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Contenu archivé
L’information dont il est indiqué qu’elle est archivée est fournie à des fins de référence, de recherche ou de tenue de documents. Elle n’est pas assujettie aux normes Web du gouvernement du Canada et elle n’a pas été modifiée ou mise à jour depuis son archivage. Pour obtenir cette information dans un autre format, veuillez communiquer avec nous.
This document is archival in nature and is intended for those who wish to consult archival documents made available from the collection of Public Safety Canada. Some of these documents are available in only one official language. Translation, to be provided by Public Safety Canada, is available upon request.
Le présent document a une valeur archivistique et fait partie des documents d’archives rendus disponibles par Sécurité publique Canada à ceux qui souhaitent consulter ces documents issus de sa collection. Certains de ces documents ne sont disponibles que dans une langue officielle. Sécurité publique Canada fournira une traduction sur demande.
1
I HV 9310 .L65
F4 C.1
THE IMPOSSIBLE FURNISHING STORE FROM SWEDEN
P.O. BOX 2693. TERMINAL 'A . , LONDON. ONTARIO
ST. LEONARD'S HOUSE. LONDON N6A 4H4 434-1669
1984
BRENNAN &
P I N NOCK LTD.
LON DON, ONT.
=I>
4 I* CORRECTIONAL SERVICE CANADA
Feasibility
Stuciy
for
New
Workshop.
London, Ont.
OCT 1993
• f
>*Iù
PAGE No.
/ , 6:5 FEASIBILITY STUDY FOR NEW WORKSHOP LONDON, ONTARIO
FOR
ST. LEONARD'S HOUSE, LONDON
AND
CORRECTIONAL SERVICES CANADA, OTTAWA
TABLE OF CONTENTS
ITEM
1. Introduction
2. Terms of Reference
3. Objective
4. St. Leonard's House, London
5. IKEA Limited
6. Brennan & Pinnock Ltd.
7. Canadian Marketplace
8. Approach to Study
9. Project and Location
10. The Work Force
11. Community Impact
12. Compliance with Policy and Procedures
13. Administration of Project
14. Property Requirements
15. Machinery Requirements
16. Staffing Requirements
17. Funding
18. Costing
19. Support to Project
20. Recommendations
21. Acknowledgements
CopynghtofthIsdocument
ig tofilecrown. Proper authorization must be any intended use obtained from the author for
Les droils d'auteur du présent documentn'appartiennent
Pas à l'État. Toute utilisation du contenu du présent document doit
être approuvée préalablement par l'auteur
DESCRIPTION
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SECTION ONE
INTRODUCTION
1. INTRODUCTION
Brennan and Pinnock Ltd. promoted the concept of expanding the
principle of the existing workshop facility at St. Leonard's
House, by setting up a new larger workshop, to service the
needs of a major wood products retailer.
Establishing a new workshop facility would provide much needed
employment and job training skills for participants under the
direction of Department of Correctional Services here in
London, Ontario.
To develop the idea further several approaches were made to
establish suppliers and/or retailers in wood product lines.
Interest was shown by many to the presentation by Brennan &
Pinnock Ltd. At this stage however, no firm commitment could
be made because no authorization- had been given to expend any
funds.
IKEA Ltd., a major furnishing store outlet chain, currently
enjoying a meteoric growth in Canada, were prepared to sub-
stantiate their interest and faith in the project by offering
a letter of intent to give orders for a wood chair product
line over a five year term, valued at approximately $750,000
per annum, should such a manufacturing facility be set up on
the guidelines previously outlined. In return IKEA Ltd. re-
quired that the facility offer a competitive price for the
product and that it would meet both production and quality
standards set by IKEA Ltd.
-1-
To enable the concept to reach fruition Brennan & Pinnock Ltd.
set about meeting with St. Leonard's House, London, Correctional
Services, London and IKEA, Vancouver.
A copy of the agenda and response of the meeting with IKEA Ltd.
on 30th September, 1983 is included in this study.
A copy of IKEA Ltd. Letter of Intent is also included in this
study.
The study is intended to outline the work path, goals, ad-
vantages and disadvantages of St. Leonard's House, London and
Correctional Services into such a contract with IKEA Ltd. and
providing a new workshop facility in London.
The study which follows has been organized into 20 major
sections that are detailed in the Table of Contents. The
material in the individual sections is organized into a dis-
IKEA is represented in Canada with 8 stores, 2 Central Distribution Centers and one Service Office, and is preparing its introduction on the U.S. market.
Increased purchases of furniture from Canadian suppliers are vital to cover today's and future demands of sales volume and an established net of local suppliers is essential to meet the expected growth. The majority of furniture sales should in the future, be supplied by Canadian Woodworking Industries.
IKEA is looking for a chair manufacturer in Canada. We presently import 100% of all our chairs.
In order to be able to meet IKEA's demand in prices and quality it is essential that an investment in equipment andspecializingin the chair production only is being made. This in order to be able to compete with European manufacturers.
