Bombardier job cuts, diamond daze & Facebook's big bet: BUSINESS WEEK WRAP
Another week, another negative headline for Bombardier. The transportation conglomerate's recent downward trend continued this week, with news on Thursday that the company would be laying off more than 1,750 people in its aerospace division.
Citing "softness of demand" for planes, the company announced it would slow production of some of its current fleet of business jets to save money until revenue from the CSeries finally comes onstream.
The move had been rumoured for months, but the size and scope of the cuts came as a shock. And new CEO Alain Bellemare told shareholders that there could be more cutbacks to come as the company is looking at reducing other expenses including supplier and development costs.
That's bad news for a company that has to think years in advance to find its next big product innovation, and sadly all too familiar of late for a former giant that's fallen on tough times (Bombardier's share price fell to its lowest level since 2004 this month.)
Company management and Quebec politicians were saying the right things about the company's survival this week, but at least one doubter says it's just more of the same from the company. "Bombardier's going to do whatever it has to survive, whether that's layoffs, or taking taxpayer dollars," the Fraser Institute's Mark Milke told the CBC this week.
Mining for the truth about diamonds
Michener Award-winning journallist Rita Celli had a great series of articles on Ontario's murky diamond industry this week that may have flown under your radar. You can check out her stories here, here, here, here and here but our favourite was her detective work in digging up just how much, exactly, the government of Ontario netted in royalties from diamonds mined in the province this year, six years after the first (and so far only) diamond mine opened up.
The answer? $226.
No, that's not a typo, and there isn't a "thousand" or a "million" missing. It's small by any metric, but the $226 figure especially stands out when compared with the boring old salt industry, which netted provincial coffers almost $4 million in royalties over the same time period.
The reasons why are complicated and best explained in Celli's story, but it's safe to say that after countless nebulous promises of economic bonanzas when the mine was first pitched, at least in terms of government royalty revenues Ontario's diamond industry is so far proving to be — well, pretty priceless.
If you missed the series this week, they're well worth your time. Check them out at the links above.
The end of 'are we there yet?'
Times of economic certainty are typically times when families eschew expensive plane travel and fall back upon the old standby for summer vacations: the road trip.
But that's not happening at the moment. Despite the cheap loonie and lower gas prices, a survey from the Conference Board of Canada that reporter Aaron Saltzman reported on this week found that by and large, Canadians just aren't gearing up for as many summer road trips any more.
Plane travel is increasing and that appears to be directly at the expense of road trips. And Americans are driving north far less than they used to. That's being partly offset by an uptick in the number of Europeans coming here.
Add it all up and the great Canadian road trip is perhaps becoming a thing of the past — especially the long trip. "Those longer duration trips, say, trips lasting six or seven nights or more, Canadians weren't still looking to do more of that," Greg Hermus if the Conference Board told us this week.
"[We thought] with lower gas prices, we were going to see a bump up, especially on domestic travel intentions… but a lower percentage plan to take their longest vacation within Canada."
Facebook's big media move
There was major news in online publishing this week as Facebook announced it has inked a deal with nine of the biggest news organizations in the world to try out a new feature that would allow those publishers to publish articles and content directly on the social network's system — bypassing their own websites entirely.
It may sound like a small change, but it's a major leap forward for the industry, and one that nobody really knows the outcome. Publishers like the Guardian and Buzzfeed get to save money on the costs of hosting their own content, and gain even more access to one of their biggest traffic drivers. Readers and viewers get faster loading speeds, and the companies involved get the ad money.
It's an innovative experiment that's been rumoured for months, and one that could ultimately change the way people consume their news online
Other stuff
Those were some of the biggest stories making headlines in the business world this week. Check out our website for lots more, and don't forget to follow us on Twitter here to stay up to date with everything we publish.
In the meantime, here's a day-by-day list of our most-read content.
Monday
Tuesday
Wednesday
- DON PITTIS: Stephen Poloz may let inflation creep higher
Thursday
Friday
