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Lecture 10

MGTC45- Lecture 10

3 Pages

Management (MGS)
Course Code
Andrew Stark

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Controversy surrounding the Privatization of the Pearson One Terminal Management  Mulroney signed a deal to privatize a consortium of mergers between  Succeeded by Kim Campbell  She called an election in 1993, her liberal opponent Jean Chretien said that he would rip up the agreement  He has all sorts of criticism against the tory government  He was elected in October 1993 and became PM  First thing he did was appoint Bob Nixon to investigate for 30 days on the deal that the Tories signed and advise on what he should do  It was expected that Bob Nixon would rip up the deal  Mergeco was upset by this because they had invested a significant amount to it  Saw privatization was a lucrative opportunity  Different governments have different views  They had to go to the one place in Canada that was friendly towards them  That place was the Senate of Canada  That is because the Senate is composed of appointments and doesn’t change their composition unless they resign at the age of 75  The Senate was dominated by Conservatives  The Senate decided to investigate by holding hearings by the business interests and critics  The Senate committee wasn’t totally conservative but was majorly so  Senators tend to be old  The media reported the arguments  The structure of the debate was interesting  The government had sought a deal where the government would get a good rate of return and the tories thought it would be good public policy (getting money back for taxpayers)  Liberals said that it meant would inevitably raise the fees to airlines and it would raise the price for customers and that wouldn’t be good public policy  Travellers would see ticket prices go up  The government had a response to that was that airports are monopolies  The traveller would have no choice and can’t go to another airport and fly out of it  The tories quoted Deloitte, accountant named Stelheim “anybody who believes airports are monopolies do not understand airports”  Airports do no monopolize  Paxport was competing with Clarage?  so they didn’t want to compete with anybody  Paxport made the argument to the gov’t that it was not strategic to give management to a foreign company  The Liberals said that those arguments are self-serving and they were not good public policy  Ray Hessian, in charge of Paxport’s bid o Made the arguments that a business would make arguments that are self-serving and it was pretty obvious o But you have to reach beyond yourself and show that there would be a benefit to society o His strength was to find public interest based terms  No Clarage as it would create a monopoly and didn’t want foreigners as they didn’t want the terminals controlled by an outsider  Charles Bronffman, took advantage of his meeting with the PM and asked if he could be put into the deal  PM told the public service to cu
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