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2012-06-29 at 14:42

Tornado explains: CEO says shutting down about finding ‘financial efficiencies’

By Leith Dunick, tbnewswatch,com
FASD FactsDrinking Alcohol at any time during pregnancy could affect the normal development of the baby.www.mushkiki.com

The CEO of Tornado Medical Systems says heightening expenses are the main reason six of his seven Thunder Bay employees are looking for work.

Stefan Larson said shutting his company’s local laboratory was a matter of finding financial efficiencies to allow other medical research projects the multinational corporation is working on to continue.

It’s unfortunate workers in Thunder Bay had to pay the price, he said.

In total the company laid off nine of its engineering personnel, who were working to develop a breast imaging system, a device that would allow surgeons to scan breast tumour tissue that’s been removed to ensure the cancerous tissue was completely removed.

“One of our many product development projects is undergoing a bit of a restructuring. And in order to make that restructuring a success, unfortunately I had to let go some of our very good people, including six of my engineers here in Thunder Bay.”

Larson, who met with Community Economic Development Commission officials on Friday morning before meeting with city officials in the early afternoon, said they needed to slim down the project and slow down its pace to make it financially feasible.

He stressed the company will honour the remaining two years on its lease of the refurbished sixth floor of the Whelan Building, a project that cost taxpayers $1.1 million through a Northern Ontario Heritage Fund Corporation grant awarded to the CEDC.

He’s not ruling out a return to either the project or Thunder Bay.

“The whole reason why we’re slimming down this project temporarily is to allow us to restructure it, work with our stakeholders and our funding partners to ultimately make this project a success.”

CEDC founding CEO Steve Demmings called it a disappointment, given the work his city-funded organization did to attract the company to Thunder Bay.

However, he added, it’s not the end of the line for the research community in Thunder Bay.

“I expect us to continue to grow. I think what we have to do is keep thing in perspective. If you look at the front page of the Globe and Mail today, one of Canada’s darlings, Research in Motion, is laying off 5,000 people in Waterloo,” Demmings said.

“In answer to your question, it will be a part of our strategic plan.”

He also doesn’t necessarily think a setback like Tornado Medical Systems is necessarily a setback to attracting other like-minded companies to the city.

There will always be obstacles to overcome he said, and this is just one of those occasions, he said, defending the CEDC’s track record, that includes trumpeting the arrival of the on-again, off-again Global Sticks.

“Products don’t market themselves. You have to really market the community. We’re part of a global environment and I think we have a strong reputation in the sector and will continue to grow jobs and attract investments,” he said.
Thursday’s news caught most of the political world by surprise.

Coun. Rebecca Johnson said she heard the news on the radio on her way home, and was surprised to find no warning in her inbox when she got there.

“It was a huge surprise. My jaw dropped,” Johnson said, adding Tornado Medical systems owes the city, province and federal governments, who in March gave the company $343,000 in FedNor funding for the project, an explanation.
It’s also a disappointment for the CEDC, she added, questioning its direction.

I think you have to re-evaluate what you’re doing and take a good look at your strategic plan and how you’re going out and attracting businesses to come to Thunder Bay. And to firm them up and have them stay here, maybe there’s another way we can do that,” Johnson said.

Minister of Natural Resources Michael Gravelle, who on Friday announced funding to help a pair of Thunder Bay businesses expand through the $100-million NOHFC, said he was shocked at the news.

But while some taxpayers are up in arms about the $1.1 million grant, Gravelle said the CEDC delivered the renovations as promised and that the NOHFC doesn’t hand out money on a whim.

“You make decisions based on good hard work and due diligence … There’s no doubt that there are examples where things don’t work out the way they’re supposed to. Tornado is quite a shock, as we’ve all acknowledged,” Gravelle said, adding he hopes Global Sticks can still find renewed life.

Demmings said the CEDC will look for new lease opportunities to fill the Whalen Building vacancy.

