Volvos Start (and end) Here: How Nova Scotia’s misguided plan to lure foreign money to save the economy hasn’t changed in 60 years

There’s not a lot going on today, so I’m only posting a few things and then getting into the history of the Volvo plant because why not? Read down for that.

1. Baby right whale

“The first North Atlantic right whale calf of the winter season has been spotted off the Florida coast heading north with its mother, a known resident of the Gulf of St. Lawrence,” reports the Canadian Press:

The Florida Fish and Wildlife Conservation Commission says on Facebook that the two endangered whales were sighted near the mouth of the state’s St. Johns River.

It says the mother — referred to by her catalogue number, 2791 — was spotted five days earlier off the Georgia coast.

Right whales typically migrate south from the North Atlantic to give birth off the coasts of Georgia and Florida from December through March.

Melissa Munro, a spokeswoman for the Sierra Club Canada Foundation, says in a statement that no newborns were recorded last year, and the population sits at a critically low number.

She says the population has been downgraded to 411 — only 71 of which are females that could potentially reproduce.

Incidentally, the Florida Fish and Wildlife Conservation Commission’s Facebook page is a hoot; someone is getting the social media thing right. Check out this photo of an 18-foot Burmese python pulled from the Everglades:

Too bad the entire state will soon be consumed by the rising waters of the Atlantic Ocean.

2. Pedestrian struck

A police release from Saturday:

At 12:54 p.m., Halifax Regional Police responded to a vehicle & pedestrian collision at Barrington Street / Prince Street Halifax. An adult male (23 years old), was crossing Barrington Street and was struck by a car travelling North on Barrington Street. The pedestrian sustained non-threating injuries and has been transported to the hospital. The male driver (30 year old) was not injured. Investigators with the Accident Investigation Section, Forensic Identification Section and Patrol are conducting the investigation. It is not known if charges will be laid at this time. 

Relatedly, “While the number of highway fatalities this year is up more than 50 per cent over 2017, the number of pedestrians killed has almost doubled,” reports Ian Fairclough for the Chronicle Herald:

As of Boxing Day, 76 people have died on Nova Scotia roads this year, up from 48 last year. Of those deaths, 12 have been pedestrians.

That’s as many as the previous two years combined, and the most since 13 people on foot were killed in 2006.

3. Memories

Remember the New Year’s bash/blizzard/clusterfuck of 2009? Good times.

Government

No public meetings this week.

On campus

The universities are closed.

In the harbour

05:00: Crete I, container ship, arrives at Fairview Cove from Norfolk
07:00: Atlantic Sealion, barge, arrives at IEL with Atlantic Larch, tug, from Belledune, New Brunswick.
08:30: Atlantic Sea, ro-ro container, sails from Fairview Cove for New York

Mac Mackay gives the long history of the Atlantic Sealion here:

Built by Saint John Dry Dock in 1966 as a tanker barge, it gained notoriety on September 7, 1970, when it sank off Prince Edward Island. If you guessed that her original name was Irving Whale — you win a prize! She sat on the bottom of the Gulf of St.Lawrence for 26 years, and reportedly oozed bunker C until it became imperative to raise her, at taxpayers expense. After a first attempt in 1995, she was raised in 1996 and arrived in Halifax on August 7 on a submersible barge. After refloating in Bedford Basin she was towed to Halifax Shipyard by the tugs Point Halifax and Point Vim, where she was drydocked to seal her hull and remove other pollutants.

It surprised many to learn, after the multi-million dollar effort to raise her, that she still belonged to J.D.Irving Ltd, who took possession.

The barge was renamed ATL 2701 and was laid up until March 2001 when she was towed out to Shelburne by Altantic Elm. There she was refitted for wood chip service to run from Nova Scotia to Saint John, NB. Since that service ended she has been used in a variety of barge services based out of Port Hawksbury.

…

In 2009, as part of a general renaming policy within Atlantic Towing, she was given the name Atlantic Sealion. This theme continues one started by Irving when barges were named after sea mammals and fish. There was an Irving Sealion at one time, and that mammal was picked this time rather than reverting to the whale.

