CX North America gains Little Truck Solutions as client

TECUMSEH, Ontario—CX North America Information Services Inc. (CX North America), provider of freight collaboration solutions for the transportation industry, announced that Concord, North Carolina–based Little Truck Solutions Inc., a specialist in delivering expedited, hot shot and less-than-truckload shipping, is a customer.

Little Truck Solutions is using both the CX North America platform and mobile app with its fleet of trucks.

The CX North America platform, a SaaS solution, provides carriers, brokers and 3PLs a single view of their freight and partner network on any desktop or mobile device. And, because it is already integrated with industry-leading telematics and transportation management solutions, subscribers can easily incorporate customers, carriers and subcontractors.

Companies also can maintain real-time communication with carriers and drivers via the CX North America app, available on both the Google and Apple App Stores.

David Harrison, president of Little Truck Solutions, shared, “Ninety percent of our shipments happen on the same day – we are contacted by a company that needs freight delivered within hours to destinations near and far. Many customers want status updates as frequently as every 15 minutes.”

“CX North America allows us to automate this function, saving us time and money while increasing driver safety. Plus, CX North America, unlike other providers, updates in real time. With CX North America, we can even schedule freight pickups for the return trip, avoiding deadhead miles.”

Lyall Cresswell, president and CEO of CX North America, said, “We are pleased to welcome Little Truck Solutions, to our growing customer base. It is particularly satisfying to be selected as the technology partner of a firm that has built its reputation on agility, dependability and visibility. We look forward to helping Little Truck Solutions increase its customer base and grow its revenue through the value-added services it can now provide with our technology.”


More than 100 TTC workers fired or resigned over alleged benefits fraud

To date, the TTC says 82 employees have been fired and more than 20 have resigned or retired to avoid firing, and it expects those numbers to grow

TORONTO—The Toronto Transit Commission says more than 100 of its employees have been dismissed or have resigned over benefits claims irregularities.

Toronto police laid criminal charges in July 2015 against the owner of Healthy Fit, a health care products and service provider that TTC employees frequented.

It is alleged that receipts were provided to employees by Healthy Fit for claim reimbursement where no product or service was obtained, or where receipt amounts were inflated.

It is also alleged that Healthy Fit and the employee making the claim would then share the money paid out by the TTC’s insurer at the time, Manulife Financial.

Investigators are continuing to interview employees who filed benefits claims involving Healthy Fit and the TTC says they will be dismissed if the evidence shows the benefits plan was defrauded.

To date, the TTC says 82 employees have been fired and more than 20 have resigned or retired to avoid firing, and it expects those numbers to grow.


Bombardier executive payout causing problems for Trudeau’s middle class claims

This is not helping the middle class,” said interim Conservative leader Rona Ambrose, who wondered how the company can afford to enrich its senior leaders while laying off employees

OTTAWA—Justin Trudeau refused to denounce Bombardier for enriching its executives even as the company rakes in nearly $1 billion in taxpayer money, drawing opposition charges that the Liberals are on wobbly legs when it comes to standing up for the middle class.

The ensuing public outcry has prompted the Montreal-based aerospace firm to put off for a year giving six executive officers more than half of the compensation it had planned _ and has also prompted the prime minister to change his tone.

Last week, Trudeau said the government respects “the free market and the choices that companies will make.” On Monday, he said the government is “obviously not pleased” with Bombardier’s decision, “but we are happy to see it make decisions that are fixing that for Quebecers’ and Canadians’ confidence.”

Bombardier is eliminating 14,500 jobs around the world by the end of next year, part of a restructuring plan aimed at helping the company turn itself around. The plan includes federal and provincial money: a $372.5-million federal loan for Bombardier’s CSeries and Global 7000 aircraft programs, and $1 billion from Quebec.

Last week, the company issued a proxy circular showing that six executives were in line for a nearly 50 per cent increase in compensation, most of which was to be granted in 2019.

The fact the company can afford to enrich its senior leaders while laying off employees suggests the taxpayer money they were given by the government is doing nothing to help Canadians, said interim Conservative leader Rona Ambrose.

“This is not helping the middle class. This is lining the pockets of the 1 per cent of the 1 per cent with tax dollars,” Ambrose said during question period.

