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2012-06-28 at 13:59

Sudden closure

By Leith Dunick, tbnewswatch.com
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After taking hundreds of thousands of dollars in government funds, Tornado Medical Systems appears to have abruptly closed its doors in Thunder Bay.

Company CEO Stefan Larson, reached by phone in Toronto on Thursday, confirmed to Thunder Bay Television the research company’s Thunder Bay laboratory, located on the refurbished sixth floor of the Whalen Building, is no longer open for business.

He refused further comment, as did Steve Demmings, who heads the Thunder Bay Community Economic Development corporation, when contacted Thursday afternoon. The CEDC was instrumental in bringing the Toronto-based company to Thunder Bay.

When media arrived at their Thunder Bay office, a lone employee was manning the front desk, and told a Dougall Media reporter there would be no comment until at least Friday.

Mayor Keith Hobbs, in Quebec City for talks on the Great Lakes, hadn't even heard the news when contacted by TB Newswatch. Needless to say he wasn't happy.

"It is pretty bad when I have to hear this from a media source This comes as a shock to me. Tornado Medical Systems is a huge cornerstone to the research cluster in Thunder Bay. They will be missed."

In March FedNor Minister Tony Clement announced a loan of $363,348 to the company to help develop a prototype of an imaging device that would allow surgeons to scan breast tumour tissue that’s been removed to ensure the cancerous tissue was completely removed. Renovations to the the sixth floor of the Whalen Building cost an addtional $1.1 million, money provided by the Northern Ontario Heritage Fund Corporation.

Tornado Medical Systems released an official statement Friday.

In the statement, the company confirms that it had laid off nine engineers, including six from Thunder Bay, as part of its restructuring of one of its product development projects.

The company statement adds that the specific project is partially funded by loans from the provincial and federal governments. All other aspects of Tornado’s business remain unaffected, including collaborations with the Thunder Bay Regional Research Institute.

The company was launched in 2009 with the goal of transforming cancer care.

Along with the Thunder Bay Regional Research Institute, it was also one of the crown jewels in the city’s plan to transform its economy from resource- to knowledge-based.

At the time company officials promised 50 jobs to start, with as many as 300 being created by 2013.
 
 

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Comments

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advocate says:
ffs
6/28/2012 2:25:50 PM
Glyder says:
oops
6/28/2012 2:38:01 PM
cachinnate says:
That was short lived.
I hope there is some accountablilty for the funding provided to them.
6/28/2012 2:43:37 PM
vimeo says:
It will be intereseting to see what the Northern Ontario Heritage Fund (NOHFC) have to say about this. They say their loans and grants have to be repaid in full if the compay goes belly up in two years.
6/28/2012 3:02:41 PM
Rob20 says:
So what, they can just waste tax payer money and jump ship without explanation after they were invested in to generate jobs here?

I guess Watkins will be suing them next on behalf of TBay... (sarcasm)
6/28/2012 2:44:40 PM
no1knowsmyname says:
Is that a typo...or did the CEDC know this on TUESDAY (see article). Or did tbnewatch mean THURSDAY?

Details are important!
6/28/2012 2:59:17 PM
homelessteen says:
Step 1 -start a corporation
step 2 -get goverment funding
step 3 -pay the executives
step 4 -take the money and run

The knowledge sector business plan.
6/28/2012 3:00:09 PM
doughboy says:
This seems like Global Sticks all over again??? I have to have a complete background, credit check to buy a used car and these places make friends with the CEDC, get them to apply for funding for and with them, and they bail. Nice.
6/28/2012 3:14:30 PM
unknowncronic says:
there needs to be clauses set in place to protect the monies given out from the Northern Ontario Heritage Fund Corporation.

its taxpayer cash spending at its finest
6/28/2012 3:22:16 PM
yqtyqt says:
Accountability from the senior levels of government - where is it? Does nobody in government take a realistic look at the business plans of these dreamers. Or are they all hoodwinked by these slick and shadey promisies.

This is happening far too often. Borrowing from our grandchildrens future tax revenues, promises to employ massive numbers of employees, pay the executives great salaries, make more promises, borrow more money and then fold and leave the city, the employees and the government high and dry.