IEL is the tug berth next to the Woodside Ferry Terminal. IEL is short for Industrial Enterprises Ltd, the former owner of the dock, which was the site of the first Volvo plant in Nova Scotia.

Dimitry Anastakis, a historian at Trent University, detailed the history of IEL and Volvo in “Building a ‘New Nova Scotia’: State Intervention, The Auto Industry and the Case of Volvo in Halifax, 1963-1998,” a 2004 article in the journal Acadiensis:

In Halifax, provincial politicians and policy-makers were also keen to develop Nova Scotia’s industry beyond traditional resource extraction, and utilized the newly created Industrial Estates Limited (IEL) to foster their activist bent. This new attitude was epitomized by the provincial government of Robert Stanfield. The Volvo plant provides a case study of the motives of these economic policy-makers.

…

The wholly owned Crown corporation was backed by a $23 million government investment. Initially, the company was intended to build industrial parks to lease space to companies, but IEL also built factories for companies that leased at rock-bottom prices. One advertisement for the company proclaimed: “Industrialists! Have IEL finance and build your plant in Nova Scotia! The company will develop the site of your choice, finance and build your plant, lease it to you at low rental and, if and when you wish, sell it to you at book cost”. Eventually IEL became a direct lender to companies, both for capital projects and for equipment. Volvo was an early and longstanding beneficiary of IEL’s largesse, both in the form of loans and support for plant, and, as we shall see, in facilitating direct subsidies for transport costs.

…

Through IEL, Nova Scotians would subsidize the transportation of Volvo cars from the Halifax/Dartmouth plant to the tune of $9.67 for every vehicle shipped to Toronto and $9.33 for every one shipped to Montreal. The indemnity for shipping Volvo cars westward was capped at $150,000 over the next three years — thereafter, it was to be open-ended, a considerable expense if Volvo were to expand its production, but one that IEL and the government were willing to bear if the facility took off as they hoped.

The site for a plant was also to be supported by Nova Scotia tax dollars through the granting of loans to the company to secure a facility. Samuel and company representatives investigated a number of sites in late 1962, and decided that Halifax-Dartmouth was the best location: since the company was dependent on shipments from Sweden, and Halifax was the closest major North American port to Sweden, it made sense to locate there. The city’s good road and port infrastructure also helped to convince Volvo. In January 1963 Samuel informed IEL that the company had leased a 55,000 sq. ft. dockside former sugar refinery owned by Acadia Sugar Refineries Co. in Dartmouth for $2 million for three years. For its part, IEL loaned the company funds for the lease at very favourable terms (8 per cent) until a plant could be built “to order” by the Crown corporation. The new Volvo facility was little more than a converted warehouse. 

Ah! Closest to Europe! Take that, Bousquet! But wait…

Halifax was also ideal because of its lower labour costs, especially in comparison to those in the traditional Canadian automotive-producing communities in Ontario. Volvo officials were well aware that the average hourly industrial wage in Halifax in 1963 was $1.86 while the average hourly wage of a GM worker in Oshawa was between $2.16 and $2.29. Thus, Nova Scotia’s proximity to Sweden was not the only locational benefit bestowed upon the company as the Halifax location would produce a significant labour cost advantage.

I especially like this part:

The Volvo announcement sparked a burst of Nova Scotia pride. Volvo’s arrival was likened to an “economic miracle” by Stanfield in the legislature, an event he “could hardly believe. . . . For years we have all dreamed of something like this, and now the dream has become a reality”. The Halifax Chronicle-Herald also captured the spirit unleashed by the announcement: “All Nova Scotians should rejoice in the good fortune of Dartmouth, chosen yesterday as the location for a branch assembly plant of the giant Swedish car manufacturer, Volvo”. [Volvo Canada President Pat] Samuel heralded the choice of Nova Scotia as a testament to the “inherent traditions of quality of workmanship dating back to Nova Scotia’s period of eminence as one of the world’s biggest builders of wooden ships”.