 

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Comments

We've improved our comment system.
deerhunting101 says:
Well all the levels of Government better go after that money we gave them. If they can't pay it then shut the entire company down. Stop giving out all these handouts to companies that spend and run. I'm certain this original announcement of funds and jobs was some kind of photo op for a campaign somewhere.
6/29/2012 3:33:38 PM
yqtyqt says:
Yes the photo-ops are part of the handout requirement. It's too bad that taxpayers can't insist that phot-ops become part of the closing as well. Maybe they could have McGuinty fly in for the photo op and explain where the money will come from when Tornado slithers away from its obligation.

Its what the NOHFC and the governments do best. Squander our grandchildrens money away on fiscal flops, grandstand for votes, seize the photo-ops, and then hide when the company folds.

Ontario is broke enough without NOHFC doling out money that the province doesn't have.
6/29/2012 5:09:47 PM
advocate says:
what about Fednor?
6/30/2012 10:11:13 AM
yqtyqt says:
Yes Fednor as well!

But I focus on your liberal buddies (Dalton, Mikie and Billie) because more often than not, their mug shots are the ones that readers usually see when these opening are announced. And its funny how the announcements increase just before an election. Spending taxpayers cash on promises using money that they don't have. Giving money to this group, promising "investments in the future", handing our corporate welfare, glorifying bent poles at the waterfront, all of which usually turn out to be huge flops They downplay Drummonds expert fiscal report in favour of political correctness and continue to hand out increases to public sector and employees.

In my opinion, all of these handouts and squandering of taxpayers money should be made illegal prior to any election, federal or provincial. Municipalities go into a 'lame duck" period prior to elections, why not the senior levels of government. Gosh knows, the taxpayers could use a break from the reckless spending.
6/30/2012 3:10:54 PM
vimeo says:
They're keeping one person on staff as they restructure? Horse Hockey. They're doing it to fulfill a NOHFC requirement to avoid paying back the loan. If they were to completely shut down they'd be on the hook for the million dollars. Since they haven't shut down (kept a secretary) they keep the cash.
7/1/2012 12:35:16 PM
Get Real says:
Kept a secretary? Where are you getting this information? Ohhh, another assumption by a poster on this site, standard-issue.
7/2/2012 7:04:30 PM
DazeofThunder says:
“The whole reason why we’re slimming down this project temporarily is to allow us to restructure it, work with our stakeholders and our funding partners to ultimately make this project a success.” I wish we would stop this bowing to stakeholders. Playing with people's lives because of greed shows neither respect nor empathy for the common man.
6/29/2012 3:40:31 PM
Joey Joe Joe Jr. Shabadoo says:
i got this from his explanation:

blah blah blah blah i am rich, blah blah blah blah will be going to the toronto office to continue spending free monies, blah blah blah blah feel bad about the lost jobs here but, blah blah blah blah its summer, blah blah blah blah bye Thunder Bay!
6/29/2012 3:48:55 PM
mercy mercy me says:
Johnson and Bentz, quite a pair, they are almost as hungry for media exposure as Angus...too bad CEO Larson couldn't lay them off too
6/29/2012 3:54:25 PM
TBayworker says:
As a taxpayer I want our money back. I also run a small bussiness. Can I go to the city and ask for a handout and close a year later???
6/29/2012 4:13:25 PM
The Beaver..... says:
Or is it maybe that Tornado has got it figured that the rest of Thunder Bay,s so called research Business is not going anywhere anytime soon.So lets go while the going is good.
6/29/2012 4:38:31 PM
tsb says:
If this city isn't going anywhere soon, it's because people like you won't let it.
6/29/2012 8:39:51 PM
tbayguy009 says:
Promised dreams from IOU's isn't actually going anywhere.

Material productivety in this arena for real money is at an all time low in Thunder Bay.

The money sucking continues. That is not progress. And so, the resistance by the public to be interested in NOT supporting those 'dreams' should as ferocious as ever. At no point in history has a generation spent so much, so fast, with their misguided mindset that they are leaving a better world behind. It is NOT happening.

Multiplex vs sewers. Which is more important the the average person?

Why should these million dollar deals be important to anyone, except for those grabbing the cash?

The risk to the public has been completely trivialized by the people signing these deals. The taxpayer is now just a credit card being used to charge against.

Why doesn't government get out of the business of business.