Accountability please!!!
6/28/2012 3:30:30 PM
The Badger Mountain Hermit says:
I could have used that cash for MY project. Who do I have to bribe with a kick-back?
6/28/2012 5:39:21 PM
advocate says:
Have you applied for a grant? There are many places to get them. NOHF, Fednor, Paro, etc.
6/28/2012 6:09:21 PM
Chaos says:
CEDC is proving to be a failure. 1 million in reno's just 1 year ago. Tax dollars up in smoke. Someone should lose their job.
6/28/2012 7:00:14 PM
Chaos says:
City better call in its loans to Regenerative Medicine.
6/28/2012 7:27:19 PM
jimmyboy says:
Just a scam...this firm was so full of B.S. and the CEDC and our mayor and city council swallowed it all hook line and sinker...talk about taking it in the rear end...only in Thunder Bay...I hope all those involved like eating crow.!
6/28/2012 7:37:09 PM
waterunderthebridge says:
Better than giving money to a pulp mill or a sawmill and have them go into receivership and leaving another bunch of subcontractors who deliver wood and supply services holding the bag. I wonder if anybody is holding the bag - maybe Staples for copy paper etc.
6/28/2012 8:00:38 PM
sam says:
This is very disappointing, but not surprising.

The city got conned again, and like Chaos says, Regen Med will be next.

We need sharper people at the CEDC.

6/28/2012 8:03:49 PM
barry medawin says:
Cha-Ching!
6/28/2012 10:54:50 PM
meta says:
Tornado gone after big money spent on renos
DSSAB leaves 4 floor empty in January, moves to 15 million dollar south side building palace. Total waste of tax payer money!!! and even poorer service. Go there and take a number like some cattle while you wait 1/2 hour to be seen by staff that has no clue what they are doing!!

How much more can the tax payer support these empty unused space and renovation costs?
6/28/2012 11:39:12 PM
jd says:
The new word for the day is Austerity. It starts with cutting government jobs, then funding for things that need government funding to get started, then programs that have been in place for years and it ends in wtf just happened when everything is privatized and we much more for services that were once free.

6/29/2012 12:22:14 AM
homelessteen says:
News Flash - goverment services aren't free they are paid for by our tax dollars.

Definition of free- Adverb, without cost or payment
6/29/2012 9:40:10 AM
jd says:
You are correct they aren't free, the gist of what I mean is that services that were once covered by our tax dollars now require us to pay again as we use them or are privatized with no reduction to how much we pay in taxes.
6/29/2012 12:31:12 PM
homelessteen says:
My opinion on the push to privatize stems from the goverments inability to raise taxes to keep pace with all the goverment raises from top to bottom. Leaving no option but to cut services.
You tax the rich - they move and take their company
You tax middle class - you don't get votes
You tax the poor with out raising min wage you starve your labor force.

If a private company can do it just as well cheaper then why not.

Just stop bank-rolling every bunch of smuckes with a power point just because the fiscal is about to end and you don't want your dept budget to get cut because money is left over at the end of the year.



6/29/2012 9:34:06 PM
get_the_chip_off_your_shoulder says:
Some of you people are so bitter and negative. And i'm talking about the usal biggots who always say things like "anoher white elephant" or "only in thunder bay" or how thunder are idiots and suckers. You should all look outside of your little reality and actually realize this type of failure in new companies opening and closing offices in different cities is not a thunder bay phenomenon and is just part of today's up and down economies and industries bouncing back and forth. If something fails in thunder bay everyone is so rushed to "assume" everything else will fail and call it hopeless. I'd hate that have such individuals working for my business as you reap what you sow. Maybe if you showed more respect and confidence in your hometown maybe there would be more positive here. Karma isn't just a personal thing but a society effect.
6/29/2012 2:37:14 AM
Glyder says:
Hey, chippy...of course we're upset, its our TAXES that pays for these boondoggles! I am tired, as I am sure others are, of the city handing out our taxes to these companies, that either can't make it work the first time, and come back for a handout, and then again and again till the doors close and they move!

Do you have an unlimited account to keep sending our skyrocketing taxes to these companies? I sure don't, and I have a good paying job.

When I have to go spend $$$$$ on a new suspension for my car, fix a busted spring assembly etc, cause the city keeps handing out money to these companies, rather than fix our infrastructure, your damn right I get negative and PISSED OFF!

