Entrepreneurship: business and government.
MR MAGERMAN: Good evening. Sorry for interrupting the dessert portion of the meal, but can everyone in the back hear me? Is the microphone working back there? I don't know. Thank you. It is working? I am getting nods from the back, so I think it is working.
If you haven't met me already, or if you weren't paying attention when we met, my name is Chuck Magerman, and I practice corporate and finance law with Baker & McKenzie's Toronto office, where I head up the corporate finance practice group in Toronto.
I have been asked, and it is my pleasure to be here tonight, to introduce the Mayor of Windsor, Eddie Francis, who will be making comments to you about--I don't want to steal his wind--but about entrepreneurship and about government and the relationship between the two.
If you haven't read the bio in the book, I may add a little bit to that. Francis was elected as a councilor in 1999 in the City of Windsor, and he was the youngest ever elected at age 25. (1) You can do the math and figure out how old he is now.
He was re-elected as a councilor again with the largest majority ever in 2000, (2) and you may wonder why was he elected in such a short period, but the 1999 election is a by-election. (3) And then he was elected in May 2003. (4) After he was elected as a councilor, he entered law school at the University of Windsor, and he was called to the bar and belongs to the Law Society in Canada and here in Ontario.
Before politics, however--and this is what makes him especially qualified to speak to us this evening--he, together with his brothers, successfully built a pita bread company that grew. This is Royal Pita that grew and was distributing to twelve states and various parts of the province.
And I think he is going to tell us a few stories about that and his experience with that business. And you may want to know one of the questions we were dealing with this afternoon is when do you decide when it is time to sell, and when do you know when it is a good price, at what multipliers. You can get into that if you like, Mayor.
So the question is: will he be talking to us tonight about entrepreneurship, business and government as the topic reads, or will he be talking about entrepreneurship leading to government positions or how entrepreneurs can access government funding?
We have many choices, but I leave it to the Mayor, and I welcome you.
Hon. Eddie Francis *
MAYOR FRANCIS: Thank you, Chuck. Thank you for that kind and warm introduction.
And I have got to admit right off the bat, as a politician, having someone copy each and every single word makes me nervous, but it is good to be here. And part of my discussion this evening will be a discussion focused on, obviously, entrepreneurs, and given my position as Mayor of the City of Windsor, how entrepreneurs play a role in the government if it does have a role to play at all.
But first and foremost, I would like to recognize and thank Henry for having me and inviting me here. I know that you had a great couple of days of discussion, and it has been a great program thus far. Now, it is odd for me to be standing here, and I told my wife I was going to be here speaking to each and every one of you. Here you have an individual that was in private business as an entrepreneur, then became a lawyer and ended up in politics - eating chicken dinners and spending long hours and low pay that attracted me to politics. And I told her there is going to be a group of lawyers, and she said, "Good. Get one of them to represent you to sue you for being a fool to go into politics."
To give you some background in terms of how it all became possible for me to represent the City of Windsor--which is a true honor, something I enjoy every single day--I attended the University of Windsor Law School, and I did my undergrad at the University of Western Ontario.
Doing my undergrad at the University of Western Ontario in chemistry, biochemistry in my fourth year, I had intentions of going into practice and to research. Growing up in high school and grade school, I was a student of the sciences, and that's why I did biochem.
But my parents had emigrated here from Lebanon in the early 1970s; and they immigrated to Windsor. My father, after putting in his time in Kelsey-Hayes and some of the plants, he was trying to find a meaningful way to make some money and raise a family, and he discovered there was something that was missing in the Southwestern Ontario area.
There is a large Arab population, both in Southwestern Ontario as well as in Michigan and even in Ohio. (5) But all of them were still making bread in their own kitchens and their own ovens. So my father established the first pita bread operation in Southwestern Ontario in the early 1970s, and he only catered to the Arab population because that's all he knew.
In the 1990s, he decided to retire. Here is an individual who worked 16 hours a day, seven days a week, and he decided to retire. He had no hobbies; he knew nothing else but to work. Growing up, we grew up in the family business, so when we wanted to see our family, we went to the family business to see them. When our friends were doing things on the weekends or having parties or taking in extracurricular activities, we were growing up in the family business doing what we had to do as part of our responsibilities. So he retired for two years and then decided to get back into it in 1997 as I was deciding where my future career was going to be after my undergrad.
He bought the building. He bought the machines. He was about to get started again, and then he fell ill. So I was asked, being the oldest, to come down and run the family business. I thought it would be a summer job, which was great. And growing up in the family business is not that hard, right? I grew up in it. It seemed pretty easy. The machines did everything, and the workers were there, distributed the product. It was just flour and water, and the rest is simple. After all, for years he had been making a living doing this; he had taken care of us, raised three kids, and provided for us. It can't be that hard.
So I decided to come down, take a summer leave, graduated from Western, decided to come down and run the business, and that's when I discovered something. I discovered that, although my dad was very good at what he did, my father was very smart at what he did. He only catered to one aspect of the market, and that was the Arab market. You can't blame him for it because he did a good job.
So my brothers and I decided that we could take this to the next level. And again, that was 1997. This is 1998. This is before the Atkins diet. This is before the carb craze. This is when people were starting to discover pita. McDonald's even had pita on the menu. (6) Subway was getting into flatbreads. (7)
When I went to school, when I was growing up, I was the only kid with a rolled sandwich where everybody else had these thick-layered Italian sandwiches. Nobody knew about pita growing up. But in the late 1990s, when we decided to get into the business, everybody was starting to discover the health consciousness and the understanding in terms of what pita was.
So my brothers and I wanted to exploit that. We wanted to take it to the average citizen. We wanted to take it to the Canadian and American marketplace, outside of the traditional Mediterranean-Arab marketplace. So we said we are going to do that. So we got the business.
We started running it, and we ran into a couple of problems. Back then, when we first started--I was 22 years old, my next brother Roger was three years younger, and Frank was 16 years old. We ran into some problems.
