If all ends well in this affair, the Shell Canada oil refinery in east-end Montreal will be sold to a buyer with deep enough pockets to keep the thing running and 400 jobs will be saved. But even though a well-heeled prospective buyer is in the picture, the factors in play and what has transpired so far weigh heavily against that happy outcome.
This would be doubly unfortunate, not just for the loss of jobs, but also because Shell doesn't deserve to be cast as the ogre it has been by the union involved and some politicians who took nasty runs at company reps at a parliamentary committee meeting this week. Shell is, after all, not a benevolent society. It is in the oil business, not the job-creation business. Its primary mission in a competitive field of enterprise is to make a profit on its operations as well as it legally can, and the hard fact is that the Montreal refinery as it is has become not just unprofitable but by and large clapped out after 77 years in operation.
It has been suggested that Shell hasn't sold the facility because it doesn't want to let in a competitor to take the place over, but Shell did put it up for sale and close to 100 potential buyers, including Shell competitors, took a sniff -some even a deep breath -and said no thanks. More off-putting than Shell's bottom-line asking price of $150 million has been the $600-million investment in refurbishment necessary to keep the refinery operational. The current prospect, Delek U.S., a subsidiary of an Israeli holding company, came on the scene only after Shell was squeezed by a court order to keep bidding open until September. If no deal is struck, Shell plans to convert the facility into a distribution centre for gasoline it would ship in from the States, a function that would require only about 30 workers.
Delek has so far offered $110 million for the refinery and said it would invest $800 million in upgrading over 10 years, and on that there could be give and take. But then as part of the deal, Delek is holding Shell up to selling it its distribution network in Quebec and the Atlantic provinces, something Shell has not envisaged. Negotiations have another month and a half to run, but Shell has every legitimate right to turn the offer down if it finds it's not in its best corporate interest.
Unfortunate as that would be for the present workforce, what should absolutely be avoided in this affair is government involvement and pouring public money into what might be yet another misbegotten attempt to revive a dysfunctional enterprise in the name of job preservation, a lesson that should have been soundly ingrained by the multimillion-dollar Gaspesia paper-mill fiasco.
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