If such an investment is made, IKEA would, if quality, prices and deliveries will be fulfilled according to IKEA's demands, commit themselves to purchase kitchen chairs for the next 5 years, to an amount of $750,000 per year. That amount for roughly 30,000 chairs.
Yours truly,
LIMITEDÏ2,ww
Pa 'Jensen
, IKE
Vice President Purchasing
VP:lr
—3—
IKEA Limited, 3200 Sweden Way, Richmond, B.C. V6V 2A5
NEIL BRENNAN MARKETING LTD. Representatives of Industry
MEETING WITH IKEA 30th September, 1983
Mr. Pella Jensen - IKEA Mr. Neil Brennan - Neil Brennan Marketing Ltd.
AGENDA
1. Introduction
2. Requirements of Government of Canada:
1. Financial Statement - 1981-83
11. Confirmation of letter of intent
3. Machine Layout:
1. Specification for each machine
11. Capabilities/versatility of each machine
111. Preference on manufacturers
4. Product Line:
1. Blueprint of coMponents, methods of jointing,etc.
8. Follow up by Neil Brennan Marketing Ltd. to achieve
production and quality control to meet IKEA's
standards.
9. How can Neil Brennan Marketing Ltd. assist IKEA in
their future continued growth in both Canada and
U.S.A.
10. Any other business
Response to Meeting With IKEA
30/09/83
1. Introduction:
a. Outlined to IKEA who our client was.
b. Where Neil Brennan Marketing Ltd. came into the picture.
c. Commitment to Correctional Services Canada, Neil Brennan Marketing Ltd., and St. Leonard's House, to bring this project to a successful conclusion.
d. How we would all work together in making this project successful and profitable to the benefit of all parties involved.
2. Requirements of Government of Canada
a. Financial Statements: were obtained for 1981-82. 1982-83 statements would be available to us during December 1983.
b. Confirmation of Letter of Intent
Pella Jensen outlined that his company was looking for a manufacturer for chairs as they are currently pur-chasing all their chair units from Europe.
This would be an "import replacement". Based on 1982- 83 levels IKEA gave a letter of intent for 30,000 units but said that this could exceed 50,000 units per annum.
IKEA will be opening another five stores during 1984 of which one is located in the U.S.A. Canadian man-ufacturers will produce work for this market.
Consequently, Pella confirmed that he is willing to meet with all parties concerned in this project on Thursday, November 24th, 1983 in London, Ontario.
3. Machine Layout
a. Specifications for each machine:
IKEA gave to me the machinery companies who we should deal with, together with the appropriate requirements and specifications on equipment.
-6-
b. Capabilities/Versatilities of each machine:
Brochures on equipment giving the capabilities of each machine are included in this study.
c. Preference on Manufacturers:
Manufacturers of equipment were obtained and followed up on. Prices F.O.B. Europe were Telexed to us from various sources.
4. Product Line _
a. Blueprints were obtained on the two types of chairs and samples were secured.
b. Material Specifications
Standards on their products were included on the blue-prints and details on the testing of this product were given to me.
c. Preference on Material Sources
The major supplier of "Lodge Pole Pine" was obtained. Prices were quoted at approximately $500.00 (five hundred dollars) per 1,000 board feet.
d. Specifications for Finishes:
A detailed specification list was obtained and filed for future reference.
5. Production
a. Confirmation of start up date
Providing all samples and IKEA's standards are met we can start production any time.
b. Schedule of Production Requirements
Production schedules will be given to us twice a year. Sample obtained.
c. Quality Control
IKEA personnel inspects the factories every six weeks to ensure quality standards are upheld.
d. IKEA Standards
HIGH
-7-
6. Delivery
a. Packaging Requirements:
Obtained IKEA's packaging requirement standard sheets.
b. Delivery Destinations:
Everything which is manufactured for IKEA is F.O.B. Plant, and shipped by truck to Montreal.
7. Submissions by Neil Brennan Marketing Ltd.
a. Government of Canada
Outlined to IKEA how and when this presentation would take place.
b. IKEA
Pella Jensen was informed that a copy of this study would be forthcoming to his company.
8. Follow up by Neil Brennan Marketing Ltd. to achieve pro-duction and quality control to meet IKEA's standards.
Outlined to Pella Jensen that N.B.M. Ltd. would take responsibility to ensure all procedures are followed and production goals achieved.
9. How can Neil Brennan Marketing Ltd. assist IKEA in their future continued growth in both Canada and the U.S.A.
If all goes will with this project,future lines would be considered by IKEA. Consequently, an excellent job must be achieved for all concerned.
10. Any Other Business:
a. I was shown around the new IKEA store and head office at 3200 Sweden Way.
b. The approximate investment required was $650,000 for this plant.
c. I thanked Mr. Jensen on behalf of all concerned for extending his time to me.
SECTION TWO
TERMS OF REFERENCE
2. TERMS OF REFERENCE
Brennan & Pinnock Ltd. were commissioned by Correctional
Services Canada, Ottawa under the Articles of Agreement ref.