Growing up in the family business wasn't as easy as it appeared to be. We couldn't find anybody to supply us with our raw materials. The flour companies did not want to give a group of young guys a credit line. They didn't even want to supply us with product. The banks didn't want to give us money.
We were going to make a pitch to the Costcos, to the Sam's Clubs, to the Wal-Marts, to the retail markets. A 23-year-old kid sitting across the table from you, you are not going to take him too seriously. You are not going to give him shelf space in your retail establishment, especially with all the competition.
So we came up with a pretty innovative product mix. What we did was we were going to take pita bread to the next level in the sense of recognizing that it was not a specialty product. It is only flour, water, sugar, salt and yeast. You go to the store and buy a pack of five of pita bread, it is like four dollars. It cost us 30 cents to manufacture and produce it. Yet, people were still selling it at four dollars, and that's because people were treating it as a specialty product. So we said we were going to go with a product that was an accurate reflection of the cost. We were going to market it, fresh every single day, and produce the product and get the pita into the stores.
Again, to go back to my original point--we didn't even have the flour. I couldn't get the flourmills to supply us with flour. So we approached Costco, and we said to Costco--you have all been at Costco, fight? You know Costco sells flour? So we said we are going to go to Costco, and we are going to say to Costco, "We need some flour. Will you supply us?"
And in return, we are going to ask them to carry our product for us. So we went into Costco, we scheduled a meeting. It was the biggest meeting ever, again I was 23, 24, right? Put on our best suits. This is our first pitch we ever made, and we go to Costco and said to Costco, we are owners of Royal Pita. We want to buy flour from you. In return, we want you to carry our product in all of your stores. We want access to all of your stores, and I am going to guarantee that we will buy flour from you. Costco said okay, sounds good. How much flour do you guys need? I said one bag a month.
That was exactly their reaction.
I said to them, though, give us a chance, and I promise you that bag will turn into something larger. Within a matter of months, Costco let us in. We got access to their stores. Within a matter of months, we took that one bag and turned it into 22 tons of flour a week.
Because of Costco we were able to get into other retail outlets, and because of that, we grew on that same type of formula. And from the very day that I started till the day I sold my business, Costco was the only supplier of flour to our business, although the other flourmills started coming around. We used 22 tons a week.
We grew up on the same type of premise--whether it was in Windsor, Ontario; in Detroit, Michigan; in Toledo, Ohio; or in Atlanta, Georgia--we went in with the same type of philosophy. We are going to provide you with the best product there is at the best price.
And what we were able to do from a Windsor location, from a Windsor plant, was produce 7,000 packs an hour, ship them down to Atlanta in less than 24 hours and out-compete the bakeries that were in the Atlanta area.
I could get my product--anybody from Atlanta here? Farmer's Market? Are you familiar with Farmer's Market? I could get my product to Farmer's Market quicker and cheaper and in better quality than the bakery around the corner could, and that--
But it just didn't happen overnight. And I will never forget how we started because when we were doing the first Costco lines, remember we are a new product and showed up with four or five bags. We were delivering in our Ford Escort backing up into loading docks with these big competitors, right? You got the Westins and the Dempster's in Canada. (8) Here you have different Wonder Bread companies that distribute. (9) So these guys were backing up and piling up stacks and stacks and stacks of trays of bread, and we are just walking in with four packs of bread, and we knew we were going to out-compete them. But that's the prize of entrepreneurs, and that's what you have heard over the past few days--an entrepreneurial spirit that gets you up and wants to make you compete and makes you want to do better.
That's the same thing that led us to get involved in Royal Pita and also led us to get involved in our community. Royal Pita in Windsor, I got involved in the community. I will never forget, I was at a wedding a couple months before we opened Royal Pita, and we opened up Royal Pita on a street called Wyandotte Street. Wyandotte Street traditionally didn't have a good reputation. That's where all the drug dealers were, where all the hookers were, the prostitutes. That's how we got a good deal on the building. We bought the building with the vision that once we buy this and establish this business, we were going to be able to turn around the entire community.
And the wedding I was at, I remember someone asked, "What do you do?" and I said we were about to start a business. They asked where I was located, and I told him, and just like the people at Costco, they laughed. But we got involved in our community through our business. By one entrepreneur locating on a desolate corner that others would not even pay attention to, it served as a catalyst for other entrepreneurs to do the same thing, because it only takes one. It always takes that first person to lead to the other investment, for others to follow.
I am happy to report, today Wyandotte Street is a whole different street. (10) In a matter of six or seven years it is now known as Mediterranean Row. (11) You have tons and tons and tons of storefronts that have been filled now by immigrants that, otherwise, would not have filled them--from bakeries to retail stores. (12)
So what happened was, in 1999, as we were doing that, as we were developing that, we got involved in the community, and we were fortunate enough, my brothers and I, to be recognized by the Chamber of Commerce. I recognized my brothers because they still give me grief, to this day, because I take all the accolades--but we were recognized as "Young Entrepreneur of the Year," and that was in February of 1999. (13)
In June of 1999, there was an opening on city council and there was a bi-election that was open. This is a true story. Because of the profile that was gained through the "Young Entrepreneur of the Year" award and our work in the community, I was on my way to do a product pitch, and I got a call from a reporter at The Windsor Star.
She asked me if there was any truth to the rumor. And I said, "Truth to what rumor?" She said, "You are running for Windsor City Council." I said, "Excuse me, who are you again?" She said, "My name is Granell--my name is Margaret Granell from The Windsor Star." I said, "I don't know what you are talking about. Thanks, good talking to you." That was it.
Next day in The Windsor Star there was my picture with 15 others "Rumored to Run." Well, I thought about politics, but I never thought about running for politics. I was 25 at the time. I just applied to Windsor Law School and just received my acceptance into Windsor Law. So my career was to go practice law in the City of Windsor, go be a lawyer and contribute to the community.