That was never their mandate.
6/30/2012 10:40:18 AM
Chaos says:
CEDC = Dragon's Den on crack
6/29/2012 6:38:13 PM
The Badger Mountain Hermit says:
Certainly several more million$ would help, wouldn't it?
6/29/2012 7:26:43 PM
passlake says:
"financial efficiences" - the ability to take money for pretending to do something.
6/29/2012 7:51:27 PM
hotdog says:
it's called government cutbacks, it's a signpost for what is going to come. Think Global Sticks as another example. Just wait if the City is sucessfully sued and goes bankrupt. OUCH!
6/29/2012 9:16:24 PM
homelessteen says:
Ok so who is using the building until then? I read a story about a guy in northwood who could use a place for awhile.
6/29/2012 9:48:14 PM
justsomeguy says:
Do you suppose this might be just a little related to tbrri's impending collapse? ...the rats jumped ship there when the funding expired after shifting away from finding a cure to developing products, so no more customer/partner for these guys. They were just recruiting a few days ago....are they that out of touch with what direction they are going? All a bunch of fluff that needs a full and proper audit ....the whole sector. What is there of actual substance? I see a house of cards falling down and it will all get swept away quietly under the rug if they can....shameful. Let's see the focus on development of businesses with people who have already demonstrated a commitment to the community. No more political double-speak...just the straight goods.
6/30/2012 1:19:31 AM
yer joking says:
It's called B-U-S-I-N-E-S-S. Hasn't anyone heard of it before? It's not nice but it makes the world go round. Getused to it it's been around longer than Oh wait that's business as well. In business you either get it stuck to you or you stick it to....
6/30/2012 11:32:13 AM
unknowncronic says:
im sure someones already got dibs on that office that was refurbished for 1+ million on the 6th floor...
wonder if u can get a good view of the other million dollar waste we now call the talking bent poles... just waiting for a ROPE to go up between the poles...laundry servies, dried by superior air!


time will tell

6/30/2012 11:44:52 AM
chaos says:
Michael Powers sure left at the right time.

6/30/2012 2:17:32 PM
wayne says:
The jokes and jabs at those bent poles (artwork) never gets old...lol I wonder if they flashed S.O.S. during the flood? lol
6/30/2012 7:26:51 PM
yer joking says:
I don't think it was SOS more like ... ..- -.-. -.- . .-. ...
7/1/2012 8:34:43 PM
Get Real says:
The comments related to the company being a scam and the tax payers being taken advantage of are ridiculous..

The 1.1 Million went into the building renovations, so it isn't like it was stolen. Secondly, 'hundreds of thousands' is nothing in the medical device business, it takes millions to do one product.

The reality is, they tried to do something significant and it didn't work out as-planned. Typical business! It happens every day, but maybe not in Thunder Bay. This doesn't matter because the conspiracy-theorists and the hard-done-by don't care about reality...
6/30/2012 10:02:44 PM
tbayguy009 says:
Really now.

"conspiracy-theorists" These are facts. Government money was 'burned' up in a flash of a dream. If contractual obligations were requested to support this endever from the begining, then there would be legal recourse for the return of this money. I hope that is the case. But these are "back room" deals.

If government officals (in whatever capacity) are so frivilous with OUR money there is again, no conspiracy-theory. The facts are there, in black and white (or red when it comes to government budgets).

As for the "hard-done-by", any supporter of a system like this is just is just enslaving the population into repaying this debt. For some it is "too easy".

The 1.1 million in upgrades was WASTED. Is this company going to pay business taxes, plus the lease obligations on an empty office. Changing a building's interior to suit one tennent, doesn't mean it will suit the requirements for any future tennant.

It really hurts when 'kids' get caught so obviously stealing cookies.
7/2/2012 9:30:27 AM
Get Real says:
Yes, really..

If you understood business, at all, you'd know that there is ALWAYS risk associated with investment. I have seen privately-invested million dollar projects get shut down without a cent to return to investors. It's the name of the game and the government knows this, so they execute 'due diligence'. In this process, they study a business plan and have a look at the company's track-record and resources. It isn't a simple 'back-room' deal!

Again, with the 'WASTED' 1.1 million.. As the CEO mentioned, the company will honor the 2 year lease. Either by a) Finding a new tenant to 'sublet' or b) paying it! This is the 'contractual obligation' that you said didn't exist.