1983/84-HQ7321 to undertake the following work:
1. To provide a feasibility study on the possibility of
operating a furniture manufacturing operation utilizing
conditionally released inmates from Federal and Provincial
penitentiaries who reside in the London, Ontario area.
2. To explore and make options available of providing a cost
sharing agreement between Public (Federal/Provincial) and
Private agencies.
3. To explore and make options available to provide a social
integration component of the employment aspect of the man-
ufacturing duties of the factory as they relate to the
correctional clients.
4. To present to the Executive Committee of the Correctional
Service of Canada the feasibility study options and re-
commendations including costing and funding options in-
dicating other sources of funding and client referral.
Brennan & Pinnock Ltd. fees for carrying out this work and all
aspects of this project are contained in our letter dated
12th October, 1983 delivered to Department of Correctional
Services, Ottawa.
SECTION THREE
OBJECTIVE
el
1 3. OBJECTIVE
Ill
This study investigates the issues involved in setting up a new
woodworking workshop and is summarized under the following main
1 II categories:
•
I a. Location of workshop
b. Available workforce
II c. Community impact
• 1 d. Funding
II e. Property and machinery
I f. Cost to set up workshop
g. People employed
II h. Product being made
i. Ability to produce 411 j. Cost effectiveness
II k. Administration
1. Recommendations
11 The problem of lack of employment is experienced by many II Canadians today. For men with a criminal record, the task of
• finding a job is doubly difficult, especially if the parolee
II is untrained and unskilled. This is the case much of the time.
III This study has been undertaken to try to find some answers to
this problem, with at least one qualifier:
II Men coming to St. Leonard's have, to varying degrees, been ex-
posed to the institutionalizing influences of our prison systems.
Therefore, one of the basic objectives of any plan for a work
-10-
41 1 1
project for the residents of St. Leonard's should be to avoid
perpetuating institutionalization. The only way to accomplish
this goal is to separate the workplace, both geographically and
functionally, from the three London residences.
While is is desired that any work project undertaken should
have an element of a therapeutic nature, emphasis here is on
providing as realistic a work setting as is possible, in order to
give each man a feeling of selfworth and pride of accomplishment.
The following pages give a sample of the type of knock-down
furniture we are proposing to manufacture at the new St.
Leonard's House London Woodworking shop facility.
•1
I
LCR-41
AJ.63
EC-20
releit.5
FB-15
AJ-63
-13-
6x4 1 2
1 li 1 I
*1 ) I J I
«I I 1 1 I
•1 I 4 I I
....■■
<4? co
WcT glrn WcT :15,
x5
BV-J4 BV-74 BV-74 BV-74 B11-74 BV-74
ç c E0•20 ED-20 ED-20 ED-20 ED-20 ED-20
01
SI
16-
KRISHNA chair oubellakta Solid pine in a choice of natural or nutbrown stained finish, clear lacquered. Brown striped fabric on cush-ioned seat. W45 an, H83 cm. Seat height 45 cm. Designed by Karin Mobring. QA. Natural ir nutbrown $68.
KORPI chairs. Solid spruce with a clear lacquer finish. W44 cm, 046 cm, 1182 cm. Seat height 45 cm. QA Set of 2 $86. Kcrnu chair erreibelfzicta Solid pine fran e in a choice of natural or nutbrown stained finish, clear lacquered. Natural canvas seat and bat k.
Idled cost scat tovered in Aime natural coloured 101r/tt (talon W3 7 cm, I Dip tipi st..81
height 45 cm Designed by Knut I laght-ig QA Natural/Aline $120.
BILLNAS clitair-tomelliaidatatta Solid pine in a
choice ot natural or nutbrown Ntained finish, clear lacquered. l'olyether loam tilled cushion seat covered in C..àUs brown 01 beige striped tabnc. W48 cm. 1/esigned by Erik Wons. QA Natural/brown or nutbrown/beige $58.
RUSTIK chair dharhallairta Stilid pile, lightly stained ii ni clear latquer finished W41 till, P.) titi ‘ ,11 . ..11 height 4 4 nu OA $85.
mine 'IKA chair 41WINIbeillaktà ''.011 ■ 1 pate t le.11
lattiocitul W4't 1111, OA $48.
RI4 KAKI) t hair aunobeltakla Solid pint• in .1
t hi bit e 1 , 1 11.11111M 01 111111 , 1111A 11 `.1.11111•ti 11111 . .11
.10.11 1.1t trifled %). lit it 114 ii 'It• 11 1111011
4 • • us OA Naitioal iitittnown $714
11.1b1 . . poigt• . f I
SECTION FOUR
ST. LEONARD'S HOUSE, LONDON
4. ST. LEONARD'S HOUSE, LONDON
St. Leonard's Society was born in Windsor, Ontario in the year
of 1962, by a group of citizens in Windsor, Ontario, headed by
the founding executive director, the late Father Neil Libby.
This group wanted to do something about the appalling situation
of prisoners being released from jail with little resources,
and returning to prison because of it. So they started the
first adult male halfway house for ex-convicts.