Anger at the planned pay raises culminated in a weekend protest at the company’s Montreal headquarters and a late night climb-down by Alain Bellemare, the chief executive officer, who declared he was asking Bombardier’s board of directors to delay the payments.

The company underestimated public anger and is now paying attention, Bellemare said.

The Liberals, however, remain tone-deaf, opposition MPs charged.

“We have seen anger expressed by voters in both the United States and in Canada about how out of touch elites are,” Conservative leadership candidate Michael Chong wrote in an email to supporters.

“The Bombardier example is one reason why this anger is out there. And citizens and taxpayers have every right to be upset.”

Government bailouts to industry are a politically sensitive issue for the Tories, given their avowed commitment to free market principles but also the fact that while in government, they provided billions to bail out the auto sector.

Conservative MP Tony Clement—who was industry minister at the time of the auto bailout in 2009—said in his view, 400,000 jobs were on the line and had Canada not helped shore up the automakers, the economy would have collapsed.

“It was an extraordinary circumstance. We were facing an economic depression,” Clement said. “Bombardier, every year they come to the government asking for more money.”

Clement is supporting leadership candidate Maxime Bernier, who has said he disagreed with his government’s decision at the time, and that he won’t support bailouts if he becomes leader.

“Corporate welfare is a terrible policy, for businesses, for taxpayers, for Canadians,” he said in an April 3 letter to supporters.

The only way to help them is by cutting taxes, Bernier said.

The Liberals had also pledged to make cuts—to provisions that help corporate CEOs like those at Bombardier make more money, pointed out NDP leader Tom Mulcair on Monday.

Total compensation for Bombardier’s top five executives and board chairman Pierre Beaudoin was to be US$32.6 million in 2016, up from US$21.9 million the year before, and some of that is in stock options.

People pay less tax on income earned on stock options than they do if they are paid in cash.

The Liberals had pledged to close that tax loophole but have backed off in the last two budgets, arguing in the past that for many companies it is a valuable way to compensate all employees, not just CEOs.


Purolator returns to normal operations

MISSISSAUGA, Ont.–Purolator has reached a tentative agreement with the unanimous endorsement of the Teamsters’ bargaining team.

With today’s announcement, Purolator’s business is returning to normal operations. Effective immediately, the company has lifted its temporary service suspension, a precautionary measure that came into effect on March 28 to protect customers from being negatively impacted by a possible strike.

The agreement is subject to ratification by Teamsters Canada members. Purolator respects the ratification process and will not discuss the specifics of the tentative agreement until union members have the opportunity to review and vote on the contract.

“We apologize to our customers for the inconvenience over the past few days,” said Ken Johnston, Vice President of Human Resources and Labour Relations at Purolator.

“We’re happy to get back to delivering our customers’ packages now that we’ve reached an agreement that positions the company and employees for sustainable growth in today’s fast-changing marketplace.”


Focus on innovation, shift to Asia will encourage Canada’s competitiveness

Canada’s 2017 budget seeks to grow our export trade through innovation investment and new trade avenues in Asia and Europe

 

With Budget 2017, the government is attempting to cement Canada’s place in growing high-tech sectors and markets in Asia and Europe. PHOTO TRW Automotive

OTTAWA—Finance Minister Bill Morneau and the Trudeau Liberal’s second budget comes at a tense time for Canadian exporters. As U.S. President Trump threatens his trade partners with a border adjustment tax and pledges to reduce corporate taxes and loosen regulations, Canadian firms are asking: how do we stay competitive?

Many in the business community were hoping for an answer to Trump’s plans to cut taxes, but the Liberals stood pat on tax reform. Given how little we know about what is going to happen south of the border, that may have been prudent.

Jordan Brennan, an economist with Unifor, Canada’s largest private sector union, says that tax cuts may not even be a wise course to begin with.

“You can hear people in Canada saying we need to cut business taxes even further, we can’t layer on carbon taxes, we can’t pursue aggressive climate policies because we’re going to become uncompetitive. It’s a powerful argument, I just don’t know if it’s correct,” Brennan said.

He asserts that Canada has already cut corporate taxes substantially, and it hasn’t had the intended effect on our export trade.

“We’ve done all the things to incentivize business to invest and innovate, and meanwhile, our exports have tanked, our GPD growth has slowed, productivity is abysmal, and that probably signals that we need to rethink our approach to economic development,” he said.

