Winnipeg Free Press

Winnipeg Free Press (Newspaper) - June 27, 2012, Winnipeg, Manitoba C M Y K PAGE B4 BUSINESS EDITOR: STEVE PONA 697- 7264 business@ freepress. mb. ca I MARKET DETAILS B5,6 I winnipegfreepress. com WEDNESDAY, JUNE 27, 2012 B 4 OTTAWA - Global economic turmoil and negative reports at home are taking a toll on the faith of ordinary Canadians and Americans in the economy. Canadians are most gloomy about near- term job prospects and the health of their finances, according to the latest Conference Board of Canada consumer confidence survey, released Tuesday. The consumer confidence reading for the month shows a fall of 6.8 points to 74, about where it stood in January. South of the border, where the Conference Board's U. S. index dropped for the fourth month in a row to 62 points, the lowest level since the start of the year. Economists often don't put a lot of stock in consumer confidence surveys, but Jennifer Lee, a senior economist with the Bank of Montreal, said there is reason to take these results to heart. Canadians and Americans have been bombarded with daily reminders of the intractable nature of the European crisis and reports that businesses are holding back on investment and hiring, Lee said. In this backdrop, it is natural to assume households may also be reluctant to go out on a limb on purchasing decisions, which would further hurt the economy. " I think there is reason for pessimism given that there is so much uncertainty out there," she said. " We're still expecting relatively strong growth in emerging markets, but we've just downgraded our outlook for Europe." The responses on job prospects were among the weakest since early 2009, when the economy was in the depths of the worst recession in decades. About twice as many ( 28.1 per cent) thought the job market would get worse in the next six months as those ( 13.9 per cent) who believed it would get better - an 8.4- point deterioration on the issue. " The overall balance of opinion on this question has now been negative for the past 12 months, further evidence that consumer spending in Canada is likely to slow over the coming months," the Ottawa- based think- tank said. As well, only 17.4 per cent said their financial situation had improved in the past six months, while 20.4 per cent said it had worsened - a deterioration of 3.6 points. Bank of Canada governor Mark Carney has suggested he will lower his outlook for growth in the monetary policy review in July in light of the economy's disappointing 1.9 per cent expansion in the first quarter and the continuing slowdown. Statistics Canada will issue the result for gross domestic product performance for April on Friday. In a paper issued Tuesday, Capital Economics said it expects the global slowdown will further depress commodity prices and take the loonie to about 92 cents US by the end of the year and as low as 86 cents US by the end of 2013. " There are a host of downside risks to the Canadian dollar, including further falls in commodity prices and the diminishing prospect that the Bank of Canada will raise interest rates any time soon," said David Madani, Canadian chief economist with the global economic forecasting group. " What's more, if Canadian oil prices decline much further, it is difficult to see how this would not upset the domestic economy, putting even more downward pressure on the Canadian dollar." Surprisingly, attitudes toward making major purchases were largely unchanged in June, but actual behaviour belies the answers on this question. Statistics Canada reported last week retail sales fell 0.5 per cent in April and dropped 0.8 per cent in volume terms for the third decline in four months. Home purchase growth also slowed. On a regional basis, confidence fell sharply in Atlantic Canada and Ontario. Confidence was also down in the Prairie provinces, but not as much, and fell only marginally in B. C. and Quebec. - The Canadian Press North Americans' faith in economy suffering H ERE'S a story about the confluence of ingenuity and opportunity that probably would not have worked if it wasn't set in Winnipeg. Henryk Koch and Mirek Byczynski, engineers and friends from their hometown of Wroclaw, Poland, moved to Calgary and established careers in the sale and service of municipal sweepers - those large trucks equipped with massive brooms that clean streets. After 15 years in the business, they understood there was a bit of a gap in the product selection on the market. While still in Calgary, they quit their jobs and designed and built their own sweeper, but decided to move to Winnipeg six years ago to set up their company. " Because of the oil industry, Calgary was so expensive to lease space and too hard to find workers," Koch said. " We thought it would be easier in Winnipeg." This month, Challenger ( which is changing its name to Odra because of a trademark conflict) struck an alliance with the much larger Elgin Sweeper Company. Elgin will market and distribute Challenger/ Odra's mechanical street sweepers under the Elgin Sweeper brand name through its large dealer network throughout North America. The alliance is almost certain to result in a dramatic increase in sales, which means a dramatic increase in production. And that means an increase in the company's economic footprint in Winnipeg. U. S.- based Elgin, a division of $ 800- milliona- year Federal Signal Corp., is the dominant player in the North American sweeper market and was the brand the two partners worked with at the dealership in Calgary for 15 years. The new arrangement takes Challenger/ Odra from seven or eight solid dealers selling its municipal sweepers to more than 50. Koch said the annual production rate of about 40 units is expected to double. ( Elgin moves more than 1,000 units a year.) " We don't know how quickly that will happen, but we know we are going to have to grow." The company operates out of about 6,000 square feet of space in an Inkster Industrial Park facility with about 15 employees. Koch said they will have to hire more people and likely need more space. Brian Giles, sweeper products manager for Elgin Sweeper, based in Elgin, Ill., just west of Chicago, said, " Odra is not alone. It has two primary competitors. But we saw Odra as being the largest and most sophisticated of the three." Giles said the Winnipeg- made economical, compact sweeper is ideal for Elgin's municipal and contractor customers who need powerful cleaning without a full- size sweeper. " The Broom Badger ( the name Elgin will use to market the Challenger/ Odra machine) offers the same efficient cleaning system as our larger models, but is suitable for smaller sweeping applications," Giles said. The alliance is a