But then, it happened again--same thing that I experienced growing up, the same thing I had to deal with starting Royal Pita--goes back to people not leading young people, they are not investing in young entrepreneurs, and I started to hear that he is good. And so I decided to run, and fortunately for me, we put on a strong campaign.
My campaign team was a campaign team of three: myself and two other brothers. The business suffered those couple months, but we put on a strong campaign, and we were not supposed to win.
But then, fortunately, I was elected to represent Ward 5, (14) which is the east end of Windsor. I wanted to apply what I learned through the business to Windsor Council, and I did that, but at the same time I went to law school. And then I became a lawyer, and I had a decision to make.
The decision I had to make was whether I was going to be a lawyer or whether I was going to be mayor of the City of Windsor. My wife and I decided to go away for a vacation, decided to have this most important discussion while we were away, and I had made my decision.
I had four years under my belt as a political representative. Politics is interesting to say the best. It is not for everyone. My hats off to those individuals that can do it, that do it extremely well and do it consistently, but politics is a different sport. It is a different environment than in the business sector. It is different.
And I didn't expect it to be as different as it was. So the decision I had was: I wanted to go and practice law. And my wife looked at me and said, "That's fine. I am 100 percent behind you. I will support you in any endeavor you choose to undertake. But know this: if you decide to walk away, no 'what ifs,' no complaining, no watching councils, no sitting on the sidelines, no Monday-morning quarterbacking." And then she said, "You know, you could be a lawyer any day. You can't be Mayor of Windsor any day."
So I decided to run, and the reason I decided to run is because the City of Windsor--how many of you have been to Windsor? How many are from Windsor? There is always a connection. Thank you.
Windsor is an amazing city, and I am not saying that because I am the mayor. It is an amazing city because of its history, because of its location, and because of its potential. Here is a metropolitan area--350,000--and when I decided to run for mayor, I was facing some critical issues, and those critical issues would certainly set its course in what it would be in the future.
So I saw that as an opportunity to contribute. I wanted to bring my business background, my business acumen, I wanted to bring my experience to change the way things were traditionally done because it always seemed that it was going one way. So I decided to run for mayor, and one of the things I decided was to run on a platform with the same entrepreneurial spirit that carried me. And that spirit was a success for me and my family through the business, and that is: work hard, know what it is you are trying to accomplish, set out the plan to accomplish it, and go and do it--very simple. But I was 29. People don't elect 29-year-old mayors. They don't, right?
So that was the biggest challenge. I was running up against strong competition, years and years of experience on council. But I set a very specific plan. Just like in business, this is where we want to be. We want to be a city that is thriving, a city that is dynamic, a city that is diverse. That is how we are going to get there.
So I started off by mapping out the same thing you do when taking over a business that is going in the wrong direction. You have to get your financial house in order, right? You can't do anything if your financial house is not in order. So I set out, and I said in my campaign platform that I was going to reduce the city's debt by $40 million.
Our long-term debt was projected to be about $272 million by the end of 2006. (15) So I said for my term in 2003, I was going to reduce the debt by $40 million. People looked at me and said there is no way you can do that. It is a ploy. It is a promise. No way. They were right. We didn't reduce it by $40 million; we reduced it by $115 million in our three-year term. (16)
Then we focused on making sure that we had the solvent infrastructure that we needed in place. And one of the most critical things that Windsor had to deal with, if you don't know, is that Windsor is in a strategic location. It is the most important and most valuable crossing point in North America; (17) crossing through the Detroit-Windsor border.
And 28 percent of all trade is between our two nations, Canada and the U.S., and crosses through that gate, $150 billion. (18) It is explosive trade that has taken place over a series of years because of all the trade and the explosive things that have taken place. But it is trade that has taken place on infrastructure built by our grandparents. (19)
And one of the things that you do in business, and that we did in business, in our own business, and that entrepreneurs do all the time, that is, we invest in the business. You reinvest in the business and make sure you have the proper tools and proper equipment to produce a greater product. Why can't the same thing apply to government?
So the biggest challenge we had--we knew we needed a bigger, better infrastructure. Long before we started talking about infrastructure as a way to improve productivity in Canada and the U.S., the Chinese and now other Asian countries and India and all of them have been pouring millions and millions and billions and billions of dollars putting their infrastructure in place, long before anybody knew what they were doing. They were creating the critical supply chains, long before anybody knew why they were doing it. Today with the situation in North America, our ports, they are under extreme pressure.
The critical supply chain between Detroit and Windsor is still trying to do things the way they used to do things 75 years ago. (20) So the border was a key issue for us, and that's something we have been working towards and trying to work on.
I use that as an example in terms of where entrepreneurs can go. The private sector doesn't apply in government. In business, you invest in the infrastructure and get it up to speed, and you make it happen. In government, it has been now--how long, George? I have been there for about seven-and-a-half, eight years. I started there talking about the border, they are still talking about the border, and that has been the difficult challenge for me.
That's why I said earlier that politics is different than business. Politics has a way of really providing you a different perspective in terms of how to get things done. In business, you know what needs to get done. You get it done. In politics, you know what needs to get done; you can't get it done until you get everybody else on the same page, and that takes years and years and years.
I will give you an example: the most important things that we are dealing with, that I know you are dealing with in all cities in all regions in terms of time, from your areas in the cities--how many by a show of hands have all the support and everyone on the same page? By a showing of hands, how many economies are rich?
The way things used to be done, the way that companies used to locate in a city, the way that companies used to locate in towns, the old paper mills would come in, the flour mills would come in, the lumber mills would come in, and when they came in, they would locate and invest in it, and people would follow. People would always follow the jobs.
That no longer is the case. Today's global market, where technology and capital is shifted around the world at the push of a button, it is no longer people following jobs; it is jobs following people. That's where it becomes important for us as politicians and leaders of a community to recognize where the entrepreneurial spirit needs to be at play. Recognizing the change in the trend is important in terms of securing ourselves and moving forward.