In 1967 another community group in London formed St. Leonard's
House, London, following Father Libby's lead in Windsor. Neil
Libby said in London, at that time, "I can see a day when a
philosophy will evolve, going beyond simple housing, and
helping ex-convicts, a time when St. Leonard's houses will be-
come models for prisons, places where a parolee will become
involved in working and contributing to the community in which
he lives and eventually where convicts may be housed in like
manner." That is still our vision today. Our present:three
centres in London have proved of great value during the
transition period from a correctional institution to society
and as a valued alternative to imprisonment. From our humble
beginnings in 1962 we are presently twenty houses strong across
Canada.
However, many men have left the institution highly motivated,
fail to secure suitable employment, and we have watched their
enthusiasm and will to succeed dissipate.
-18-
•o
'a
•1
Many of our residents have skills and natural abilities that
need to be channeled properly, others lack skills and in some
cases are less afraid of returning to jail than going through
a job interview. The existing community programs are not
always adequate because they are in a class room setting or the
program is not equipped to handle our resident's attitude
problems. So the board and staff concluded the need for a work
project where men could work, earn money and feel worthwhile
and for those requiring skills, receive training. In this en-
lightened age it is nice to think that there is no stigma for
our men, but the reality is that many employers are reluctant
to hire. So we are committed to this project.
Our first step was to operate a Benefit Concert to earn a
small amount of money and inform the community of our intent.
We slated the money earned along with some windfall money
(totaling approximately nine thousand dollars) for the project.
The next step was to obtain Canada Community Development
Project financing for a seven month feasibility study. The study
concluded that setting up a workshop was feasible, but not easy,
and the best type of enterprise would be a wood working shop.
The next step of the continuum was the retaining of Neil Brennan
Marketing Ltd. who marketed a number of orders for wood and glass
terrariums and set up a small woodworking shop employing three
people.
-19-
As we go along I have become convinced that we are on the right
track. With the strong belief that once the enterprise is
fully implemented our residents will compete well with other
Canadian workers.
Jeff Wilbee Executive Director
SECTION FIVE
IKEA LIMITED
5. IKEA LIMITED
To explain who IKEA Limited are we have outlined below a brief
history:
Founded by Ingvar Kamprad in 1943 and registered in Sweden.
1953 - First sales showroom opened in Almhult. Sales by 1953 are 1.2 million SK ($200,000).
1956/57 - Sales increased to 17 million SK ($2.8 million).
1958 - Sales stand at 24 million SK ($4.0 million).
1963 - Second store opened in Norway.
1965 - Third store opened in Stockholm Sales now 100 million SK ($16.6 million).
1966 - Another store opens in Sweden. From this date to todays date nearly one or more new establishments are opened every year.
1972 - Sales increase to 311 million SK ($51.8 million)
1973 - First move into Europe in Switzerland.
1974 - Store opens in West Germany. Between 1974-81 15 additional stores opened in West Germany. •
1976 - Export drive concentrated on Canadian Market.
1977 - Stores open in Austria and Holland/
1981 - 5 new stores opened in Sweden, West Germany, Austria and France.
1981 - Sales reach 4 billion ($0.67 billion).
• By 1983 IKEA Limited operate over 40 stores throughout Europe
and Canada.
By 1983 IKEA Limited had established further stores in Amsterdam
and Denmark with 8 stores set up across Canada.
-21-
In 1984 IKEA Limited intend to open their first store in U.S.A.
and envisage opening 5 a year thereafter.
IKEA Limited are today one of the world's largest furniture
retailers.
The Head Office in Canada is located at:
3200 Sweden Way Richmond, British Columbia V6V 2A5
IKEA Limited do not own or operate any factories and presently
import most of their product lines from Europe.
I
1 •
dl
The following pages illustrate the IKEA Limited set up and achievements in the World Market:
Page
a. Organization set up of IKEA Limited
b. IKEA Limited showrooms in Canada
c. IKEA Limited showrooms in Europe
d. Growth of IKEA Limited Percent Sales and Purchases 1976-1983
e. Growth of IKEA Limited store area and visitors 1976-83
f. IKEA Limited sales 1976-1983
A copy of IKEA Holdings Limited and Subsidiaries, Richmond,
British Columbia, Canada Auditors' Report and Consolidated
Financial Statements as of August 31, 1982 is included in
this study.
-23-
Staff for: Administration Economy Finance Legal Education Information
Product Range ei Purchasing
Retailer
Product Range Purchasing Start-up work services
IKEA's organization is built on our basic functions which are retail sales to customers, as well as development, acquisition and the purchase of products.
GROUP EXECUTIVE BOARD President Ingvar Kamprad
The IKEA-group is judicially united by holding companies in the Netherlands, which are geographically divided into: •
Ingka Holding Scandinavia B.V.
lngka Holding Europe B.V.
Ingka Holding Overseas B.V.