Volvos Start Here!

The plant started its “humble” operations in June 1963.

Much of Anastakis’s article deals with the Canadian–U.S. Trade Pact and how it affected the auto industry, and how that in turn affected Volvo’s operations. We’ll skip that and get back to Dartmouth:

[C]ontinued disappointing production figures sparked stories that Volvo intended to flee to greener pastures. Compounding these rumours was the fact the company’s lease at the Atlantic Sugar Refineries Plant was expiring in 1967 and that the company did not wish to renew the lease with Volvo. Moving the company’s head office to Toronto in 1966, and setting up a major parts depot at a new $1.2 million facility in Toronto, did not help matters. In early 1966 Volvo Canada President Kohler was forced to quell rumours that the company was moving to Quebec; he publicly stated the company was eager to remain in Nova Scotia.

Volvo did move, but only to a new facility across the harbour from Dartmouth. After difficult deliberations over choosing a new site and a host of false starts, in 1966 Volvo took possession of a new and larger plant on Halifax’s Pier 9. Built by IEL and leased to Volvo, the facility was a 190,000 sq. ft., $1 million investment by the Crown corporation. Incentive was further provided by the Halifax City Council, which offered a 10-year tax-benefit package. The plant’s location allowed Volvo to load shipments directly into the facility. Again, this move by Volvo was heralded as a signal that the company was in Nova Scotia to stay, although the company did not own the building outright.

Pier 9 is the pier just south of the MacKay Bridge that was recently expanded. Continues Anastakis:

The company’s request for further assistance was realized when Volvo officials informed government representatives in 1968 that another expansion was necessary due to the growth in demand for Volvo cars in the Canadian market. The request was accompanied by the threat of departure: Volvo’s Kohler informed IEL board members that “we realize that IEL and NHB [National Harbour Commission, the co-owner of the Pier 9 facility] have done their utmost in the past to keep Volvo in the Maritimes, but if expansion space cannot be provided now or in the future, we must take a closer look at our future growth potential elsewhere in Canada”. After considering a proposal that would have seen a new facility of either 20,000-vehicle or 50,000-vehicle capacity production built somewhere else in the Halifax area, the company asked for loans to expand their present Pier 9 facility by 60,000 sq. ft., and this was authorized by IEL in 1970. With the Pier 9 expansion, annual production capacity at Halifax expanded to 15,000 vehicles. Although they did not pursue an entirely new facility, the company’s fortunes seemed to be positive: employment had expanded to over 300 people and, in January 1971, the plant launched production of the new Volvo 142E, the first computer-controlled fuel-injected car in North America. In August, the 40,000th vehicle produced by Volvo in Halifax rolled out of the plant.

Nonetheless, rumours continued to persist that the plant’s position was precarious, a situation which was exacerbated by labour difficulties. In 1974 UAW Local 720, in a strike position following the end of their contract, were locked out by the company after negotiations broke off over the issue of overtime rates. Volvo representatives made it clear to Nova Scotia officials that they could not operate the facility under the overtime provisions being demanded by the union; Volvo executives were, in the view of IEL President Dean Salsman, “very disturbed and concerned about the negotiations”.

IEL and government representatives were not sympathetic to the union’s position, and went to great lengths to show that Volvo’s employees were paid as well as their counterparts in central Canada. They feared that further labour disruptions would lead to the company’s always-rumoured departure from Halifax, prompting development minister George Mitchell to admit to Minister of Labour Walter Fitzgerald: “We are always very concerned about this organization and are afraid that if they suspect that they will have many more labour difficulties they may well close down their operation”.