People are now choosing where to live based on quality of life, and where the people are, the jobs are going to follow. (21) And this is where it is extremely important because our ability to compete as a city in Canada, or as a city in the United States, is primarily going to be driven on our ability to innovate, in our ability to come up with ideas because nobody else can compete with us there. Everybody else can produce the product, but not everybody can come up with the idea to produce that, right?
So how are we going to attract people to our cities? Because we need to attract these people to our cities. If they come to our cities, if they are living in our cities, if they are raising their families in our cities, then they are going to be coming up with the ideas in our cities.
If it is our cities that are coming up with the ideas, then we are going to have to do competitive damage as we compete with other global forces. The first thing we need to do is recognize that it is no longer city against city, city against town, or neighbor against neighbor. It is region against region, and I am happy to report that government is final getting that. I think it maybe is two, three years too late, but I think they finally realize that they have to work together.
And I think the governor of Michigan uses a very, very good term in terms of describing that, and that's cooperation. And the cooperation that they use instead of the competition that used to be in place is now forcing the cities and towns to work together. So when I talk about Windsor's region, I include Ohio in all my discussions. I include London, Ontario. I include southwestern Ontario, southeastern Michigan, and the Ohio District because, as one region, we are powerful.
And what we have to do is send a message--just like we do in business send a message, we are competing with other customers, right? We are competing with other companies to attract those people but sending the message to attract people to live in our cities because we are investing in a quality of life.
So now it is no longer at the municipal level talking about roads and sewers. It is talking about the arts and cultures, talking about the parks. It is talking about the amenities, talking about the facilities we have involved, because we want those people to come and live in our region.
One of the greatest examples we use is the Detroit-Windsor example. I am perhaps the only city of my size--I don't have professional sports teams, but a five-minute drive across the river, I have got access to all the professional sports. So by attracting those people to live in our city with those amenities gives us an advantage.
And the advantage is how do we take those people, and how do we tap into their ideas? And that's where the universities and the colleges and all these institutions come into play. That's where we come into play, and that's what you heard over the last two days. How do you foster that entrepreneurial spirit? How do you take those entrepreneurial ideas and turn them into product? It is that support mechanism that is required to turn it.
So if we can attract people as cities, we will do our job; we will make our city so livable, create so high a standard of a quality of life that they will come. They will raise their families and will come to live in our cities. Yet, the issue then becomes what is going to be the support network to take those ideas, to turn that routine to product?
The university and colleges play an extremely critical role. Business is playing an extremely critical role. The problem we have at the city municipal level is that we cannot provide them with the type of incentive that they can live with. That's going to have to come from senior orders of government or from another type of collaboration that could take place between the institutions and the companies. That's the key.
On the American side, they are fortunate. On the American side, you have more access to that level of funding, that level of support, than we do on the Canadian side. I remember a story when I was growing up and doing our business, I was collaborating with a business in Boston, and I called up the owner.
And I said to her, "What are you up to, you know, we have got this customer and supply." She was on her way to the White House because she had received funding in the form of a grant to invest in a new line of manufacturing. She had the opportunity to find something.
Today we have, in Windsor, the Auto 21, the ARDC Center and the University all collaborating with each other. (22) Chrysler, GM and Ford, they are collaborating with each other. (23) That level of collaboration, that level of support is required, but the challenge for the municipality is we can't provide it. We will bring the people to our cities. We will bring the institutions to our cities, but that level of cooperation that has happened and is harnessed in an entrepreneurial way, that's going to really be driven by the organizations themselves.
And that's the challenge that we are going to have. That's the biggest challenge we are going to have. So, over the next little while, you are certainly going to hear about cities investing in quality of life, marketing themselves as the best place to live, marketing themselves as being the best place to do business.
You are going to hear about universities and colleges saying come to us, we will provide you with the best education. Come to us, we will provide you the skills and tools that you need, but what we need here, what we want to happen is that network that needs to be established, and that requires collaboration and cooperation.
And from a Canadian perspective, we have a long way to go to do that. I am not sure whether or not on the American side you are there yet. We do have a number of opportunities that are in existence, but I am not sure where that will go. But one thing I am certain of, in today's economic climate, today's environment of three percent growth--three percent new growth in a city in any region is done by 50 percent of the companies that are already in the region.
And that's what we need to have, and that's why cities are always looking to land a big plant--1,500 to 2,000 jobs. That represents one percent of new growth, and you are lucky if you get a plant. So that's what we have to have start happening into what's existing in our own cities and regions. That's going to require this type of dialogue--this type of discussion. Do not expect government to do it.
If I can leave you with one message: do not expect government to do it. Government is too slow to respond to the needs of business, and I know that because it is the biggest frustration that I live with everyday in my capacity as a mayor. It takes way too much longer to bring everybody else on the same page to execute a decision than it does from the private sector.
So it needs to be driven by the entrepreneurs. It needs to be driven by the independent businesses in their respective communities. And that's the key.
And thank you, that's all.
I am perhaps the only mayor that I am aware of--we don't have term limits in Canada--
that is term limited. This will be my last term as mayor because I truly miss private business. I truly miss the flexibility, the ability to get things done as we do as entrepreneurs, and I am truly frustrated at the turtle pace of things in government and the challenges that we face with the gridlock of bureaucracy from time to time.
So moving forward, I would hope that with these types of discussions and I think this is a wonderful opportunity when you bring people together. These types of discussions need to be held because this is how collaborations are established in the true spirit of entrepreneurs. The true spirit of entrepreneurs--the true spirit of businesses--the true spirit will really create the type of movement that we want.
And so I thank each and every one of you for taking time from your busy schedules to be here and participate. I know that you learned a lot and met new people. My hope for each and every one of you in moving forward is that you build on those relationships, and that we actually can work together to get things done. I know I am depending on it as mayor of the city because, as the mayor of the city, it is your ideas and your cooperation that allow us to do it.
