New Post to include Map Left out of Earlier version.
Polar Shipping, Fear and Greed, The Lifespan of Empires and an Airline CEO
June 19, 2023 Volume 4 # 7
JUN 18, 2023
Polar Shipping Routes
From Henry Hudson, who disappeared in 1611;
to John Franklin, died in the Arctic in 1847…
…men have frozen to death searching for routes through the Arctic to sail from the Atlantic Ocean to the Pacific. An artist’s impression of the failed Franklin mission.
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Now, with warmer weather, ice-breaking cargo ships and Russia’s nuclear-powered ice breakers it is doable, if not easy. The Northwest Passage is still tough; easier to go over the top of Russia.
As you can see from the map, there are four ways to go. It is a faster way to ship goods from China to say Rotterdam and could reduce shipping costs by 35 percent. One of the theoretical routes is using the port of Churchill, Manitoba, in Hudson’s Bay, named for the explorer who died trying to find the Northwest Passage. The Arctic is a delicate region when it comes to things like oil spills.
The Russian Arctic route is more navigable and the Russians have had nuclear-powered ice breakers since 1957, when they launched the Lenin. This is the Yamal.
The Yamal cutting a path for cargo ships to sail through the Russian Arctic Passage.
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Fear and Greed Index: Greed is Winning.
The American stock market — the S&P 500— is up 7% in the last 30 days. As a broker friend of mine says, it is too hot.
The CNN Fear/Greed indicator uses seven indicators to determine what emotion is in play at the moment. Everyone is piling in and not many people are afraid. Weird.
The seven indicators are: market momentum, stock price strength, stock price breadth, put and call options, junk bond demand, market volatility, and safe haven demand.
Batteries Need Lithium
Until someone comes up with a new type of battery, the world will need a lot of Lithium to power electric cars, trucks and even ships. The world supply of Lithium is pretty uneven.
And Lithium mining can be be pretty ugly. This is in Chile.
Two Empires at Their Peak: One Lasted Centuries; The Other Just A Few Years
The Roman Empire
Reached its peak in 117 AD under the Emperor Trajan. The Western Empire would continue until 476 AD and the Eastern Empire, Byzantium, lasted until 1453.
The Nazi Empire
The Third Reich, Hitler’s evil empire, in December of 1941. It was pretty much downhill from here. Hitler declared war on the United States on December 11, four days after Japan attacked Pearl Harbour. An extremely dumb move. The German army got to the suburbs of Moscow but the Soviets counter attacked on December 5th. This map is as about as far as Hitler advanced. He did get to Stalingrad but that meat grinder of a battle started in August of 1942. The beginning of the end.
House Delivered in a Boxcar
A page from the Sears Roebuck catalogue from a little more than 100 years ago. The Magnolia came in kit form complete with nails and a 75-page instruction manual. Most kit houses came in one boxcar, this one came in two. It was offered from 1918 to 1922 and the price of $6,488 would be worth $117,451 today. There were only seven of the top of the line model sold. Here is one still standing in Syracuse, New York.
Women Astronauts
Essay of the Week
It couldn’t happen today: High School graduate rises to be CEO of airline.
Claude Taylor was a farm boy from New Brunswick who worked his way up from a night reservations clerk at Trans Canada Airlines in Moncton, New Brunswick, to president, chief executive and chairman of Air Canada. Under his watch Air Canada came out from under the umbrella of Canadian National Railways to operate as a crown corporation on its own. But he later admitted the airline was not ready for full privatisation in the late 1980s.
For more than decade Mr. Taylor pushed for the privatisation of the airline but politicians preferred to use Air Canada as a tool of social policy, making sure every city big and small had air service. In the early 1980s both the Liberals and NDP were against selling it and in the 1984 election Brian Mulroney said the state airline would stay in government hands. Among other things, there were worries in Quebec about job losses at Air Canada’s head office in Montreal.
In 1986 Mr. Taylor had brochures and an ad campaign ready to promote the sale of shares to the public. But a nervous Mulroney government changed its mind and postponed the partial privatisation until after the 1988 election. By this time Mr. Taylor was chairman and another man president and CEO. Political appointees were booted off the board of directors and replaced by private sector heavyweights such as Raymond Cyr of BCE and Rowland Frazee of the Royal Bank.
They supported Mr. Taylor and fired his rival who wanted a slower move to the efficiencies of cancelling money losing routes and firing staff, especially at the bloated head office. Air Canada had 23,000 employees and one in six of them was a manager. Three years after privatisation though, Mr. Taylor told John Stackhouse of the Globe and Mail that the airline was woefully unprepared to enter the real world.
“We were not as ready for privatisation as we thought we were,” said Mr. Taylor in 1991, the year Air Canada lost $40-million and had to fire thousands of workers. “I feel a very great weight of responsibility, almost a guilt feeling about what I’m doing to people.”
Claude Taylor was born in Salisbury, N.B., son of a dairy farmer who had four children by an earlier marriage. His father, Martin Luther Taylor, died when Claude was 10. During the Depression he helped his family by milking cows, raising silver foxes and selling eggs.
