When I was working for a computer company back in the 1970s, our manufacturing manager came into my office one day with an idea. He had looked ahead at our manufacturing situation and all he could find was bad news. The markets were changing. Desk top computers were popping up in our offices to do accounting and even the word processing for my department. He wanted some government money to develop a new product for his manufacturing teams.
His idea was what were called work stations at that time. He figured that a bare bones development of a miniature work station might cost as much as $50,000. I shook my head. I explained to him that the project had to be related to keeping his plant growing and creating jobs. And besides, if we were not talking in millions, the government would not be interested.
Only today, you have to be talking billions. The batteries for electric vehicles are the latest buzzwords in government support. And as these companies need to build special plants to produce these batteries, the provincial government can be included for its support. It is all done in complicated tax incentives and financial supports.
Back in the 70s, the plant manager and I worked up a deal worth $100 million. All we wanted from the feds was cash to the extent of $40 million. That was the proposed cost of the hardware and we would find the other $60 million to develop the initial software needs of this new product. We got a lot of skepticism from the company’s head office in Minneapolis but they signed off on our proposal. And I got the okay to take the proposal to Ottawa. There were a couple Silicon Valley start ups in California heading in the same direction and we needed to move fast.
It might surprise the reader that no politicians were involved in the transaction. I did the whole deal in one department with sign-offs from the deputy minister, assistant deputy minister and director general. I even had an old friend who worked for the department involved to do the due diligence on the proposal. He spent an entire day grilling me on the ins and outs of the deal. It was a Friday, so the Ottawa day ended at 4 pm. He ceremoniously handed me a government of Canada cheque for $24 million as the down payment. I caught my flight back to Toronto and went home with that cheque in my briefcase for the weekend.
This was never a success story. The Minneapolis company was bought by one of those Silicon Valley start ups and I heard they gave all the money involved for the project back to the Canadian government. I had already moved on to other challenges.
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