such puffery. So good on Nortel for being frank (if you'll pardon the pun). Now we'd like to find out what exactly was the cause.
Secondly, Nortel made the remarkable admission that its earlier financial statements “should not be relied upon”. The company is continuing its investigation but there's no clue when it will get to the bottom of things.

Wow. Nortel this morning said it had fired CEO Frank Dunn “for cause”.
It also made the temporary suspensions of a former chief financial officer and comptroller permanent, i.e. Douglas Beatty and Michael Gollogly were fired, also “for cause.”
What the cause is is what reporters are trying to find out today. Nortel is in the midst of an accounting scandal and today said it would delay results and drastically re-state earnings.
The stock lost 20 per cent on the news.

Comcast, the giant U.S. cable company outfit, said this morning that it will not merge with the Walt Disney Co.
“It has become clear that there is no interest on the part of Disney's management and Board in putting Comcast and Disney together,” Comcast CEO Brian Roberts said in a company press release announcing the decision. “As a result, we have withdrawn our offer.”
The $54-billion (U.S.) deal would have been the biggest convergence play since America Online Inc. swallowed up Time Warner inc. Convergence, incidentally, for me, is when a distribution company buys a content company. AOL-Time Warner is a good example and, here in Canada, BCE's acquisition of the assets that make up my company, Bell Globemedia, is another good example.
Many in my industry think convergence is a media company owning outlets in two different media, say print and TV or TV and radio, but to my way of thinking, that kind of cross-media ownership has been around for years. (Think of the CBC and its TV and radio stuff.)
The political, cultural, and economic implications of a true convergence play — wires vs content — are, it seems to me, much more significant than a TV station owner buying a newspaper property.
Here's some more headlines on this breaking story.

One of the neat things about the publishing platform this blog uses is that there is always some neat cool feature being added. Sometimes these features seem added in just because the good people at Tucows could. (Hello Address Book. Good to see you, not sure why you're here.) Others make damn fine sense. One of those is a Web Stats feature.
With Web Stats I can tell how much bandwidth this blog has consumed and how much space it's taking up on a Tucows server. (Answers: More than a 1 gig of bandwidth but just a spritely 10 MB of server space.)
The Web Stats feature on Blogware also lets the Blog author track what you, dear Blog reader, find most appealing content wise. Here's the five most popular entries at this blog in April (ranked by popularity):

1. The Winning rim
2. Canada's record industry loses; ISPs win in music downloading lawsuit
3. Finally!! Airport Extreme and my LinkSys router are talking!
4. File-sharing ruling opens Pandora's box
5. “Eleven guys. Eleven versions out of focus”

Incidentally, in April alone, more than 5,600 unique visitors have dropped in and looked at a total of more than 26,000 pages. I think that's pretty good.
Thanks for stopping by. And thank you to the Blogware development army and assorted accordion player hanger-ons for some very cool tools.

I'm a commuter, doing about 100 km round-trip each workday. And that means that gasoline is one of our family's big expense items. So, naturally, I'm not thrilled with various predictions that the price of oil is going to go higher and remain high. Oil prices were somewhere around $37 (US) this week and could go to $40.
So, as I said in a piece I did for CTV [see the link to my story under the Video section on the right], that means more pain for consumers at the pump.
But it also means continuing strong oil company profits. Imperial Oil's first quarter profit, which it announced Wednesday, was a near-record profit. Shell's was a record for the quarter. Next week, Petro-Canada and Suncor will likely post very healthy numbers.
All of those firms are Canadian companies, of course, and their profits mean good things for Canada's economy. For one thing, the tax revenue in oil-rich parts of the country, like Alberta and the Atlantic provinces, jumps when these firms do well. They also tend to spend more on new capital projects and buy other goods and services. That helps put more money back into the economy and create new jobs.
Canada is a net exporter of oil — that is: we produce more than we consume — sending most of the extra stuff to the U.S. This helps bring new wealth into the country.
All these record profits have made it a very good year to be an investor in the oil and gas sector — the resource fund at Altamira, for example, is up 58 per cent since January 1 this year. And, even though they may not know it, most Canadians have their own money tied up in this sector. Certainly, the Canada Pension Plan, which most Canadians contribute to, would have invested in this sector (just as they invest in most sectors of the economy.) Most company pension plans, too, would likely have money in oil and gas.
Because the sector is such a big part of the Canadian economy, many of these firms are part of the benchmark Toronto Stock Exchange 300 and that means that many mutual funds in Canada that mimic the index or invest in Canada's biggest corporations would own oil and gas shares. In fact, hundreds of mutual funds in Canada are exposed to the sector.
Which means, as I hoped I explained in that CTV piece, the high pump prices may be a case, for Canadians at least, of money coming out of one pocket and going into another.