Glom, services within: EDP Catalogue production War eliouse Si Transport Other services
Regional gluons:
SCANDINAVIA Sweden, Nor way, Denniai k, Finland
CENTRAL EUROPE West Germany, Swazi:gland, Austria
WESTERN EUROPE Netherlands, Belgium, Eraia.e, Spain
BRITISH ISLES
NORTH AMERICA Canada, USA
EXPORT ut ulltrieb
Region: Scandinavia
Regions: Central Europe, Western Europe, British Isles
Regions: North America and non-European countries
1
01
ad %a ale am ad we do Aim Mu ea *am me as al_ es Am_
1976 Halifax 4900 M2
1976/83 Vancouver 15500 M2
1977 Toronto 5700 M2
1978 Edmonton 3900 M2
1979 Calgary 4000 M2
Ottawa 4000 M2
1982 Quebec 10000 M2
Montreal 2400 M2
IKEA LIMITED SHOWROOMS IN CANADA
(Date established - Location - Area)
DENMARK
1969/75 e' 1980
1982
Tastrup (Kobenhavn) Arhus Aalborg
2 38.000M2 2.300M2 4.000M
Almhult Stockholm Sundsvall Malmo Goteborg Koping Linkoping Jonkoping Gavle Helsingborg Orebro Uppsala
IKEA LIMITED SHOWROOMS IN EUROPE (Date established - location - area)
15% Rest of Europe
s
35% Scandinavia
6% outside of Europe
20% West Germany 20% East Europe
5% Other
PERCENT OF IKEA LIMITED SALES THROUGHOUT WORLD MARKET
44% West Germany
PERCENT OF IKEA LIMITED PURCHASES THROUGHOUT WORLD MARKET
55% Scandinavia
IKEA LIMITED STORE AREA M2
IKEA LIMITED NUMBER OF VISITORS
N/
76/77 13,722,760 312,700M2
77/78 16,298,478 335,400M2
78/79 19,078,368 376,400M2
79/80 25,112,169 424,600M2
80/81 29,639,783 458,100M2
81/82 33,595,254 483,500M2
82/83 36,119,829 533,300M2
7b S.K. (1b$)
6b S.K.
5b S.K.
(0.75b$)
ctj
4b S.K.
3b S.K.(0.5b$1_1
■•■■•■
billion
Swedish Kroner b.
S.K.
2b S.K.
(0.25b$)_.1
lb S.K.
X
ur
CO
CO
IKEA LIMITED SALES 1976-1983
'l i ii 111 . .---1 c\I
r--- r- r--- co co co --....., -....... ---...„ -..., -,, --.., VD r-- CO 01 r--- r-- C-- r«-
r emu wallow' IN MIMI 1011 ell111 MIMI • MI in am sis
IKEA HOLDINGS LIMITED AND SUBSIDIARIES
Richmond, British Columbia, Canada
Auditors' Report
Consolidated Financial Statements August 31, 1982
Chartered Account ants
PPeat, Marwick, Mitchell & Co.
212-4800 No. 3 Road Richmond, British Columbia V6X 3A6 (604) 273-0011
AUDITORS' REPORT TO THE SHAREHOLDER
We have examined the consolidated balance sheet of Ikea Holdings Limited as at August 31, 1982 and the consolidated statements of earnings and retained earnings and changes in financial position for the year then ended. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests and other procedures as we considered necessary in the circumstances.
In our opinion, these consolidated financial statements present fairly the financial position of the Company as at August 31, 1982 and the results of its operations and the changes in its financial position for the year then ended in accordance with generally accepted accounting principles applied on a basis consistent with that of the preceding year.
2- frt €14
Richmond, British Columbia, Canada December 3, 1982 Chartered Accountants
- 31 -
Liabilities and Shareholder's Equity
1982 1981 1
$ 8,175,000
8,000,000
16,175,000
2,713,052
1,094,066
7,860,149 1,720,830
270,000
8,525,000
143,445
8,668,445
1,641,715
45,500
4,662,619 1,390,967
2,100,000
2,156,732 2,100,000
832,308
4,256,732 2,932,308
$ 39,850,389 24,424,614
4 :-, MD SUBSIDIARIES
_lance Sheet
II 1982
Ill: . gures for 1981)
Current liabilities: Due to bank (Note 5):
Demand loans Notes payable Current account
1,
Accounts payable and accrued liabilities Income taxes payable
dll
Due to Ikea Svenska A.B. (Note 8) Franchise fee payable (Note 8) Current portion of mortgage payable
1 Total current liabilities 29,833,097 16,409,246
Deferred income taxes (Note 2) — 126,500
III Due to affiliate (Notes 6 and 8) 4,941,060 4,941,060
Il Federal Business Development Bank loan 9,500 15,500
II Commitments and contingent liability (Note 10). Subsequent event (Note 11).