Invest in Innovation

The approach that Brennan proposes seems to be the same thing the Trudeau government had in mind when drafting this year’s budget: investment in innovation.

The rationale is simple. Instead of slashing taxes, regulations and labour laws to keep up with the U.S.—a “race to the bottom” as Brennan calls it—we should instead pump money into new discoveries in important sectors.

Not a lot of new money was earmarked for innovation initiatives in this year’s budget, but existing investment was dramatically reorganized.

What Budget 2017 has provided is a roadmap for innovation spending, as the government attempts to cement Canada’s place in growing high-tech sectors.

The $1.26 billion Strategic Innovation Fund brings together four funds, two for aerospace and two for automotive: the Strategic Aerospace and Defence Initiative, Technology Demonstration Program, Automotive Innovation Fund and Automotive Supplier Innovation Program.

In addition to reorganizing these initiatives, a further $200 million is being contributed over 3 years. $100 million is new money and $100 million is being pulled from a cleantech allocation in the 2016 budget.

The amalgamation of these innovation funds could be a huge boon to what Brennan calls “trade exposed” sectors, like aerospace and automotive, which rely heavily on exports and could be badly hurt by protectionist policies in the U.S.

“It looks like it’s going to streamline the process for funding and grants, and hopefully simplify it, as well. We’ve been calling on the government to do this for some time, to streamline their operations so auto companies have a one stop shop, so to speak, when they think about making a strategic investment in a jurisdiction,” said Brennan.

This budget also shifts $950 million from the 2016 budget to six specific sectors of superclusters, which will be targeted as areas of investment and growth:
Advanced Manufacturing; Agri-food; Clean Technology; Digital Technology; Health, Bio-sciences and Clean Resources; and Infrastructure and Transportation.

“You want to generate these clusters, where investment pours into a tightly knit geographic area. There’s a competitive dynamism that emerges, and the firms become more competitive with each other, and as they become more competitive with each other, they become more competitive with external players,” Brennan said.

He continued, “I think that is a real thing. Whatever we can do to incubate those companies and to develop leading players, we should.”

The economist cited examples like Silicon Valley and Hollywood as successful examples the Canadian government can look to.

While Brennan is happy with the innovation focus in the budget, he says that in the future specific funds need to be allocated to research and development, as well.

Brennan cites research from the International Monetary Fund, which argues that unless governments fund 50 per cent of research and develoment costs, firms won’t be motivated to undertake research because when one firm makes a breakthrough, often everyone in the industry benefits. The economics of discovery aren’t exactly attractive, thus research and commercialization should to be incentivized.

New Trade Opportunities

Plans to shore up the quality of our products by investing in new technology are encouraging, but we still need international markets to buy our goods.

The budget offers two paths for our exports, one to the east and one to the west. One path has Brennan and Unifor excited, the other not so much.

Budget 2017 announced that CETA will be coming this spring, but Brennan warns that this may not be a good thing for Canada’s advanced manufacturing sector—which recently overtook energy as Canada’s largest export sector.

“Our stance is that this is going to undermine jobs, just because of the nature of the purchasing preferences of the consumers from prospective markets. We don’t expect that Europeans are going to start buying the cars that we make here in Canada, even if we reduce tariffs,” said Brennan.

Canada’s auto trade balance with Europe is already lopsided, and given the popularity of European cars in Canada, and the lack of enthusiasm about North American cars in Europe, Brennan argues CETA will make things worse.

The economist is much more enthusiastic about the announced pivot to Asia, represented in the budget by a $256 million commitment over five years to join the Asian Infrastructure Investment Bank (AIIB).

Canada is the first North American country to apply for membership to the AIIB, which was accepted Mar. 24. Through the bank, Canada will invest in Asian infrastructure projects, particularly in transportation, telecommunications and energy.

The Trudeau government says it will introduce legislation on Canada’s membership to the bank in 2017.

The AIIB, established by China in 2015, has already invested US$1.73 billion in project money, and plans to loan out $10-15 billion over the next five years.

The bank has stirred controversy in the U.S., which opposes it on grounds that loans provided don’t require caveats about the environment, labour rights or anti-corruption reforms—stipulations usually included in World Bank and IMF loans.