Although it's fun to always be looking under the table, reality can exist on top of one.
7/2/2012 7:13:22 PM
canrebel53 says:
tsb, hate to tell yea but this city hasn't gone anywhere for close 30 years, in fact this city is so far behind they think their first. And you can thank the useless Liberals and the jack ass Councils that keep getting voted in for it.
7/1/2012 10:00:04 AM
Chaos says:
Get real : legit businesses use thier own money or borrow it from a real lender with personal guarantees, security etc.

The scam or stupidity was the less than 1 year it took to fall apart. Who would spend 1.1 million on leaseholds for 11 months if wasn't just play money? Same thing with Global Sticks less the one year and done after millions spent! Its the speed of the failure that drives me crazy and should make CEDC ashamed of themselves. 11 months for 7 local salaries = 1.1 million and hundred of thousands of cedc time and energy.

CEDC should ask why didn't they shut down the toronto office? After all it is the NORTHERN Ontario Heritage Fund Corporation.

7/1/2012 10:11:55 AM
yqtyqt says:
chaos:

As Lori says, get with it.

"Legit businesses use their own money or borrow it from a real lender". For the most part, you're right. But businesses these days, both legit and not so legit all borrow from the CEDC and the NODFC. After all, it's free money supplied from our grandchildrens tax revenues. Kind of a "reverse" bequest. They won't miss it 20 years from now according to Lori. And Dalton, Billie, Mikie(and Lori) won't be around to experience the misery that these losers put them through

"The scam or stupidity was the less than 1 year it took to fall apart." Once again, how could you be so stupid. In reality, this thing was simply an liberal election ploy and was destined to fall apart on day 1

"Global Sticks less the one year and done after millions spent! Its the speed of the failure that drives me crazy". Stop it already. How dare you bring Global Sticks into this discussion.
And don't you mention bent(ed) hockey sticks either

Shame on you 4 your facts.
7/4/2012 1:08:33 PM
Get Real says:
Chaos: Who said Tornado didn't use their own money? In fact, if you investigate, there was a LOT of private investment into the company. I don't think the CEDC would dare invest in a company that had zero dollars at the table.

From all of the information in the story, you have misinterpreted a couple of important facts. 1) The 1.1 Million went into building renovations, not to pay salaries. 2) Tornado is honoring the remaining 2 year lease.

If you read up on the opening of the office and other reports on the project, you would know that the Thunder Bay office was opened specifically for the project being 'slimmed'. Hence, it is fairly obvious why it is being closed rather than the Toronto location.
7/1/2012 7:53:40 PM
lori says:
GET REAL with all due respect what planet have you been living on.You try to use facts to make your point. How dumb can you be. This site is dedicated to hyperbole, personal attacks and gigantic loads of misinformation.
Please save factual arguments for other discussions.

NOHFC was taken to the cleaners. To suggest as you have that the money supplied by the Ontario gov't did not go to the company is silly. While it is factually correct, it doesn't make for good blog postings. To suggest that the company invested some of their own money may be true, but again, don't confuse the posters here with facts. They just get in the way of the rants.

Remember, when people get laid off here, it is the gov'ts fault. When they get laid off in any other city, it is the economy.

Once you understand that, you will be better able to talk on this site.

No need to thank me for the advice. It was my pleasure.

Now remember, facts do not belong here. Only unsubstantiated rants.
7/2/2012 11:02:53 AM
yqtyqt says:
I recall your interpretation of facts several times.

OAS vs CPP and the planned clawbacks. YOu obviously don't understand what the difference is.

The facts surrounding the Public Salary disclose Act and how out to lunch you were on wages paid. Tell us again what the City treasurer makes.

Provincially debt statistics and your lack of factual knowledge. How much per capita do Ontarians pay each year?

The interpretation of wages with respect to the electronic information return that TBay filed. What is the average wage for municipal employees including benefits?

I hate to break the news to you. But you have no idea about provincial or municipal finance issues. Only what Billie Mauro tells you. Which of course is bogus information.

Do some reading, comprehend the meaning of audited information, and come back when you understand what you're talking about. Your degree in economics @ finance from Atikokan Highschool doesn't cut it here.

