Paul Martin's Business Update - December 5th
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Paul Martin's Business Update - December 5th
The late Red Scott, a high profile American entrepreneur, was known for folksy sayings that provided deep insights into the world of commerce. One such saying: a little bit of success buys a lot of overhead may well be the best description of this week’s events in the potash industry.
PotashCorp’s decision to lay off nearly a fifth of its workforce, including 440 employees in Saskatchewan, will one day be seen as more of a psychological bombshell than economic. In an economy with 90,000 unfilled jobs, the loss of fewer than 500 probably doesn’t move the needle. But…this was PotashCorp after all, the flagship of an industry that propelled Saskatchewan from Have Not to Have leaving some to wonder whether the bloom is off the Saskatchewan rose.
It is more of a dose of reality. Any business must size itself to reflect the market it serves. Globally, farmers are cutting back on their fertilizer purchases and half the layoffs hit phosphate and nitrogen production outside Saskatchewan. This is no longer 2008 when prices were through the roof on endless demand and this week’s move reflects that reality.
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