But despite ethical questions, the AIIB presents lucrative procurement opportunities for Canadian firms.

The budget also planned for stronger trade relations with China, India and Japan, something that Brennan and Unifor are more enthusiastic about than CETA.

“Our government has always been worried about the undue reliance on the U.S. for our exports, but almost all of the global growth is coming from Asia now. They’re looking to establish economic relations with the high growth portion of the world,” Brennan said.

While Brennan asserts that we should still be very happy with our close trade relationship with the U.S., which remains the world’s largest economy, he says that diversifying our exports by investing in the fasting growing economic region on earth is a sound decision.


Bombardier seeks injunction against Metrolinx over Toronto light rail contract

Citing multiple delays, the Toronto-area transit agency issued Bombardier a formal notice to cancel the $770 million vehicle contract last November

MONTREAL—Bombardier has turned up the heat in its fight with Metrolinx by asking an Ontario court to impose an injunction in response to the provincial transportation agency’s notice to terminate a contract for light rail vehicles in Toronto.

The transportation manufacturer’s railway division says its 49-page application to the Ontario Superior Court is designed to encourage Metrolinx to resume good-faith discussions as required in its contract.

In November, Metrolinx ramped up pressure on Bombardier to deliver a prototype train by issuing a formal notice of intent to terminate its $770-million contract, a step that would be required if the agency ultimately asks a court to rip up the deal.

Bombardier turned the table on Metrolinx late last week, accusing it of putting the project in jeopardy through multiple delays.

“Since the contract was signed in 2010, Metrolinx has changed the scope, the timelines, and the technical qualifications countless times,” it said in a news release Feb. 10.

“Furthermore, Metrolinx’s unwillingness to work in good faith to find solutions on behalf of the people of the greater Toronto (area) has been disheartening.”

Bombardier said the “unjustified cancellation” of the contract would cost Ontario taxpayers millions of dollars, kill hundreds of jobs and put projects like the Eglinton Crosstown and Finch LRT in jeopardy.

“For us, what’s important now is to protect our rights, to protect the jobs of our employees and to make sure that we protect Ontario taxpayers that actually need the benefits of this light rail system,” said spokesman Marc-Andre Lefebvre.

Lefebvre said that the test vehicle is ready for inspection in Kingston, Ont., but Metrolinx refuses to accept it.

In its application, Bombardier questions whether Metrolinx really wants the entire order for 182 cars given that it has reduced the number of transit lines that were to be serviced.

Metrolinx declined to respond to these claims, saying it has been repeatedly disappointed by Bombardier’s performance and its ability to deliver the product on time for the scheduled 2021 opening of the $5.3-billion Eglinton Crosstown.

“We are further disappointed that they would take this legal step considering the long-standing relationship Metrolinx has with Bombardier on a number of fronts,” spokeswoman Anne Marie Aikins said in a statement.

Bombardier said Friday that its trains will be ready before Metrolinx’s tracks are even available for testing. Production on the actual cars isn’t slated to begin until 2018 and won’t be in service until 2021.

“We can deliver ahead of schedule if necessary,” added Lefebvre.

Ontario Transportation Minister Steven Del Duca scolded Bombardier for turning to the courts in its dispute with Metrolinx, saying he expects suppliers to honour their contractual obligations and “perform professionally.”

“It is unfortunate that Bombardier has chosen to take this step,” Del Duca said in a statement issued Friday evening. “The people of the region deserve more, and our government is committed to delivering it.”

MONTREAL—Bombardier has turned up the heat in its fight with Metrolinx by asking an Ontario court to impose an injunction in response to the provincial transportation agency’s notice to terminate a contract for light rail vehicles in Toronto.

The transportation manufacturer’s railway division says its 49-page application to the Ontario Superior Court is designed to encourage Metrolinx to resume good-faith discussions as required in its contract.

In November, Metrolinx ramped up pressure on Bombardier to deliver a prototype train by issuing a formal notice of intent to terminate its $770-million contract, a step that would be required if the agency ultimately asks a court to rip up the deal.

Bombardier turned the table on Metrolinx late last week, accusing it of putting the project in jeopardy through multiple delays.

