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February 26, 2011

Multinational investment a 'dog-eat-dog' business

Although the Montreal job market is relatively healthy, the biggest local employment story this winter has been a negative one - the decision by Electrolux of Sweden to close down its plant in the Montreal suburb of l'Assomption.

As a result of that decision on Dec. 14, more than 1,300 workers are going to lose their jobs next year. Electrolux is moving the work to Memphis, Tenn., where Electrolux is building a new plant and local and state authorities have pledged $165 million in subsidies and tax breaks.

Corporate subsidies aren't popular with taxpayers, but they are a reality in the global economy where multinational companies and different political jurisdictions court one another for new investment dollars.

Few people in Montreal understand the dynamics of this courtship game better than Howard Silverman, founder and president of Le Groupe CAI Inc. of Westmount. The consulting firm works with Quebec subsidiaries of multinational companies to help them lobby government for subsidies, and lobby their own head offices to invest in Quebec rather than other jurisdictions.

Silverman was a registered lobbyist on behalf of the l'Assomption plant in the months preceding the Swedish head office's decision to pull out of Quebec.

In a question-and-answer interview published today (left), Silverman gives us his version of what happened with Electrolux, as well as his take on how the courtship game takes place on the international stage.

As a former director of corporate affairs for Ericsson Canada in Montreal, Silverman was instrumental in persuading the Swedish parent firm to open an R&D facility in Montreal in 1991. That move by Ericsson created 325 high-paying local jobs. Since then, Ericsson has made Montreal a base of operations for international technical assistance, and the company employs 1,600 people in Montreal today. After doing the R&D deal, Silverman left Ericsson and founded Groupe CAI Global as a consulting firm.

Source: http://www.montrealgazette.com

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