After high school one of his first jobs was hauling buckets of water for 25 cents an hour to a construction crew building a wartime airstrip near Moncton. At night, he learned typing and bookkeeping at Robinson Business College; he is far and away its most successful graduate. He spent most of his spare time around air strips, watching the planes land and take off. The postwar world was opening up and his accounting job in Moncton wasn't young Claude Taylor's idea of glory. He applied for a job at TCA and got it: a night reservations agent. He took a pay cut and started at $65 a month.
At the time Trans Canada Airlines, which was then just 10 years old, was flying small aircraft on domestic runs, planes such as the Lockheed Lodestar and DC 3. Mr. Taylor would have booked transatlantic flights on the Avro Lancastrian, developed from the Lancaster Bomber. It was soon replaced by purpose built passenger aircraft such as the DC-4 North Star, a four engine aircraft built under licence by Canadair in Montreal.
A year after joining the airline Mr. Taylor transferred to Montreal. He tried to make up for his lack of a college degree by studying accounting at night at McGill University. He rose through the ranks and was soon an aide to the airline's tough president, Gordon McGregor, a parsimonious Scot and former RAF pilot, who ruled the airline with an iron fist and treated his staff like an air force squadron.
"We had manuals for everything," Mr. Taylor told a Globe reporter. He was a rising young executive in the mid 1960s, about the same time as a young politician named Jean Chretien changed the name of the airline from TCA to the more linguistically neutral Air Canada, which it had always been in French.
Claude Taylor did not take on the trappings of a successful executive. He never played golf and he spent many of his off hours as a deacon at the Baptist church he founded near his home in the inner suburb of Cartierville along the `back river’ at the north of the island. He and his family lived in a modest seven-room house where he tended to his roses. A chauffeur drove him to work in a company limousine, but his own car was usually a Buick.
Mr. Taylor was vice-president for public affairs in the early 1970s, when a federal inquiry looked into Air Canada's chaotic financial structure. He was among those who emerged untarnished, and his star rose from that point on. He took the airline to relatively exotic foreign destinations, places of Cold War intrigue such as Moscow, Prague and Vienna.
He was named president in 1976, when Yves Pratt resigned as head of the airline to become a Supreme Court of Canada justice. That move shows how much the airline was in fact, if not in name, a government department run by the Minister of Transport whose minions micro-managed domestic airfares and routes.
There was no incentive to make money. As the Globe’s John Stackhouse put it: “Knowing Ottawa would only take away its profits, Air Canada did its best not to make any.” The main job was expanding and fighting low cost competitors.
“Claude took over the reins of Air Canada in the mid-70s when the industry was going through the dramatic shift from glamorous transportation to the era of mass air travel dominated by wide-body aircraft,” said John Dawe who was a manager of British Airways in Montreal at the time. “Air travel had reached the mass market thanks to the efforts of Freddie Laker and his Laker Airways who, as charter airlines, pressured the so-called scheduled carriers to cut fares.”
Mr. Taylor fought to distance the airline from the federal politicians and bureaucrats. But in 1984 the Liberals took away much of his power. Just before the federal election, they ignored the unilingual Claude Taylor's protests and gave the president and CEO titles to a bilingual francophone, Pierre Jeanniot, who was then executive vice-president and chief operating officer. "I just wasn't ready to give it up," said Mr. Taylor to a Globe reporter a decade later. "We had a lot of things to do and maybe I thought I could do them better."
He was almost killed in one morning in December of 1984 when he stepped off a sidewalk into the path of a car and was sent hurtling through the windshield. When he reached the hospital he was in a coma, and doctors wondered if he would ever come out. Four months later, he was back at work with two canes and a neck brace.
After winning the boardroom battle in 1988 Claude Taylor was in control of Air Canada for several more years. He was back as chairman, president and CEO from 1990 to 1992 when he retired. He was chairman emeritus of the airline from 1993 until his death. In spite of having to lay off so many people, he always remained devoted to the airline and its staff.
“Claude Taylor lived and breathed Air Canada. He was immensely proud of the Air Canada family and the accomplishments of its people,” wrote his family in his death notice. “Whether on an aircraft, or walking through an airport, maintenance base, or a department at HQ, he spoke with—and more important—listened to, all, asking personally for people’s input and taking their advice to heart. Christmas Day would not start at home until after he called Air Canada staff working on Christmas morning at the airport and elsewhere, to wish them and their families a Merry Christmas.”
A devoted family man he would cut short overseas business trips to make it back to Montreal for events such as school concerts. He was equally involved in the lives of his grandchildren.
An officer of the Order of Canada since 1986, Mr. Taylor was a president of the International Air Transport Association, IATA, and many other aviation related organizations. He was on the board of two Montreal area hospitals and honourary president of Boy Scouts of Canada. He was a member of the Aviation Hall of Fame and the Business Hall of Fame.
Fame in the corporate world is as fleeting as it is in so many other walks of life. When Air Canada was asked for a comment on the man who took their company private, the reply was a link to its Facebook page.
Claude Taylor died on April 23, 2015, a month before his 90th birthday. His wife, Frances Watters, died in 2013. He is survived by his brother Fred and by his children Peter and Karen, and six grandchildren and two great grandchildren.