“Since the contract was signed in 2010, Metrolinx has changed the scope, the timelines, and the technical qualifications countless times,” it said in a news release Feb. 10.

“Furthermore, Metrolinx’s unwillingness to work in good faith to find solutions on behalf of the people of the greater Toronto (area) has been disheartening.”

Bombardier said the “unjustified cancellation” of the contract would cost Ontario taxpayers millions of dollars, kill hundreds of jobs and put projects like the Eglinton Crosstown and Finch LRT in jeopardy.

“For us, what’s important now is to protect our rights, to protect the jobs of our employees and to make sure that we protect Ontario taxpayers that actually need the benefits of this light rail system,” said spokesman Marc-Andre Lefebvre.

Lefebvre said that the test vehicle is ready for inspection in Kingston, Ont., but Metrolinx refuses to accept it.

In its application, Bombardier questions whether Metrolinx really wants the entire order for 182 cars given that it has reduced the number of transit lines that were to be serviced.

Metrolinx declined to respond to these claims, saying it has been repeatedly disappointed by Bombardier’s performance and its ability to deliver the product on time for the scheduled 2021 opening of the $5.3-billion Eglinton Crosstown.

“We are further disappointed that they would take this legal step considering the long-standing relationship Metrolinx has with Bombardier on a number of fronts,” spokeswoman Anne Marie Aikins said in a statement.

Bombardier said Friday that its trains will be ready before Metrolinx’s tracks are even available for testing. Production on the actual cars isn’t slated to begin until 2018 and won’t be in service until 2021.

“We can deliver ahead of schedule if necessary,” added Lefebvre.

Ontario Transportation Minister Steven Del Duca scolded Bombardier for turning to the courts in its dispute with Metrolinx, saying he expects suppliers to honour their contractual obligations and “perform professionally.”

“It is unfortunate that Bombardier has chosen to take this step,” Del Duca said in a statement issued Friday evening. “The people of the region deserve more, and our government is committed to delivering it.”


OPG to boost executive salaries $6.8M; Metrolinx proposes $100K hike for CEO

Two Ontario crown corporations plan executive pay hikes as province lifts a public-sector wage freeze; critics call move a “slap in the face”

 

The province says OPG needs to be able to attract and retain talent in order to ensure the safety of Ontario’s nuclear power generation system. PHOTO: Ontario Power Generation

TORONTO—Ontario Power Generation says salaries for its executives are expected to rise by up to $8 million in the next few years as the provincial government lifts a public-sector wage freeze.

Meanwhile, transit agency Metrolinx is proposing to boost its CEO’s pay by up to $118,000, which would see him earn a maximum of $479,500.

All broader public sector agencies are being tasked with posting their proposals for new executive compensation packages under guidelines that came into force in September.

The government sent colleges back to the drawing board after concerns were raised about the salary comparators that they were using for proposals that would boost presidents’ salaries by up to 50 per cent.

OPG landed on a maximum salary of $3.8 million for its CEO—who currently earns $1.5 million—though it says it is setting the target significantly lower.

Spokesman Neal Kelly says the CEO’s salary will actually remain unchanged for three years, but the other approximately 80 executives will now be eligible for merit pay, and when the new program is fully implemented in 2019, that’s expected to cost an extra $6 million to $8 million annually. Kelly said OPG has saved $10 million in staff reductions since 2012.

OPG, which operates two nuclear sites, was granted permission by the government to use private-sector comparators, as the size and scope of its operations are “more complex than those of many other public sector organizations in Canada” and it has primarily recruited its executives from the private sector.

A spokesman for Energy Minister Glenn Thibeault said the safe operation of Ontario’s large nuclear generating stations requires “technical experts of the highest standard.”

“We fundamentally believe Ontario Power Generation must be able attract and retain this highly specialized expert talent to ensure the safety of Ontario’s nuclear power generation system and deliver key nuclear projects such as the Darlington Refurbishment,” Dan Moulton said in a statement.

OPG is responsible for more than $40 billion in assets, and has $5 billion in annual revenue and more than 9,000 employees.

NDP finance critic John Vanthof called it a “slap in the face” to Ontario families that a CEO of OPG could be eligible for a salary of up to $3.8 million.