testament to how a little innovation can take hold. After struggling in the early years like any new company - especially those with products selling for about $ 150,000 - Challenger/ Odra's smaller- profile vehicle started to get traction in the market and a niche began to emerge. " We have made some inroads into some areas where we got noticed, and that is why the alliance," said Charles Hunt, Challenger/ Odra's sales manager. " What happened is we started selling our sweepers into areas where there were nothing but Elgins for decades." Meanwhile, emission- control regulations in the U. S. are making Elgin's larger sweepers more expensive and the financial crisis that caused American municipalities to trim their budgets may make Challenger/ Odra's smaller units more attractive. " Municipalities are struggling. The market is difficult, no question," Giles said. " But it's not that demand is not there. Some are saying that their budgets are cut and it will be years before they can buy another one." Not to say they'll all turn to the smaller, slightly less expensive versions made by Challenger/ Odra, but the small company has been given a massive leg up in its efforts to grow. After outsourcing to a U. S. final assembly plant for a few years, Challenger/ Odra purchased production space in Grand Forks a month ago. Because of cross- border issues with its truck chassis supplier - automobile manufacturer Isuzu - Challenger/ Odra does final assembly on its U. S. sales in the United States, not unlike New Flyer and Motor Coach Industries. Now that Elgin will be responsible for North American sales, Challenger/ Odra's people can concentrate on overseas sales. There are already a few units in Europe and one in India. martin. cash@ freepress. mb. ca Broom Badger numbers Some features of the Elgin Broom Badger, made in Winnipeg by Challenger/ Odra: . standard dual- camera and seven- inch colour monitor system provides views to the side broom or rear; . sweeper features dual gutter brooms with up to a 300- centimetre sweep path; . equipped with a 830- litre water tank for dust suppression; . a direct drive squeegee- type elevator design to handle heavy- duty sweeping applications, while the 150- centimetre- wide elevator on the Broom Badger sweeper eliminates the need for curtains and provides increased productivity. BUSINESS Watch By Julian Beltrame Class actions against banks OK'd CLASS- ACTION lawsuits against CIBC and Scotiabank seeking hundreds of millions of dollars for unpaid overtime can go ahead, the Ontario Court of Appeal ruled in a pair of decisions Tuesday. The suits allege thousands of workers were denied overtime pay even though they were assigned more work than could be completed within their standard hours. The cases come amid a slew of similar cases over wage and hour issues south of the border. A lower court had denied class action status to the CIBC ( TSX: CM) case, while a different court had allowed class action status in the Scotiabank lawsuit. The Appeal Court felt both cases, which have not been proven in court, should be handled the same way. In the CIBC case, teller Dara Fresco filed a lawsuit in June 2007. Fresco launched the case on behalf of more than 31,000 tellers and other front- line customer service employees working at more than 1,000 CIBC branches across Canada, including assistant branch managers, financial- service representatives, financial- service associates and branch ambassadors. Cindy Fulawka, a personal banking representative at Scotiabank, filed her class- action lawsuit against the bank in December 2007 seeking to represent some 5,000 Scotiabank personal or senior bankers, financial advisers and smallbusiness- account managers. Rogers cutting 375 jobs ROGERS Communications Inc. ( TSX: RCI. B) will eliminate 375 jobs as the wireless, cable and Internet provider cuts costs in the face of lower profits and tougher competition on all fronts. The staff reduction is part of a cost- cutting strategy announced earlier this year and includes employees in the business, wireless, and cable and Internet divisions. They follow 300 job cuts announced in March. The latest downsizing covers a variety of skills and includes some management and sales positions, Rogers spokeswoman Patricia Trott said Tuesday. " Going forward, we're managing costs where it makes sense, but we're continuing to invest in driving the business forward, and obviously we have a focus as well on driving revenue, new sources of revenue," Trott said. " This is sort of Part 2 of our cost- cutting initiative that we announced earlier." Rogers hopes to get increased revenues from its mobile banking initiative, devices connected to its wireless network such as parking meters, appliances and machines and other business services. Over my dead body: Merkel BERLIN - German Chancellor Angela Merkel on Tuesday told a caucus meeting there won't be a full shared debt liability in Europe " as long as I live," according to a lawmaker from Merkel's governing coalition. Merkel's comments came as a sharp rebuke of jointly guaranteed debt for the eurozone, known as eurobonds, which some see as a necessary step in fighting off the 17- nation currency zone's debt crisis. Merkel briefed lawmakers from her junior coalition partner, the pro- business Free Democrats, ahead of this week's EU summit. A participant confirmed Merkel's remarks to The Associated Press but declined to be named because of the meeting's confidential nature. Another official from the Free Democrats said the caucus " reacted with applause to hearing that the chancellor does not want a joint debt liability." Potash glut looming, report says CALGARY - Global supplies of potash could outstrip demand by 59 to 100 per cent by the end of the decade, a research report from Rabobank warns. The European bank said Tuesday the North American potash consortium Canpotex and its European counterpart BPC won't sit idly by while rivals bring on additional supplies. But Rabobank said one of the key variables will be the degree to which Brazil, India and China are prepared to endure uneconomic projects - either in their own countries or through investments abroad - in order to meet their own needs. Collectively, the three countries accounted for about 40 per cent of the world's potash imports. - from the news services Sweeping success Calgary innovators who moved new business to Winnipeg strike alliance with U. S. firm to market street cleaners By Martin Cash COLE BREILAND / WINNIPEG FREE PRESS Henryk Koch says he and partner Mirek Byczynski moved Challenger to Winnipeg because Calgary was so expensive and workers were tough to find. B_ 04_ Jun- 27- 12_ FP_ 01. indd B4 6/ 26/ 12 9: 19: 05 PM ;