•1
•
le Board:
1 Director
1
Current assets: Cash and term deposits Accounts receivable Merchandise inventories (Note 2) Prepaids (Note 2)
$ 4,560,037
630,123 490,595
22,079,719 15,348,071
971,113 839,287
3,161,524 2,491,040
611,130 107,701
6,371,395 1,461,298
4,910,097
2,087,790
1,783,148
2,686,538 1,332,982
332,117 71,453
4,423,090 714,401
3,708,689
1,538,000
1,252,250 834,249
10,033,285 6,080,938
1,408,233 1,665,723
$ 39,850,389 24,424,614
IKEA HOLDINGS LIM
Consolidate
August
(With comparativ
Assets
1982 1981
Total current assets 28,240,992 16,677,953
Fixed nssets, at cost less depreciation
(Note 2): Building Warehouse equipment Automot ive Office furniture and fixtures
Less accumulated depreciation
Property under development (Notes 2 and 3)
Land
Leaseholds, at cost less amortization of $337,946 (1981 — $213,633)
Net fixed assets
Deposits on property (Note 4) 167,879
Franchises, at cost less amortization of $1,639,576 (1981 — $1,382,085) (Note 2)
See accompanying notes to financial statements.
—32— .
On behalf
Director
IKEA HOLDINGS LIMITED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
August 31, 1982
Basis of financial statement presentation: The accompanying consolidated financial statements include the accounts
of Ikea Holdings Limited and its wholly-owned subsidiaries, Ikea Limited, Ikea Trading Canada Limited and Ikea Properties Limited.
All significant inter-company transactions and balances have been eliminated.
Significant accounting policies: The accounting principles of the Companies, which conform in all material
respects with accounting principles generally accepted in Canada, are summarized below:
(a) Merchandise inventories: The Company records inventory at the lower of average cost
and net realizable value. (b) Depreciation and amortization:
The Company provides for depreciation on the declining balance method at the following rates:
Office equipment, display fixtures and warehouse equipment 20%
Automotive equipment 30% Building 5%
The Company amortizes leasehold improvements over the term of the lease, plus one renewal option period.
(c) Foreign exchange: The Company records as a cost of inventory, foreign exchange
at the rate applicable on the date of payment for the merchandise. All unpaid amounts as at August 31, 1982 have been recorded at the rate of exchange at that date with the corresponding adjustment being to inventories.
(d) Catalogue costs: Catalogue costs are included in prepaids as at August 31,
1982 in the amount of $520,201 (1981 - $699,095) and represent costs incurred on undistributed copies of the 1982/1983 catalogue.
(e) Franchises: The costs of acquiring Ikea franchises are being amortized
over the remaining periods of the respective franchise agreements.
(f) Deferred income taxes: The companies record income taxes on the tax allocation basis, whereby earnings are charged with taxes otherwise payable during the year.
(g) Property under development: Property under development for future use has been recorded
at cost plus development costs incurred to date. Carrying costs and other direct charges associated with the development of the respective properties, will be capitalized during the construction period.
(h) Comparative figures: Figures for 1981, included for comparative purposes, have been reclassified where necessary to conform with the presentation adopted in 1982.
—33—
te
el SI
— 34 —
IKEA HOLDINGS LIMITED AND SUBSIDIARIES
Notes to Consolidated Financial Statements, continued
August 31, 1982
Property under development: Costs incurred for property under development in Richmond, British Columbia, are as follows:
Deposits on property: During the year, one of the Companies entered an agreement to acquire
property, for which a deposit of $100,000 was made. Legal and consulting expenditures of $62,879 concerning this property have been capitalized with the deposit.
In addition, there is an outstanding deposit of $5,000 for purchase of property adjacent to the Richmond property.
Bank loans: Bank loans consist of:
(a) Demand loans secured by a $3,300,000 first mortgage and $1,200,000 second mortgage covering Carleton Centre in Ottawa, Ontario, a $10,000,000 floating charge debenture on the assets of Ikea Trading Canada Limited, a general assignment of book debts of Ikea Trading Canada Limited, an assignment of insurance losses, an assignment of all Ikea Limited's leases and an unlimited guarantee of Ikea Limited
(h) Bankers acceptances consisting of:
Maturity date Rate Amount
September 8, 1982 15.55% $ 1,000,000 September 15, 1982 17.05% 4,000,000 September 21, 1982 14.6% 1,000,000 October 5, 1982 14.4% 1,000,000
October 12, 1982 14.4% 1,000,000
S 8,000,000
Security provided includes an assignment of inventory and fire insurance of Ikea Limited and guarantees of Ikea Trading Canada Limited of $10,100,000 and Ikea Holdings Limited of $10,100,000.
$ 1,795,746
163,692
35,692 92,660
$ 2,087,790
$ 8,175,000
100,000
$ 2,100,000
IKEA HOLDINGS LIMITED AND SUBSIDIARIES
Notes to Consolidated Financial Statements, continued
August 31, 1982
6. Due to affiliate: Ingka Holdings Scandinavia B.V. -
10% repayable on demand, unsecured $ 4,941,060
The amount due to Ingka Holdings Scandinavia B.V., although payable on demand, has been classified as a non-current liability as the affiliate has confirmed its intention not to require repayment prior to August 31, 1983.
7. Mortgage payable: The mortgage bears interest at 15% and is secured by property in
Richmond, British Columbia. The mortgage is payable in semi-annual instalments of $135,000 until retired in May 1986.