…

In 1987 Volvo and IEL announced that the company would leave the Halifax plant at Pier 9 to move to an entirely new facility constructed at a cost of $13.5 million by Volvo at Bayer Lake Industrial Park. Volvo’s move was sweetened by further tax breaks given by the municipal government, which required the company to pay only a fraction of its municipal tax bill for the next ten years. While some municipal councillors voiced concern about the continuing breaks for the company, especially after it was reported that Volvo Canada had been increasingly profitable during the 1980s, the municipal measures passed with little dissent. During the move to the new facility, Volvo planned to reduce its workforce, which led to further labour difficulties at the plant as a wildcat strike ensued. Production reached near-record lows, and Volvo workers recall the move with bitterness. Their bitterness would reach a breaking point only a few years later. By the mid-1990s, the company faced new challenges in its North American strategy – one which required drastic changes to its Halifax plant.

On 8 September 1998, Volvo announced that it was closing the Bayer Lake assembly plant, stating that it was no longer “economically viable” to produce cars in Halifax for the Canadian market.

…

In the wake of the closure announcement, management-worker relations came to a boil after the company offered a severance package that was deemed unacceptable by the employees. A 31-year veteran at the plant stated: “It’s sad that a company which demanded so much loyalty from its workers has so little to offer in return”. He felt that the company’s initial severance offer would have cut his pension practically in half. In response, the workers occupied the plant in October 1998.

Anastakis goes on to assess whether the Volvo enterprise was worth it:

Some have viewed the story of Volvo in Canada as an example of corporate exploitation. Critics of the company argue that “Volvo did not ‘bring a little bit of Sweden’ to Nova Scotia; instead the company quickly adapted to and exploited the peripheral conditions of its new location”. The company took advantage of a weakened economic jurisdiction and lower labour costs, and gained the benefit of preferential treatment in tariff, capital and infrastructure policies from federal and provincial governments — all in exchange for the promise of booming employment and increased industrial development. But that promise never materialized. Volvo never employed more than 200 people directly in the plant; its partial-knock-down system resulted in few secondary jobs in either parts or assembly; the plant produced barely 10,000 vehicles in an average year, a shadow of the over 100,000 vehicles produced at Volvo’s European operations.

On the other hand, the plant did provide employment for a couple of hundred people.

And, we got a cool story about Halifax Harbour out of it:

“There Are Still At Least 24 Volvos Submerged In A Canadian Harbor,” wrote Máté Petrány. “Some say 24, others 26, while the Bedford Institute of Oceanography mentions 32. ”

How’d the Volvos end up on the bottom of the Basin? Trident magazine took a stab at an explanation in 2012, in an article about divers:

And according to LCdr Leyte they found “some pretty interesting things.”

As an example, he said they found 24 Volvos sunk in Bedford Basin. It’s his understanding that a container ship in the 1980s didn’t have the correct papers for the shipment of Volvos, so “they dumped perfectly good Volvos in the middle of the Bedford Basin” rather than ship them back.

All 24 of the Volvos are now marked so ships don’t hook into one when they drop their anchors.

Pier 41/42

“The expansion of Pier 41 / 42 at Halterm is legitimately underway,” writes Peter Ziobrowski for the Chronicle Herald:

Though the Port Authority announced in October that work had begun, it didn’t actually get going until this month. The first tasks were closing the harbour lookoff near Point Pleasant Park and the removal of the walkway from the side of the pier.

McNally Construction Inc. won the bid for the dredging and has been assembling the required equipment at Pier 9. This phase of the work will likely get underway after the holidays.

The tender for construction of the actual expansion closed this month. That contract has yet to be awarded, but it seems likely it will go to McNally, the lowest bidder.

McNally has built several piers in Halifax, including the recent expansion of Pier 9, the new jetty at the navy dockyard and a previous extension to Pier 42.

McNally is based in Hamilton, Ont., and was acquired by Weeks Marine of New Jersey in 2011. McNally maintains an Atlantic Canada office in Dartmouth.

Where are the Canadian military ships?

Footnotes

I’ll be publishing an update on the Chris Mosher story later today. Also, I have to spend a few hours researching something downright crazy.

It’s been good to slow down a bit and spend time with family over the holidays, but I’m looking forward to getting back to the grind.

Happy New Year.

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