Another one bites the dust

Is there any reason to be cheerful about the sale of Stelco to U.S. Steel? Some would argue shareholder value has been enhanced and jobs saved. But 1,000 jobs have already been lost in the past year as the turnaround team whipped the place into sufficient shape for an auction.

That makes all four major Canadian steel companies sold off in the last 18 months to foreign buyers. Dofasco, IPSCO, Algoma and Stelco are all gone taking with them millions in government tax write offs over the years and, in the case of Algoma, two time-consuming court-ordered runs at salvation.

Steel is just the latest sector to perform in this mediocre way that, to me, makes two sad statements about Canadian business leaders:

• they lack management expertise to run competitive enterprises in a global environment;
• they’re frightened to bulk up and become acquirers, preferring instead to run things just well enough to attract a buyer from abroad.

The flip side of such second-rate performance is that too few CEOs are willing to take a chance beyond our borders. Canadian banks whine about the need to merge at home, a risk-free proposition if there ever was one, while the Royal Bank of Scotland aggressively expands around the world.

Sole exception to this endless season of lassitude is Dominic D’Alessandro of Manulife with his successful takeover of John Hancock. In the dozen years he’s been in charge, Manulife’s value has gone from $2 billion to $60 billion.

As for the so-called men of steel, they’re not good enough for scrap.