8. Related party transactions: Ikea Holdings Limited is a member of an international group of companies. Transactions with various members of this group include:
(1) The purchase of a significant portion of goods for resale through members of the international group of companies;
(ii) The payment of a 5.5% commission to affiliates acting as purchasing and shipping agents on purchases made in certain foreign countries.
(iii) The operation of retail stores under individual franchise agreements with Inter-Ikea A/S and Inter-Ikea A/G, members of the aforementioned group. Under the terms of the said agreements, a maximum franchise fee of 3% of the net sales is payable; and
(iv) Amounts due to European affiliate as disclosed in Note 6.
9. Share capital:
Preferred shares - 8% non-cumulative, redeemable without par value: Authorized - unlimited. Issued - 2,000,000 shares
Common shares, without par value: Authorized - unlimited. Issued - 100,000 shares
$ 2,000,000
O. Commitments and contingent liability: The Company is committed under operating lease agreements on certain of
its premises, office equipment and neon signs. Payments under these leases are required during years ended August 31, as follows:
1983 $ 2,529,572 1984 1,783,143
. 1985 1,428,113 1986 1,383,167 1987 1,394,936
-35-
IKEA HOLDINGS LIMITED AND SUBSIDIARIES
Notes to Consolidated Financial Statements, continued
August 31, 1982
10. Commitments and contingent liability, continued: Ikea Limited is a co-defendent in a legal action for which damages of
$280,540 plus prejudgement interest and other costs are sought. The Company is of the opinion that the action will not succeed.
11. Subsequent event: On September 1, 1982, two of the subsidiary companies, Ikea Limited and
Ikea Trading Canada Limited were amalgamated to become Ikea Limited/Ikea Limitee.
-36-
rt
$ 58,679 51,810
29,749 10,134
16,050 13,683
169,119 110,744
360,724 178,969
281,271 9,382
582,912 432,721
15,140 2,794
98,715 68,528
391,890 233,114
271,859 156,466
81,066 126,637
173,062 115,070
29,457 18,274
24,700 13,972
Bad debts Bank charges Capital taxes C1taning Co7.puter
Lepal and professional Licenses and permits Office supplies Photocopying Postage
Schedule 1 IKEA HOLDINGS LIMITED AND SUBSIDIARIES
Schedule of Operating Expenses
Year ended August 31, 1982
(With comparative figures for 1981)
1982 1981
Publications, stationery and miscellaneous 207,174 129,301 Renovations, repairs and maintenance 620,233 549,134 Security 65,044 - Product development 9,946 24,836 Telephone 165,386 96,162 Telex 93,500 56,928 Transportation 69,720 105,333
$ 3,815,396 2,503,992
-37--
Sales
Cost of merchandise sold
Gross profit
General, administrative and selling expenses: Advertising and promotion Insurance Operating (Schedule 1) Rent Salaries, wages and benefits Travel and entertainment
Earnings from operations
Rental income Less rental expense
4,662,161 2,500,978
668,739 160,549
549,713 92,809
119,026 67,740
Interest expense Less other income
2,667,467 1,071,896
241,361 312,629
2,426,106 759,267
2,355,081 1,809,451
1,157,157 45,500 (126,500) 725,000
1,030,657 770,500
1,324,424 1,038,951
598,500
1,324,424 1,637,451
832,308 (805,143)
$ 2,156,732 832,308
IKEA HOLDINGS LIMITED AND SUBSIDIARIES
Consolidated Statement of Earnings and Retained Earnings
Year Ended August 31, 1982
(With comparative figures for 1981)
Operating profit before the undernoted
Depreciation and amortization Franchise amortization Franchise fee
. 1982 1981
$ 57,192,122 46,617,267
32,688,037 30,629,295
24,504,085 15,987,972
4,082,492 2,664,665
35,296 19,348
3,815,396 2,503,992
2,732,887 1,925,626
5,917,119 3,684,549
414,238 283,192
16,997,428 11,081,372
7,506,657 4,906,600
871,210 548,602
257,490 458,488
1,715,796 1,398,532
2,844,496 2,405,622
Earnings before income taxes and extraordinary item
Income taxes: Current Deferred
Earnings before extraordinary item
Reduction of income taxes upon application of prior years' losses
Net earnings for the year
Retained earnings (deficit), beginning of year
Retained earnings, end of year
—38— See accompanying notes to consolidated financial statements.