NOHFC = a waste of tax money.

7/4/2012 1:24:59 PM
wayne says:
Chronology of announcements as reported by TBNewswatch:

Oct 27, 2009: "bringing 50 jobs, up to 300 by 2013."

August 30, 2010: "Demmings called Tornado Medical Systems the catalyst that he expects will drive plenty of traffic to his doorstep over the next three or four years"

Feb. 15, 2011: "TBRRI CEO Michael Power compared the emerging medical research market [Tornado] in the city to countries like South Korea and Israel" Why did Power leave??

May 11, 2011: "In the next couple of months the first wave of Tornado employees will settle in and within nine months, more than 15 employees will call the sixth floor home." (half of that number)

March 5, 2012: “It’s great to see this innovation come out of Thunder Bay, I’m looking forward to the final product.” [clement fednor]

May 23, 2012: Lightning strikes Whalen building. A sign? an omen?...lol

June 28, 2012: "one of the crown jewels in the city’s plan to transform its economy from resource to knowledge-based"
7/2/2012 5:04:00 PM
If... says:
Pretty much every business-related headline should read "Overly Optimistic Statement" followed by "IF everything goes well" :)

As someone 'in-the-know', if everything DID go well, these statements would have be true!
7/2/2012 9:17:38 PM
Get Real says:
Lori, that was awesome, thanks! I needed a good laugh ;)
7/2/2012 6:54:43 PM
DazeofThunder says:
that's just it isn't it? our thoughts and opinions aren't going to change the course of history on here anyways so why get so uptight about people having their say....whether or not it is substantiated in your opinion. the people have been told to be quiet for a very long time. Glad to see them speaking up :)
7/2/2012 6:57:56 PM
lori says:
Daze, I don't know who has been told to stay quiet but there must be a difference between speaking up, and propagating myth.

People come on here and say outlandish things as if they are true. Others take those statements to form their own opinions.

Let us debate, discuss and sometimes even argue about things, but lets do so on a semblence of actual fact.

NOHFC did not give any money to the company. That is fact. But that does not stop the error filled commentary.

This site is monitored. I would hope at some point sufficient time would exist to have the editor comment on some of this misinformation so that commentary that is wrong does not become believed.

One more example.

MPP's and their gold plated pensions.

It doesnt matter that MPP's do not get a pension. Countless people still post that they do.

While these blogs may make some feel better, they do very little to help make the masses more informed. They likely have the opposite impact.
7/3/2012 8:42:18 PM
unknowncronic says:
what a scam!! keep 1 guy on & keep the cash...

sounds like something that would happen in Thunder Bay...

wonder if he feels guilty cashing his cheque?
7/3/2012 12:02:12 PM
One Guy On says:
Why would I feel guilty about cashing my cheque?

I've spent my whole life trying to become the best possible engineer. I've sacrificed a lot of money, time, and energy for my achievements. I relocated from Toronto last summer because I love Thunder Bay. I worked VERY hard on the project being 'restructured', there was a lot of blood, sweat, and tears involved. It would have helped a lot of people and that's what kept me working unpaid overtime every day. Luckily, I had certain skills that Tornado needs in Toronto and am being transferred there. Why should I feel guilty???

People are too quick to think the worst..
7/3/2012 8:02:08 PM
Joey Joe Joe Jr. Shabadoo says:
@GETREAL:

GET REAL!! Although there IS always a risk associated with investment, they should have used thier own CASH to fund thier BS!

Although the company will honor the 2 year lease by either;
a) Finding a new tenant to 'sublet' or
b) paying it!
THEY ARENT DOING WHAT THEY SAID THEY WOULD BE DOING HERE IN THUNDER BAY!
7/3/2012 12:08:31 PM
Get Real says:
As strongly indicated by Lori, ignorance is rampant here.. Evidence includes ignoring clear facts and terribly spelling and grammar.

Obvious Fact : They DID use their own cash. You don't do something like this without millions of dollars at the table.

Business Lesson : Business doesn't always work out as-planned or promised. In general, only 20% of startup companies actually succeed. Medical startups are even more prone to failure due to the rigorous FDA submissions.
7/3/2012 7:53:14 PM
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