Post by ferryfast admin on Sept 28, 2011 10:55:45 GMT -5
Hahn going, but ferry pain just starting
By Les Leyne, Times Colonist September 28, 2011 5:53 AM
www.timescolonist.com/business/Leyne+Hahn+going+ferry+pain+just+starting/5469225/story.html#ixzz1ZGNWY7Gm
The lightning rod will be gone soon, but a big storm is still brewing over B.C. Ferries.
If anyone thinks president David Hahn's departure at the end of the year will ease the ferry system's problems, they're in for a rude surprise.
The corporation is losing serious money. And there is no forecast that anticipates any circumstances in the next few years that will change that.
Even if the Canadian dollar plummets - to our competitive advantage - the American economy isn't producing the discretionary income needed to create tourists. If it does, Americans don't get the idea of passports.
Canadians seem to have developed sticker shock at the current ferry fares. And they have no place to go but up.
And no matter how many people ride the ships, the system still needs major investments.
Underlying all that is the lack of a long-range government vision of what the ferry system is all about.
The last one was laid out in 2003, when the Liberals severed the system from the government and forced the corporation to stand on its own. Then they brought in Hahn, the brash former aviation executive from New York, to run it.
It was change they wanted, and it was change he delivered.
It's long forgotten what miserable shape B.C. Ferries was in by the time the Liberals took over government.
Everyone remembers the fast ferries debacle, where $460 million - twice the original estimate - was invested in three ships that simply didn't work on B.C. Ferries' routes.
But that wasn't even half of it. On the day in 2000 when the New Democratic Party government threw in the towel and admitted the fast ferries were a disaster, the cabinet ministers wrote off $1.1 billion in ferry debt. Not even half of it was a result of the fast ferries. The rest was accumulated debt from year after year of running at a loss.
Hahn started gambles that were just as big as the fast ferries. The difference is that some of his paid off.
He took on the ferry union in an early showdown and the two sides eventually arrived at a deal that has more or less secured labour peace for the last several years. He ignored the expectation that B.C. ships would be built in the province and ordered three big new ships from Germany, where they build ships faster and cheaper than anyone could ever hope to in Canada. It prompted a sustained argument with B.C. shipyard workers. He responded by ordering a smaller ship from a provincial shipyard.
Hahn also persevered for the next several years in a successful effort to win a big federal rebate on the taxes incurred in buying foreign-built ships. He also found time to swing a complicated real estate deal that resulted in a new high-profile headquarters for the company in downtown Victoria.
Through those and a dozen other major changes, Hahn was the face of change. In a province where a legislator once grilled a cabinet minister over the napkins used on the ferries, none of them went unnoticed.
The first question at the first open annual general meeting of the new ferry corporation was hollered from the back of the room: "How can you corporate criminals sleep at night?"
The trouble is that all the changes cost money. Fares rose regularly, then gas prices jumped, resulting in fuel surcharges that sent fares soaring.
Then Hahn's huge million-dollar compensation package and lavish pension, which were previously secret, were disclosed.
It's been clear for a while that the Liberals were growing tired of the continuing controversies.
They publicly complained about his salary and ordered an audit that rapped the salary structure. (Hahn called it "biased craziness.")
They forced the company to comply with freedom of information requests and rewrote the legislation to force some vague changes that the independent commissioner is now trying to figure out.
Faced with sailing against the prevailing winds until the end of his contract in 15 months or opting out, Hahn made his call Tuesday.
Now the Liberals have to make their call. Everyone knows where the individual ships sail. The government has to figure out where the fleet as a whole is going.
Just So You Know: Disclosure - I volunteer in co-ordinating a charity golf tournament for which B.C. Ferries is a title sponsor.
lleyne@timescolonist.com
Read more: www.timescolonist.com/business/Leyne+Hahn+going+ferry+pain+just+starting/5469225/story.html#ixzz1ZGN17XsJ