“Most Ontarians haven’t seen a real increase in pay in years, despite soaring utility and housing costs,” he said in a statement. “It just isn’t fair for the executives of our public utilities and institutions to be raking in huge salaries, raises and bonuses while so many Ontarians are struggling to put food on the table.”

Metrolinx spokeswoman Anne Marie Aikins says the agency’s human resources committee will make a recommendation to the board of directors on where—within the $375,300 to $479,500 range—the president’s salary should fall once the public consultation is over.

Progressive Conservative transportation critic Michael Harris said these raises could see executives who were recently called on the carpet get 30 per cent raises.

“When everyday Ontarians see single-digit increases at best, (Premier) Kathleen Wynne is rewarding these executives to the tune of hundreds of thousands of dollars, potentially,” he said.

Metrolinx came under fire in the latest auditor general report for not holding contractors and design consultants accountable for projects that were late or inadequate and still awarding new work to contractors that had performed poorly in the past.

The auditor said one contractor working on a pedestrian bridge over Highway 401 in Pickering installed one of the bridge trusses upside down, but was still paid millions of dollars. Metrolinx disputes this, saying it was a misaligned support beam and not an upside-down truss.

Metrolinx is also dealing with a troublesome joint roll-out of the Presto card system with the Toronto Transit Commission, with delays and technical glitches.

A spokeswoman for Transportation Minister Steven Del Duca said Metrolinx’s proposal is only the first step of the process and no decisions have been made.

Public sector agencies are required to post their executive compensation proposals publicly for 30 days of comment. Metrolinx’s proposal is available in a link on the homepage of its website.

OPG’s public comment period is over, but it received four public comments.

Ontario’s new executive compensation framework caps salaries at the 50th percentile of “appropriate comparators.”


Honda to invest nearly $500M in Alliston, Ont. Civic, CR-V plants

Ontario auto industry gets a boost as carmakers clash with Trump over Mexico operations, threatened border tax in U.S.

 

Federal and provincial ministers Navdeep Bains and Brad Duguid made the announcement alongside Honda Canada president and CEO, Jerry Chenkin, Jan. 9. PHOTO: Honda

ALLISTON, Ont.—As the major automakers formulate responses to U.S. border tax threats from President-elect Donald Trump, Honda Canada Inc. has announced plans to invest $492 million in its Ontario operations.

The investment will cover the cost of a new paint shop and a range of upgrades at Honda’s Alliston, Ont. campus, where the Japanese automaker builds the Civic, CR-V and four-cylinder engines.

Both the federal and provincial government will commit $41.8 million to the project, or about 17 per cent of the total cost, securing thousands of jobs north of Toronto—though the fresh investment is not expected to create any new positions.

Honda said the new paint shop will reduce its greenhouse gas emissions by 44 per cent compared to its current paint operation, while the nearly half-billion-dollar investment will support a number of other modernization efforts over the next three years.

Ontario has provided hundreds of millions of dollars in grants to automakers in the past several years, including up to $85.7 million to Honda in 2014 for its Alliston plant, $85 million to Fiat Chrysler last year for an expansion of its minivan assembly plant in Windsor, $42.1 million to Toyota in 2015 for upgrades at its Cambridge assembly plant and a new line in Woodstock, and $70.9 million in 2013 to Ford for its Oakville assembly plant.

Ottawa has also handed out millions in grants during that time, and federal Economic Development Minister Navdeep Bains said the sector is a key driver of economic growth.

“This investment in Honda of Canada will bring significant economic and environmental benefits to Canada both now and in the long term,” he said in a statement. “It will keep our industry competitive and ensure that well-paying middle-class manufacturing jobs stay in Canada.”

Honda’s Alliston plant has capacity to build approximately 400,000 Civic and CR-Vs each year, as well as a quarter-million engines.


U.S. Navy proposes biggest shipbuilding effort since the Cold War

The massive 355-ship proposal could provide a huge boost to shipyards that have struggled because budget caps that have limited funding for warships

BATH, Maine—With President-elect Donald Trump demanding more ships, the Navy is proposing the biggest shipbuilding boom since the end of the Cold War to meet threats from a resurgent Russia and saber-rattling China.

The Navy’s 355-ship proposal released last month is even larger than what the Republican Trump had promoted on the campaign trail, providing a potential boost to shipyards that have struggled because budget caps that have limited money funding for ships.