So I am available for questions. If you have any questions I would certainly be happy to answer them.
DISCUSSION FOLLOWING THE REMARKS OF HON. EDDIE FRANCIS
DR. KING: Do you plan to go higher?
MAYOR FRANCIS: Do I want to move up?
DR. KING: Do you want to move up?
MAYOR FRANCIS: I could have all the aspirations in the world, Henry, but my wife has other plans. You know, I get asked this question a lot, and my answer sometimes--I am 32.
DR. KING: You have got a long way to go.
AUDIENCE MEMBER: You talked about the enormous amount of trade between the two countries that crosses across the bridge. I was at a conference two weeks ago, and we pondered the thought that if that bridge were ever the target of an attack--what type of emergency preparedness or contingency plans do Detroit and Windsor have to guard against that if, God forbid, it would ever happen, to ensure that trade and commerce would continue flowing?
MAYOR FRANCIS: The issue of the bridge: the bridge in Detroit-Windsor is privately owned. I know that surprises a lot of people. But 28 percent of our trade crosses over a privately owned bridge, (24) and there was actually--there was a discussion group, I believe last year, and there was a question to one of the Coast Guards in terms of, if the bridge is knocked down, what happens to the economy, because we saw that post-9/11 everything came to a standstill.
Billions and billions of dollars were lost at the border because of that, (25) and the question to the Coast Guard official was: in the event that there was an event that took down the bridge or caused problems on the bridge, what would happen?
And I think the response was: we table topped this, and the table top exercise had shown that if the bridge was knocked down, there would be at least a minimum of two weeks of complete cessation of the economy. Think about that. The economy would come to a stop for a minimum of two weeks.
I am not talking about the economy of Detroit-Windsor. The economy between the two countries would be at a stop for a minimum of two weeks. Right now there is a movement afoot to get a new crossing located.
Prior to 9/11, in 1999, the Government of Canada together with the province of Ontario, State of Michigan and Washington established what they call the Bi-National Partnership, and the Bi-National Partnership was charged with the responsibility of looking at the future trends--looking at current traffic to try and determine what would be required to meet future capacity for crossing the Detroit-Windsor corridor. (26)
Currently, there are approximately 9,000 trucks that cross that corridor every single day, (27) and as I mentioned, $150 billion of trade. (28) By 2030, it is projected that 30,000 trucks will be crossing that corridor. (29)
And that's why they began the exercise in terms of trying to establish when the next crossing will be built. Since then, they made some progress. As I mentioned, some of my frustration has been the slow process. In business, you would have had a new bridge up and running. You wouldn't wait for all the things that take so much time.
In government, you have to have a plan, study it, and you have got politics. Right now they are projecting--this partnership is projecting to have a new crossing built by 2013, (30) and they hope to have all the studies done by 2010. (31) And hopefully, there will be a new crossing by 2013.
But again, the challenge that they are going to have--and I can say this because I am not part of the partnership--they have a private owner that is going to do everything to block it. Interestingly enough, there is another point, the Detroit-Windsor tunnel.
In 1930, the Detroit-Windsor tunnel was built as a connection between downtown Windsor and downtown Detroit. (32) When this was constructed in 1930, the individuals that constructed it invested or had the vesting charter 60 or 70 years later, half to Windsor, half to Detroit. (33)
So we own the Canadian half. The City of Windsor owns the Canadian half of the tunnel. (34) It is a vital link because over 5,000 people cross into Detroit every day: nurses, students and automotive employees go to work in Detroit and come back. (35) They use that facility to cross. It is an important aspect to have in our region.
A year-and-a-half ago there was an attempt to try to sell the American half to a private entity, same owner. (36) Perhaps just this past Friday there was an announcement that was made by Mayor Kilpatrick because for the past year we have been negotiating with Detroit. (37) The announcement that Kilpatrick made this past Friday was that we reached an agreement in principal between the City of Windsor and the City of Detroit. The City of Windsor will be acquiring Detroit rights to the operation and management of the tunnel--$75 million for a term of 75 years. (38)
But here is the question that I leave you with, and again, this is where I struggle all the time in terms of being someone coming from the private sector background, from an entrepreneurial background, from a business perspective, you need to do this to protect your investment. If you don't do this, you lose your investment. If you don't do this, you don't provide for us, you won't be able to redirect the city into the future.
It becomes a challenge to communicate that to residents, to see that it is $75 million, number one. That's one issue of struggle.
Number two, why is it that the city, a municipal jurisdiction, is responsible for securing a vital link of national importance? Why should the taxpayer in the city--because again, my revenues are supposed to go--it is very simple. I take in money from property tax. That money that I take in should be used to service that property. It should be used to service sewers, to service roads, to pickup garbage, to provide service to that property. The money isn't intended to provide for the national security of Canada and the U.S. So those border issues are real, and those are border issues that we deal with.
But going back to your point, the reason we do what we do is because when senior orders of government are slow to move, somebody has got to move, and that's where the entrepreneur's background comes into play.
I take donations, too, by the way.
AUDIENCE MEMBER: Thank you for taking the initiative.
MAYOR FRANCIS: Thank you.
AUDIENCE MEMBER: I am glad you included Ohio in the region you govern. We are very similar to Windsor and Detroit. We have a Ford casting plant--builds engines here--have two Ford assembly plants. We built a lot of automotive plants. We have Chrysler, GM, and a lot of people around here are worded because we don't know what's going on in Detroit.
We don't see that there are--people are afraid of losing their jobs, and you are a lot closer to Detroit. And one of the things you said was that there is a reduction in our manufacturing base. We see the CEO of Ford taking $39 million for four months of work while people are losing jobs. (39) People are afraid for their jobs.
