“When good men do nothing there are normally bad consequences and loses by default”- Sieg Holle BS MBA
The purpose of this working paper is to see if there is the will or means in the community to save Shoprite ( Screenprint /Store Image ) and the 200 jobs in a revitalized and restructured form . The Shoprite Community Corporation or SCC model has proved effective in the past and is a means to such an end .
Facts and background:
Fact:
Shoprite ( Store Image ) is a mature Brantford headquartered company with over a 50 year tradition of providing prosperity to the community or people of Brant /Brantford in terms of higher paying jobs ,municipal, provincial, and federal tax revenue, and is both a purchaser and proven leading supplier of needed goods and services to the Canadian and international marker.
The company is in technical receivership with estimated assets of 2.5 million and liabilities of 5 million dollars. Over 200 jobs, with an average hourly pay level of $28 are at risk . The Receiver is presently running, and winding down the 2 facilities located on Elgin street They are in the first stage of the receivership process and fulfilling existing orders. No formal RFP for the company or its assets have been publicly posted as is required. The entity is still in operation on a scaled down basis.
Fact:
Based on information provided by political candidates at the Taxpayer Coalition sponsored “Meet the Candidates” and other concerned citizens input- there are compelling reason to retain high paying jobs in the community.
• One in four jobs in Brantford has been lost in the economic downturn which has placed additional strains on community services and other community businesses.
• There are many empty or underutilized industrial factories in the Brant/Brantford community. The economic base and tax base is eroding.
• Two mayor candidates ( Sless and Calnan) have expressed support and suggested that a community initiative be undertaken to save the jobs and company if feasible .
Should good men in the community do something? Are their benefits that override the risks? When is talk and political posturing not enough?
• Why not find out – a prudent business strategy and community decision What is required –a will to succeed.
o The five step process is proven and simple - pre-feasibility( public consultation), Feasibility, Business Plan, Financial /ownership Plan , Implementation
• Leadership required – Who will champion the cause legally?
o An entity is needed to consolidate community interests
o SCC is an entity which can be formed for the purpose
• Considerations
o Do the creditors have an incentive to keep the restructured company alive by receiving a benefit greater then getting a tax write off and write downs ?
What acceptable terms can be negotiated in everyone’s best interests?
o What is the market for the existing and new products that can be produced and marketed by the restructured company?
o What good men should serve on the SOS task Force committee and in what capacity?
o What assistance is available for government or other sources?
Capitalize creditor write-offs
Incentives -municipal, provincial, federal
• Training
• Equipment
• Product service orders
• Other
• Guarantees
• Tax deferrals and grants
• Talent or services lend
o Time is of the essence
Other Points to be made:
• Once the company is decommissioned , it is a sad fact that it will be hard to revitalize . The cost of creating the same level of jobs has proven to be more expensive. See Enterprise benchmarks . The following adages apply
o A bird in hand is worth many promises in the bush
o All the kings horses and all the kings men will not be able to put humpty back together again
• Real time starts when the Receivers asks for public tenders or RFPs. Can we be ready ? It is estimated that this is a 3 to 6 month process.
Can the SCC model work?
Yes , with a few good men, real people that are motivated, knowledgeable, productive and with intelligent leadership
Should we make it work?
Yes , with real action , real energy , real plans, real people –not talkers or self interested posturing .
There are 1200 people ,their families, with their purchasing power, at stake.
Is it worth a shot? Yes Maybe No
Job creation benchmarks – other knowledge and decision information
Economic performance benchmarks Information on Enterprise Brant
Enterprise Brant is responsible for delivering the Community Futures Program in Brantford•Brant County which is a job creation program funded by Industry Canada.
During the past 21 years of operation Enterprise Brant has:
• approved over $16 million in loans to over 600 businesses in Brantford/Brant
• granted over $3.5 million to over 231 Community Development Projects
• assisted over 800 unemployed individuals with starting up 757 new businesses, creating 1028 jobs over the past 21 years.
Small and medium sized businesses can borrow up to $250,000 to expand an existing business or start a new one.
Quick benchmarks Enterprise Brant
These funds are part of the South West Community Adjustment Funds that were allocated to Enterprise Brant to administer for stimulating local economic growth in Brantford and Brant County. As part of the Economic Stimulus package implemented by the Federal Development Agency for Southern Ontario, it is important that these funds are allocated to businesses that will enable them to grow and/or position themselves to take advantage of the improving economy.
What are 200 jobs worth?
SCC comparison using Enterprise benchmarks
To do nothing will cost us more money -
It would take approximately 4-5 years to rebuild the job base at a
financial commitment of $ 3-4 million from government sources. This does not include the cost of compensation to existing workers or their families of those who have lost their jobs.
Sieg Holle