The Strawflower seeds were planted in peat pots and then left in the dark last weekend. The first sprouts started appearing about four days after that and today, most have sprouted. I'll probably move those with sprouts into the light today.

I'd forgotten that I bought some Narcissus bulbs last fall and put them in in the curbside garden in the front. So what I thought was Hyacinths popping up out there was, in fact, these tiny little daffodil-like things. The first one popped open late Thursday.

Just a few days after planting the seeds in peat pots, the Zinnias and Alyssum are up already! Out the back, the flowers on the periwinkle have appeared.

Tim Hearn [Photo: at the podium at the company's annual shareholders meeting in Toronto] is Imperial Oil's CEO. His presentation:
“It was a record year on several fronts, including financial performance.”
The company posted earnings of $1.68-billion or $4.52 a share. (All prices CDN $) Return on average capital employed was 24 per cent.
Imperial is the only Canadian industrial corporation with a Triple-A rating from credit-rating agency Standard and Poors.
Hearn says that if you had invested $100 in Imperial in 1993, it would be worth $550 by the end of 2003, an increase of 450 per cent. Imperial says that's bettter than either the energy index or the composite index on the Toronto Stock Exchange.
Hearn also spoke about an issue bedevilling Shell right now and some other major oil and gas producers — how to account for, report, and value reserves.
Hearn says the company has not had to change the way it accounts for reserves to bring the company in line with new regulations about reporting reserves.
“We have always taken a conservative approach to booking and reporting reserves.”
For its first quarter, Imperial Oil reported a profit of $509-million or $1.40 a share. Profit would have been greater but for the rising Canadian dollar, Hearn said. In the same quarter last year, the company posted a porift of $538-million or $1.42 a share — a company record.
Total revenues for the quarter were $5.07-billion compared to $5.48-billion in the same quarter last year.
Hearn also spoke about long-term prospects for the oil and gas industry globally. He says Canada and Canadian companies are uniquely positioned to supply growing world energy demands for the next 20 or 30 years.
“The oil sands of western Canada contain more oil-in-place than the world's largest oil-producing country — Saudi Arabia,” he said.
Imperial Oil Ltd. of Toronto is one of the largest producers of crude oil and natural gas liquids in Canada, a major producer of natural gas, the largest refiner and marketer of petroleum products — sold primarily under the Esso brand name — and a major producer of petrochemicals.

Sheelagh Whittaker, who used to run EDS Canada and now runs EDS businesses in Australia, is an Imperial Oil board member. She gave a presentation about the company's environmental and safety record.
“Imperial understands that the work it performs involves an element of risk … Last year was the safest the company has ever recorded. The rate of work-related injuries … was the lowest on record. Imperial's employee injury rate has improved four-fold over the last 20 years.”
She says contractors, though, get injured at a much higher rate than employees. Imperial wants to reduce that injury rate among contractors.
“Imperial's goal is nobody gets hurt.”
“Imperials safety record is among the best in the industry.” Who has the best record?
The boundary Lake Facility has not had a lost-time incident in the last 38 years. 11 Imperial Oil facilities had no work-related incidents last year.
— Note to self: [see photo] All the directors are sitting in a row on stage here. It is a row of white guys with one exception — Sheelagh. It's an odd sight in this day and age when we expect the governing bodies of our institutions to reflect the cultural makeup of the group — in this case shareholders — that they represent.
Last year Imperial completed a $600-million project to produce low-sulphur gasoline. Low-sulphur gasoline helps reduce emissions from autos.
Oil companies are large consumers of energy. Company says it co-generation strategy is reducing greenhouse gases.
Whittaker also talked about site remediation, a huge job for an oil company. You have to clean up old gas station sites, oil wells, and other used-up facilities. Imperial spent $90-million in 2003 on site remediation.