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

The CEO of Tornado Medical Systems says heightening expenses are the main reason six of his seven Thunder Bay employees are looking for work.
Tornado Medical Systems CEO Stefan Larson (left) speaks with Coun. Mark Bentz on Friday outside city hall, a day after announcing he was laying off six of seven employees at his company's refurbished Whalen Building laboratory. (Leith Dunick,

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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