If these companies can't do it on their own, then they shouldn't be doing it. Find private investors, and keep off my tax dollars.
6/29/2012 9:15:55 AM
get_the_chip_off_your_shoulder says:
Glyder, I appreciate your comments but you failed to realize what my intention was in regards to my comments.



What I am trying to say is this happens everywhere and is not a Thunder Bay thing where our leaders and decision makers are idiots or suckers and that is why I said it irritates me when we get the usual Thunder Bay biggots who say "only in Thunder Bay" I Understand the way our governments give handouts to companies who can't make a go of it which is wrong. And giving such large amounts to them is wrong as small guys like us get turned away before even asking for monetary assistance. But it's the mentality of thunder bay making it sound like we are a bunch of suckers and scams and free handouts with no responsibility attached to it is all thunder bay is. THis is not so and it's fine to be angry but let's not do it in a fashion that says it's only thunder bay cause we are a bunch of suckers and nothing good happens here. Let's not paint the whole city black.
6/29/2012 12:14:42 PM
yqtyqt says:
Actually you are right about several points that you raise.

These fiscal flops are happening all over Ontario in particular, and across the nation. If you do a little research, there are countless cases where govts have doled out money that they really don't have in the name of "investments in the future". Well, if these governments are running deficits and huge accumulated debt loads, they are borrowing from future taxpayers on "pie-eyed" schemes, ideas, and promises. If these were great ideas, traditional markets such as financial institutions and private investors would be fighting for their positions and stakes in companies.

My feeling is that governments have become the financing of last resort for these guys and are the first to take the fall.

All of this, of course, is on the assumption that govts actually have any surplus monies. Which we all know is not true.

BTW - do you know that every resident in Ontario pays $1,000 for interest chgs on prov debt each year.
6/29/2012 9:23:59 AM
get_the_chip_off_your_shoulder says:
yqtyqt i totally agree with you and glyder. I was trying to raise awareness we need to stand up for ourselves and our city and not always state that we are a hopeless hole in the ground that is not worthy of anything every time the typical government or business scandal/financial disaster happens. Government basically need an entire restructuring and be run by low wage people with no possibility of huge payouts for resigning after a scandal. So if you are paid less but paid more based on performance you will work hard and do valid work and will avoid corruption and scandals cause you know you'll get no huge payout for resigning to cover up the corruption. Too many people in big business also have ties to those who make government financial decisions which is one main problem.
6/29/2012 12:23:00 PM
animiki says:
The failure isn't the issue. The failure in spite of receiving a huge amount of public funding is. As in the case of Global Sticks, we have seen a company whose business plan was supposedly subjected to due diligence by the government (I think the Heritage Fund uses Deloitte) and then provided with taxpayer funding--and then it fails, which means the b-plan and the due diligence were both flawed. The government is unlikely to ever receive any of that funding back, either.

Public funds should NEVER be invested in private sector projects. It's not the role of government to select "winners" and "losers". It is the role of government to establish a favorable business environment through tax policies, streamlined legislation and regulations, etc.

Government funding--especially the Heritage Fund--should be used only to assist other public entities (like municipalities) and not-for-profits. For-profit companies can find investors or go to the bank.
6/29/2012 10:32:13 AM
Circular_Logic says:
pardon me but,,,what a load of BS chip!
6/30/2012 1:14:18 AM
unknowncronic says:
"another white elephant...only in thunder bay"
6/29/2012 10:52:56 AM
get_the_chip_off_your_shoulder says:
CRONIC.. you sarcastic fool LOL
6/29/2012 12:28:21 PM
Circular_Logic says:
Right you are cronic; nothing but idiots & suckers! Thionk we can get Chip to bite again?? lol
6/30/2012 1:19:17 AM
The Beaver..... says:
@ get_the_chip_off_..more then anything people are upset not so much of the fact that again somebody put the Piggy in the back of the Mercedes and took off.People are more upset with the little success that our elected Politicians are capable of to Analise,and ever so freely hand out the Taxpayers money.
6/29/2012 1:05:08 PM
Fluffy says:
There goes more of my crazy high tax money
6/29/2012 1:57:36 PM
canrebel53 says:
Has anyone seen any of the Liberal party's pack rat's standing up explaining another of their wasted money projects. You won't , they'll try their best to hide under a rock till they can come up with a good story.
7/1/2012 10:32:51 AM
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