Being close to Detroit and being so tied in with the Detroit economy and the regional economy, what do you know about what's going on in Detroit? And how can we preserve some of the jobs--many of the jobs--that we have in this region?
MAYOR FRANCIS: I think our biggest--our challenge is similar to your challenges here because you are dependent on manufacturing and very dependent on the automotive sector. One of the things we have to recognize is that we have to diversify our economy. One thing I do not want to see in terms of all the challenges, all the struggles of the automotive manufacturing industries--one thing that you have to recognize is that this region has a qualified and a very highly-skilled work force. (40)
I don't know of any other people that can take a line change or a new product change and have it implemented in the time that you do it. It is unheard of. The reason they are able to do that is because of the skill set they have. So what we started doing in our city was try to diversify and also change the mindset.
That's a difficult thing to do, but we have gone to the advance manufacturers that otherwise would have been servicing the automotive industry, and we said to them, your skill set can be applied in other industries. To date, we have applied manufacturers--advance manufacturers --that were once only supplying the automotive industry that are now supplying the aerospace industries, supplying airline industries, supplying the medical fields.
Those type of skill sets are applicable somewhere else. Just like in business, I would never give more than ten percent of my business to Costco. What would happen if Costco went down? I would go down. You never put all your eggs in the same basket. And the thing we need to do from an automotive rich region is recognize that we have skill sets that no one else has.
China doesn't have the skill set that our region has. (41) They don't have the same capacity and knowledge and innovation that we have here. (42) What we need to do is recognize that the automotive industry has gotten us this far, provided us with these skills, and just like in business when you change under different circumstances, we have to transition to applying those skill sets to others.
I know it is difficult, and I have had over a thousand laid off from Ford, (43) another thousand from Chrysler, (44) but it is transition we need to work together. One of the things we look for--and I apologize, I am not too familiar with what American programs are available--but one of the things we need to do on our side is take those individuals that have that skill set, allow them to provide the support for the transition, upgrade the skill set, and apply it somewhere else. Because, from our perspective, not only do we have individuals that are in the skill set right now, right now I am third behind Vancouver and Toronto. (45) That's unheard of.
And I have all these people coming into my city, and I need to be able to provide them skills, but I can't do it at the municipal level. R & D is a key thing. I am telling you R & D. You know why the automotive industry is struggling? It is very simple. It is all about product. Those companies that have hot products, those companies selling the product, they come up with great ideas. How do you come up with a great new product? R & D.
The idea goes back to what I was saying earlier. We need to attract people that can have the ability to develop the ideas and then have the facilities to take those ideas and turn them into a product. Those areas, and those regions, that can do that, and this is where the R & D comes in. You need to have the cooperation. I may have somebody that comes up with the idea, but I may need somebody in Ohio to produce it. That's where that cooperation and collaboration comes in because then we can compete.
AUDIENCE MEMBER: You were 23 when this whole thing started. You grew the business, went to law school, went on to council, and now you are a mayor. This is in nine years. So you have done all this at an unbelievable speed.
Do you have any interest in going back to the whole entrepreneurial thing? You keep going at this space, you are going to run out of life times, you know? But it would seem--MAYOR
FRANCIS: I feel like I am 72 on the inside.
AUDIENCE MEMBER: When did you sell the business?
MAYOR FRANCIS: I referenced in terms we have 10 or 11 months in a law firm. So when I went to interview for Articles, I interviewed with a law firm, and they said you are with city council. We are not going to give you a job unless something gives, and I couldn't get off council. I needed the Articles to get called to the bar.
When I began the business and set it up and established it with my brothers, we went in with a goal. Our goal was simple. Those people were out there, and the people we were talking to thought we couldn't do it. And our job was to take out as much of the competition, and we brought so much of that, and it came to a point that our competition was ready to buy us out.
AUDIENCE MEMBER: When did you sell?
MAYOR FRANCIS: In 2002.
AUDIENCE MEMBER: Is your father still alive?
MAYOR FRANCIS: Yes.
AUDIENCE MEMBER: What did he think about this?
MAYOR FRANCIS: My father is from the old country, and you still can't do it fight.
AUDIENCE MEMBER: Would you go back to what I was saying, yourself as an entrepreneur?
MAYOR FRANCIS: I miss it, and what I was trying to convey, perhaps being in government right now when people ask you, there is no way to do it in two terms. I miss it because government restricts the entrepreneurial aspect. I feel so held back from doing what I normally do, and that's being an entrepreneur.
The thing I liked about being a lawyer, you get to be an entrepreneur in everybody else's business, so you learn about so many different clients and different businesses that you are an entrepreneur and in a different business everyday. That's what I enjoyed about the law; it gave me that same type of opportunity to channel that energy.
AUDIENCE MEMBER: You are still young, and you have a chance to be prime minister, but it seems you have that ability.
MAYOR FRANCIS: You realty have to meet my wife. She doesn't want any part of it.
AUDIENCE MEMBER: You may have a chance to make Canada, as an entrepreneur, as a great country of the world. Think about that.
MAYOR FRANCIS: And thank you. That's very kind, but go back to my earlier point: we cannot depend on government to do it. Government will not do it. And again, I am speaking from a very limited experience in terms of my perspective as a mayor. It just takes way too long.
The entrepreneurial spirit needs to be driven by entrepreneurs. It needs to be driven by business and small business, and they will do it. What we need to do as government is be able to provide them the type of support that otherwise they wouldn't be able to get.
I will give you an example. Shortly after being elected--and this is some of the conflicts I face--shortly after being elected, there was an opportunity for us to locate a company, International Truck. Are you all familiar with International Truck? To locate their new R & D center, and Windsor was one of the places, and International Truck was going to make a decision.
I think it was Windsor, Hamilton, London, and Toronto, and they had three R & D facilities they were going to locate. And I asked for a meeting with the powers that be, and I met with them. I just said, "What do you need?" They said, "What do you mean?" I said, "What do you need for you to make your decision?" They said, "We never heard that before."
