U.S. President Bill Clinton unveiled his proposed budget for the 1997 fiscal year. The plan, which is expected to face stiff opposition in the Republicancontrolled Congress, projects a balanced budget in seven years—in fiscal 2002. The Democratic budget document includes tax cuts of $145 billion for individuals and $13 billion for businesses, together about half the level demanded by Republicans.
GM REACHES SETTLEMENT
The worst work stoppage in the U.S. auto industry since 1970 ended as General Motors reached agreement with striking United Auto Workers in Dayton, Ohio. The 17-day strike, which idled 175,000 GM workers, including 17,000 in Canada, and closed 30 GM North American parts and assembly plants, grew out of GM’s plan to send work on antilock braking systems to outside suppliers that can make parts at a lower cost. GM won the right to outsource at the two Dayton plants only, but agreed to create new jobs to replace the lost work.
JACKSON'S NEW VENTURE
Declaring their commitment to traditional family values, pop icon Michael Jackson and Saudi billionaire Prince Alwaleed bin Talal bin Abdulaziz Alsaud announced a joint venture that would include theme parks, films, concerts, hotels and interactive multimedia projects for children. The duo’s first enterprise: a Jackson world concert tour.
BANKS GET BURNED
The Bank of Montreal and six U.S. and international banks were victims in a $435-million fraud that involved a fictitious plan to develop cigarette alternatives for tobacco giant Philip Morris. Although the Bank of Montreal lost more than $100 million, officials said that it has insurance coverage against fraud and that the impact of any losses on the loan is expected to be negligible.
A NEW PRESIDENT
A former head of the Canadian Security Intelligence Service, Ray Protti, 50, will become the new president of the Canadian Bankers Association on June 3, replacing Helen Sinclair. A career civil servant, Protti will take over the banking industry’s lobby group at a time of intense public criticism over record profits.
The Westray climate
New testimony at a public inquiry into the May, 1992, Westray mining disaster suggested that senior company executives were aware that levels of methane and coal dust in the Nova Scotia mine had reached dangerous levels—and failed to act. Former Westray mine supervisor Fraser Agnew told the inquiry that it was unfair that a few supervisors “take the brunt” for the explosion that killed 26 miners. “A lot of people directly in-
volved . . . are not up here and being questioned about what went wrong,” Agnew said. Subpoenas for several Westray executives, including former president of operations Colin Benner and former chairman Clifford Frame, have been issued, but are not legally enforceable outside Nova Scotia, where most of those subpoenaed now reside. Criminal charges of manslaughter and negligence have also been filed against former mine managers Gerald Phillips and Roger Parry. They are contesting the indictment in the
Supreme Court of Canada.
In other questioning last week, former miner Don Dooley testified that normal safety procedures were ignored in Westray’s total commitment to the coal operation. The laying of stone dust, which might have reduced the mine’s rising level of methane gas, could be performed only on overtime, after regular 12-hour shifts had been completed. “Production, production, production” is what Dooley remembered manager Phillips telling him. “You were never to stop production.”
Dipping into its sizable cash reserves, Ontario-based auto-parts giant Magna International Inc. last week expanded its global reach—buying most of British-based Marley PLC’s automotive division. The investment, expected to help generate European revenues of $1.5 billion, gives the company control of six manufacturing plants and a new product—instrument panels—which is the only part of a car’s interior that Magna is not currently producing. The acquisition will allow the company to benefit further from the “outsourcing” trend now sweeping through the auto industry. Marley’s principal customer is the Germanowned Rover group. Magna, founded by Austrian-born Frank Stronach, had earlier assembled an impressive $590-million cash reserve. Company officials said the Marley investment is just the opening move in a campaign to consolidate its place in the fiercely competitive global auto-parts sector.
Mac-Blo's $300,000 misunderstanding
Senior executives of Canadian corporations are often heard complaining about publication of their annual compensation packages.
Not Robert Findlay, chief executive officer of Vancouver-based MacMillan Bloedel Ltd.
In 1994, the company paid Findlay $524,771— a handsome wage, certainly, but several hundred thousand dollars less than the salaries paid to corporate colleagues in the forest products industry. Properly embarrassed, Mac-Bio decided to give him a rather generous raise—more than 60 per cent. In 1995, Findlay earned $844,000 in salaries, bonus and perks. He also pocketed almost 275,000 company shares. This year, his base salary was raised another notch, to $550,000. Appointed six years ago, Findlay has overseen a dramatic turnaround in MacMillan Bloedel’s performance, doubling sales to $5.25 billion and pushing its return on equity to 15 per cent.
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