At Maine’s Bath Iron Works, workers worried about the future want to build more ships but wonder where the billions of dollars will come from.

“Whether Congress and the government can actually fund it, is a whole other ball game,” said Rich Nolan, president of the shipyard’s largest union.

Boosting shipbuilding to meet the Navy’s 355-ship goal could require an additional $5 billion to $5.5 billion in annual spending in the Navy’s 30-year projection, according to an estimate by naval analyst Ronald O’Rourke at the Congressional Research Service.

The Navy’s revised Force Structure Assessment calls for adding another 47 ships including an aircraft carrier built in Virginia, 16 large surface warships built in Maine and Mississippi, and 18 attack submarines built in Connecticut, Rhode Island and Virginia. It also calls for more amphibious assault ships, expeditionary transfer docks and support ships.

In addition to being good for national security, a larger fleet would be better for both the sailors, who’d enjoy shorter deployments, and for the ships, which would have more down time for maintenance, said Matthew Paxton, president of the Shipbuilders Council of America, which represents most of the major Navy shipbuilders.

“Russia and China are going to continue to build up their navies,” he said. “The complexities aren’t going to get any easier. The Navy, more than any of the services, is our forward presence. We’re going to need this Navy.”

Many defence analysts agree that military capabilities have been degraded in recent years, especially when it comes to warships, aircraft and tanks.

The key is finding a way to increase Navy shipbuilding to achieve defence and economic gains “in a fiscally responsible way that does not pass the bill along to our children,” said independent Sen. Angus King of Maine, a member of the Armed Services Committee.

Even when Trump takes office, no one envisions a return to the heady days during the Cold War when workers were wiring, welding, grinding, pounding and plumbing ships at a furious pace to meet President Ronald Reagan’s audacious goal of a 600ship Navy.

The Navy currently has 274 deployable battle force ships, far short of its old goal of 308 ships.

Lawrence J. Korb, a retired naval officer and former assistant defence secretary under Reagan, said the Navy’s request isn’t realistic unless the Trump administration is willing to take the budget “to levels we’ve never seen.”

“You never have enough money to buy a perfect defence. You have to make trade-offs,” said Korb, senior fellow at the Center for American Progress.

But investors apparently are betting on more ships.

General Dynamics, which owns Bath Iron Works, Connecticut-based Electric Boat and California-based NASSCO, and Huntington Ingalls, which owns major shipyards in Virginia and in Mississippi, have both seen stock prices creep upward since the election.

“To the generic military shipbuilder, it’s a bull market right now,” said Ronald Epstein, an analyst at Bank of America’s Merrill Lynch division.

In Bath, the 6,000 shipbuilders aren’t going to count their eggs before they hatch.

“A lot of people are hopeful that it’ll happen,” Nolan said. “But they’re taking a wait-and-see approach. They’ve heard it before and then seen it not come to fruition.”


Tesla misses delivery forecast again, blames short-term production challenges

Electric car maker falls short of 80,000-vehicle annual target, despite posting 64 per cent increase in production

PALO ALTO, Calif.—With the Model 3 launch looming on the horizon, Telsa Motors Inc. has again missed its own delivery forecast.

The electric vehicle maker shipped 22,200 vehicles in the fourth quarter of 2016, bringing its total to 76,230 for the year. The Elon Musk-headed firm said earlier this year it planned to delivery 25,000 vehicles in the last three months of the year and at least 80,000 throughout 2016.

Tesla blamed “short-term production challenges” between late October and early December for the miss, but noted that it did meet its production target.

“We were ultimately able to recover and hit our production goal, but the delay in production resulted in challenges that impacted quarterly deliveries, including, among other things, cars missing shipping cutoffs for Europe and Asia,” the company said in a statement.

Though not all vehicles reached buyers, the company said it manufactured 24,882 vehicles in Q4 and 83,922 vehicles in 2016, up 64 per cent from 2015.

In a year that saw widespread interest in Tesla’s cheaper upcoming Model 3—more than a quarter-million customers pre-ordered the electric sedan—the automaker said net orders for its Model S and X were also at all-time highs.

Still, auto analysts have remained skeptical about Tesla’s move to the mainstream. The latest delivery miss, far from Tesla’s first, does little to lessen concerns.