Saturday, February 25, 2017

You Can't Believe A Word He Says

Kevin O'Leary has been making the occasional trip up from Boston in his bid to become Prime Minister of Canada. His sales pitch -- like Donald Trump's -- is that, as a business man, he knows how to get things done. Alan Freeman writes:

O’Leary’s Trump-esque bid to lead the Conservative party is based on selling his supposed business acumen. But as is the case with the U.S. president, O’Leary’s policies are largely incoherent and mostly based on ‘alternative facts’. In the end, it’s all about one thing and one thing only: Kevin O’Leary. And it’s a reminder that being successful in business (or the narcissism industry) really has nothing to do with your ability to run a government or lead a country.

Consider O'Leary's position on the federal government loan to Bombardier:

O’Leary has been on a rant about Bombardier for years, calling it “one of the most mismanaged aerospace companies in the world.” At another point, he said it was time to cut Bombardier off from any government assistance and allow it to “succeed on its own or fail on its own.”

Okay … so O’Leary is willing to sacrifice the 21,000 well-paid Canadian jobs at Canada’s largest investor in R&D. You can make a case for the idea of ending corporate welfare. But that’s not what O’Leary is talking about. In his latest Bombardier rant, posted this week on his Facebook feed, O’Leary says he understands why Ottawa would want to support Bombardier and adds that it’s important for the company’s customers to know their government backs the company.

The problem, says O’Leary, is that Justin Trudeau has “never done any deals.” O’Leary . . . has done lots. “No more stupid deals,” he bloviates. “I could negotiate that (Bombardier) deal in 24 hours.”

But is he really good at making deals?  Look at his record on Bombardier:

In November of 2015, during one of his periodic anti-Bombardier diatribes, he told an interviewer, “I wouldn’t touch that stock. It’s radioactive waste.” At the time, Bombardier shares were trading at about $1.25 apiece.

Five months later, the company landed a deal to sell up to 125 of its C-Series jetliners to Delta Airlines in a deal worth as much US$5.6 billion. If you had bought $10,000 worth of Bombardier shares when O’Leary was telling you not to, you would have doubled your money. Clearly, nobody ever told Kevin about buying low and selling high.

Donald Trump's record as a business man is pretty spotty. So is Kevin O'Leary's. And, like Trump, you can't believe a word he says.

Image: The Walrus


Pamela Mac Neil said...

GAWD, Owen, O'Leary is sounding more like Trump everyday, lies and all.

Toby said...

I've never been quite sure whether Canada subsidizes Bombardier the company or the Bombardier family. When Canada subsidizes a company the country should buy shares. With enough shares it can vote people to the company board and then see where the money is going. Throwing money at big companies is as effective as flushing it down a toilet. I think we are being fleeced.

As to O'Leary, why would anyone living in a foreign country run for leadership of a Canadian political party? O'Leary is the second foreigner to aspire to be PM. What is Canada to them? The 51st State?

The scary thing for me is that I think Trudeau is so disappointing that voters will elect someone like O'Leary just to get rid of him; you know, the Trump effect.

Owen Gray said...

Strange how reality TV breeds stars who live in an unreal world, isn't it, Pam?

Owen Gray said...

The company has two classes of shares, Toby -- family shares and shares for everybody else. So the government has given them a loan -- like any bank -- that has to be paid back. When the Harper government sold its equity in GM, we got fleeced. At least, this way we should get paid back.

As for the Trump effect, that's what's really worrying about O'Leary.

The Mound of Sound said...

You can't view the government's support for Bombardier in isolation. You have to consider EU supports for Airbus, US supports for Boeing, Brazilian supports for Embraer. Those are the market realities in which any aviation manufacturer stands or falls.

For what it's worth a recent edition of Aviation Week featured a pilot report on the new C-class. AW finds it an exceptional airplane that sets a new standard for its class (passenger load, range, etc.). With the C-class, Bombardier has stepped beyond the regional jet class and into the big leagues with Airbus and Boeing's narrow-body offerings.

It's a bit easier to accept government supports when the company is developing a leading edge product instead of just another also-ran version of what everybody else is building.

Owen Gray said...

Since the end of World War II, the aviation industry has relied on government support, Mound. And agencies such as NASA have driven research and development. Perhaps O'Leary should review his recent history.