I said, "Tell me what it is, and if I can do it, I will do it, but what do you need in terms of us providing the support?" They told us. They made their decision, and they are now located in Windsor. As government, we need to be able to approach business and not with the same cookie cutter approach--this is the way it needs to be done.
Their situation may be different than your situation, so what is it for you to do? What is it you need to do, and develop that type of a product, that type of idea, that type of entrepreneurial invention? And if we can provide the support, that's what we need to do. I think we are doing a good job in terms of getting there. Mark is a good example. He does it every day.
AUDIENCE MEMBER: I know that you might be frustrated by your job and how you feel you are constrained in what you could accomplish, but you probably are also saying to yourself, "I accomplished a hell of a lot in the term-and-a-half or almost two terms as mayor." Anybody can be proud of what you have accomplished and is going to be concerned about making sure that the next person who comes in takes what you have done and takes it to the next level. You want to get somebody in there even better than you.
So my question is: what's your sense of the landscape, the political landscape in the Windsor area, apart from your two brothers, in terms of talent that can make it look like you were only half as good?
MAYOR FRANCIS: You must have been talking to my two brothers.
I think the best--I am confident--let's put it that way. I think if anything, when somebody comes into the office and is able to accomplish something, set the bar high and hope somebody else will do better, I am confident that will happen. Any good person who steps into a political office sets things in place that you would hope would serve as the building blocks.
And if anything, I would hope that by being a nobody that was fortunate to be elected, that has inspired or has given reason for others to move forward that otherwise would not have considered politics but can now consider politics.
So I would hope that my example--and that's why every time I have an opportunity to speak I say you don't have to be a politician to run for office. You just have to have dedication and passion and the commitment to do a better job than the next guy. I hope that after I am done the next person that comes in, within a year they forget about me because the next person is that much better.
AUDIENCE MEMBER: What personality traits attract you in succeeding, and if you don't have those, can you still have those by having a good plan and executing it?
MAYOR FRANCIS: It is a good question. Believe it or not I am a very shy individual. It is true. So the personality--you know what? I have never been asked that question in my career. The personality traits, I think, that have helped me are being able to be very--and this comes from my science background--science, they teach you to be very methodical, right? Know what your end result is going to be. Map out how you are going to get to your end result, and that's the same thing I applied in business.
The same thing I applied in my career as mayor. I am methodical in terms of establishing a long-term, direct, knowing where it is I think we need to be, developing a plan and sticking to it. Oftentimes you will get politicians that get swayed one way or the other, and it just doesn't happen.
You stick to it, and if you believe in your plan so much that it is the right thing to do, you just get it done. Patience is a key thing for me, and I still struggle with patience sometimes.
Session Chair--Charles Magerman
Speaker--Hon. Eddie Francis
(1) Speaker Biographies, University of Michigan: Ford School of Public Policy IPE 2006, http://sitemaker.unfich.edu/ipe2006/speaker_biographies (last visited Oct. 19, 2007).
(3) PM Calls By-Election in Windsor-St. Clair, CBC NEWS, Mar. 7, 1999, available at http://www.cbc.ca/canada/story/1999/03/07/windsorbyelxn990307.html.
(4) Biography of the Mayor, The City of Windsor, http://www.citywindsor.ca/000087.asp (last visited Oct. 19, 2007).
* Prior to entering politics, Mayor Francis ran and operated Royal Pita Baking Company. His operation's distribution quickly grew to include Ontario and 12 U.S. states. In 2003, he was awarded the Windsor Chamber of Commerce Business Excellence Award as the Young Entrepreneur of the Year. Mayor Francis graduated from the University of Windsor Law School in 2002 and articled with Miller, Canfield, Paddock, and Stone. Subsequently, Francis was called to the Bar of the Law Society of Upper Canada. Mayor Francis also holds a combined Honours Degree in Chemistry and Biochemistry from the University of Western Ontario.
(5) See Federal Electoral District Profile of Windsor West-Windsor-Ouest, Ontario, (2003 Representation Order), 2001 Census Map, Statistics Canada http://www 12.statcan.ca/english/census01/products/standard/fedprofile/ RetrieveTable.cfm?R=FED03&G=35102 (last visited Oct. 19, 2007); G. Patricia de la Cruz & Angela Brittingham, THE ARAB POPULATION: 2000, 4 (U.S. Dept. of Com. 2003), available at http://www.census.gov/prod/2003pubs/c2kbr-23.pdf.
(6) But see David Leonhardt, McDonald's Can it Regain its Golden Touch?, Bus. WK., Mar. 9, 1998, http://www.businessweek.com/1998/10/b3568001.htm (stating that Wendy's was using pitas as a way to compete with McDonald's).
(7) See Bruce Horovitz, Subway Wraps Up Deal With Atkins, USA TODAY, Dec. 25, 2003, available at http://www.usatoday.com/money/industries/food/ 2003-12-25-subway-atkins_x.htm.
(8) E.g., Dempster's, http://www.dempsters.ca (last visited Oct. 19, 2007).
(9) E.g., Wonder Bread, http://wonderbread.com/index.asp (last visited Oct. 19, 2007).
(10) See A Closer Look at Wyandotte Town Centre, NEWS LETTER (Wyandotte Town Centre Bus. Improvement Ass'n, Windsor, Ont.) Oct. 2007, available at http://www.wtc.cc/wtcpagel.htm.
(11) Id. See also Business and Retail Zones: Zone 1--Wyandotte Towne Centre, Windsor Essex County Development Commission, http://choosewindsor.com/source/html/comm/ zone01f.htm (last visited Oct. 19, 2007).
(13) Biography of the Mayor, supra note 4.
(14) Speaker Biographies, supra note 1.
(15) Compare, Eddie Francis, Mayor, City of Windsor, Chamber of Commerce Mayor's Luncheon Address: Building a More Competitive Windsor, at 3 (May 31, 2006), available at http://www.citywindsor.ca/documents/CouncilServices/Mayor/ BuildingaMoreCompetitiveWi ndsor.pdf (stating that at that time the debt was projected to be at $276 million by the end of 2006).
(16) Biography of the Mayor, supra note 4.
(17) See Monica Davey, Bridge's Private Ownership Raises Concerns, NY TIMES, Oct. 12, 2007, available at http://www.nytimes.com/2007/10/12/us/12bridge.html? ex=1349841600&en=1142494dabdde901&ei=5088&partner=rssnyt&emc=rss.
(18) See id.
(19) See e.g., Construction, Ambassador Bridge--History, http://www.ambassadorbridge.com/history/construction.html (last visited Nov. 29, 2007).
(20) Davey, supra note 17 (stating that the Ambassador bridge is almost 80 years old); see also Construction, supra note 19.
(21) See Alexander C. Vias, Jobs Follow People in the Rural Rocky Mountain West, 14 RURAL DEV. PERSP. 14, (1999) available at http://www.ers.usda.gov/publications/rdp/rdpsept99/rdpsept99c.pdf.
(22) See example, Discover Windsor, http://www.visitwindsor.com/main.htm (last visited Oct. 15, 2007); Ontario Yours to Discover, http://www.ontariotravel.net/TcisCtrl? site=consumers&key1=home&language=EN (last visited Oct. 15, 2007).
(23) See e.g., U of W Hosts Auto21, University of Windsor, Engineering News, http://www.uwindsor.ca/units/eng/news.nsf/tovr/ 10974A3C9ED28F1185256CD0004B0615 (last visited Oct. 15, 2007); see also University of Windsor/DaimlerChrysler Canada Automotive Research and Development Centre, DaimlerChrysler Canada, http://www.chryslercanada.ca/CA/03/EN/CORPORATE/ 1,,CA-O3-EN-CORPORATESOCIALRESPONSIBILITY-4_AUTOMOTIVERD.html (last visited Oct. 15, 2007); Welcome Auto 21--A Network of Centres of Excellence, Auto 21, http://www.auto21.ca/home_e.html (last visited Oct. 15, 2007).
(24) See Davey, supra note 17.
(25) See id.
(26) See Canada and Ontario Improving Safety at Windsor Border, Government of Ontario, Canada, Ministry of Transportation, http://ogov.newswire.ca/ontario/GONE/2005/05/27/ c4137.html?/match=&lang=e.html (last visited Dec. 4, 2007).
(27) See generally OCC BORDERS AND TRADE DEVELOPMENT COMMITTEE, COST OF BORDER DELAYS TO ONTARIO (2004) available at http://occ.on.ca/Policy/Reports/121 (discussing traffic and trade dollars crossing the United States, Ontario border including the Detroit-Windsor corridor).
(30) See Press Release, Ministry of Transportation, Windsor-Detroit International Crossing Canadian Environmental Assessment Phase Begins (Feb. 15, 2005), http://www.tc.gc.ca/mediaroom/releases/nat/2005/05-gc003e.htm
(31) See generally id. (discussing the beginning of studies in regard to building a new Detroit-Windsor crossing).
(32) See A Vision for the Future, The Detroit and Windsor Tunnel Corp., http://www.dwtunnel.com/history.html (last visited Oct. 17, 2007).
(33) See generally id. (providing a detailed history of the Detroit-Windsor Tunnel).
(34) Surface Infastructure [sic] Programs-Bridges, Transport Canada, https://www.tc.gc.ca/Programs/Surface/bridges/menu.htm (last visited Oct. 17, 2007).
(35) See id.
(36) See generally Firm Issues Bid for American Side of Detroit-Windsor Tunnel, Today's Trucking Online (June 1, 2007), http://www.todaystrucking.com/newscenter.cfm?pageaction= story&intNewsCenterID=3&intDocID =17993 (discussing different bids for the Detroit side of the Detroit-Windsor Tunnel).
(37) Letter from Kwame M. Kilpatrick, Mayor, City of Detroit, to the Detroit City Council (Apr. 12, 2007) http://www.ci.detroit.mi.us/budget/2007-08_Budget/Message/Mayors_%20 Speach.pdf (discussing Detroit's agreement with Windsor regarding the operations and use of the Detroit-Windsor Tunnel).
(39) See Ford CEO: $28M for 4 Months Work, CNNMoney.com (Apr. 5, 2007), http://money.cnn.com/2007/04/05/news/companies/ford-execpay/.
(40) See The Honorable Sandra Pupatello, Ontario Minister of Economic Development and Trade, Why Isn't Ontario, Canada, Facing a Skilled Labor Shortage? INDUSTRY WK. (Apr. 4, 2007), http://www.industryweek.com/ReadArticle.aspx?ArticlelD=13882.
(41) See generally Human Resources Trends, The US-China Business Council, http://www.uschina.org/info/china-briefing-book/hr_backgrounder.html (last visited Oct. 17, 2007) (discussing China's shortage of skilled labor).
(43) See Chris Vander Doelen, 1,275 Auto Jobs Wiped Out, WINDSOR STAR, Apr. 5, 2007, available at http://autos.canada.com/news/story.html? id=f3dce016-9f17-42f5-9cdf-e2c110d9baeb.
(45) See generally Allan Rock, Remarks at the Windsor Innovation Summit (Sept. 12, 2002), http://www.innovationstrategy.gc.ca/gol/innovation/site.nsf/enlin02464.html (discussing the Canadian government's plan to strengthen the economy in part through building and maintaining a skilled and knowledgeable workforce).
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|Title Annotation:||Canada-United States Law Institute Annual Conference on Comparative Legal Aspects of Entrepreneurship in Canada and the United States|
|Publication:||Canada-United States Law Journal|
|Date:||Jan 1, 2007|
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