1982 1981
$ 1,324,424
871,210 257,490 (126,500)
2,326,624
1,637,451
548,602 458,488 126,500
2,771,041
810,000 329,187
IKEA HOLDINGS LIMITED AND SUBSIDIARIES
Consolidated Statement of Changes in Financial Position
Year ended August 31, 1982
(With comparative figures for 1981)
Source of working capital: From operations:
Net earnings for the year Items not requiring working capital: Depreciation and amortization Franchise amortization Deferred income taxes
Funds from operations
Increase in amounts due to affiliates Proceeds from mortgage, less current portion
Total sources of working capital
Application of working capital: Purchase of fixed assets: Property under development Land and buildings Leasehold improvements Warehouse equipment Automotive and other
3,136,624
2,087,790 720,134 542,314
1,158,058 315,261
3,100,228
4,224,538 202,614 528,518 218,126
Deposits on property Reduction of loan payable
4,823,557
167,879 6,000
5,173,796
6,000
Total applications of working capital
Decrease in working capital
Working capital, beginning of year
Working capital (deficiency), end of year
4,997,436
1,860,812
268,707
$(1,592,105)
5,179,796
2,079,568
2,348,275
268,707
See accompanying notes to consolidated financial statements.
SECTION SIX
BRENNAN & PINNOCK LTD .
bs Brennan & Pinnock Ltd.
In 1983 Neil Brennan set up his own company to service
the marketing needs for industry. Similarily in 1983
John Pinnock was in the process of setting up a company,
and contrary to the service offered by Neil Brennan, this
company, named B.J. Design and Development, was aimed at
providing designs for building services and developing
new designs or improving existing designs for wood and
steel products.
Neil Brennan was contacted by St. Leonard's for advice on
setting up a small woodworking facility. A proposal was
submitted for manufacturing wood terrariums. Orders were
obtained prior to setting up this facility and St. Leonard's
Board of Directors gave the go ahead. From this emerged
a possibility of orders being obtained by Neil Brennan
Marketing for more ambitious programmes.
John Pinnock and Neil Brennan have established a rapport
with many manufacturers and wholesalers who find that
they are in need of expertise in the production areas.
This is where Brennan and Pinnock Ltd. are able to offer
a complete package to clients offering a diversified
range of skills.
From discussions with people involved in manufacturing and
retail business a pattern emerged which indicated a complete
new approach was needed in both the production and market-
ing areas to 'bridge the gap' between the services already
-40-
available.
Considerable time was spent in developing an approach
method to promote our service.
A policy was established as follows:
5 Step Approach
1. SITE VISIT:
Meet client at his place of business and discuss his needs.
2. PROPOSAL:
Give client a general outline of what is required to satisfy.
Prepare a feasibility study to show the cost effectiveness of approach alternatives.
3. STUDY:
4. IMPLEMENTATION: Take charge of design, supervision, construction, changes, etc.
Monitor effectiveness of changes, resolve 'teething' problems, promote new production and methods control, bring in other work from different sources and generally oFfer management advice until the operation is running smoothly and to the client's satis-faction.
5. FOLLOW UP:
Neil Brennan
Age 35 years, married with 1 child and living in London, Ontario
5 year apprenticeship at General Motors U.K.
City and Guilds of London
Managerial experience: 4 years U.K. and 10 years Canada
Managerial responsibilities in U.K. and Canada included the
following:
1. Special production assignments, setting up new pro-duction lines and ensuring all equipment needed for an efficient operation was installed correctly.
2. Accountable for production technology and machinery in a copper strip mill.
3. Set up new nuclear facility for Noranda Mines, accountable for purchasing all materials, supplies and services for this special metals division.
4. Worked closely with several government agencies and board of directors in Indian and Northern Affairs.
5. Responsible for marketing product lines and setting up new systems in a circular stair manufacturing facility.
Notable Projects in U.K. and Canada
1972 - Setting up engine assemble line, G.M., U.K.
$30,000,000
1975 - Setting up new factory for Noranda in conjunction with 4 other key personnel, Canada
$18,000,000
1982 - Responsible for building new factory and operations, Canada
$ 750,000
John Pinnock
Age 35 years, married with 3 children and living in London, Ontario.
5 year apprenticeship in H.V.A.C. Contractors in U.K.
O.N.C. Engineering and Diploma in Environmental Engineering in U.K.
Corporate Member of Chartered Institution of Building Services in U.K.
Design experience: 15 years U.K. and 3 years Canada Consulting Engineers.
Responsibilities in U.K. included the following:
1. Design concept for building services.
2. Preparation of feasibility studies, reports, budget costing, specifications, supervision of sub-contract-ors, co-ordination of all disciplines and cost control of projects up to final account.
3. Systems designed include: air conditioning, heating, ventilation, steam, fire protection, storm and foul water drainage, sewage treatment, recycled water, sub soil irrigation, waste disposal, propane storage, com-pressed air and other support services.
Notable Projects Carried out in U.K.
Mechanical Services Cost
1973 - Rolls Royce Headquarters, London
1978 - 500 bed hotel, Saudi Arabia
$ 3,000,000
$12,000,000
Notable Projects Carried out in Canada
Energy Management Studies for - University Campus Halifax, Nova Scotia
- Hospital Halifax, Nova Scotia
- Secondary Schools Huron County, Ontario
Feasibility Studies for - University Hospital London, Ontario
- Department of Agriculture London, Ontario
- Post Office Ridgetown, Ontario
Air Conditioning Systems for - Victoria Hospital London, Ontario
- Medical Centre London and Port Stanley
- Library Dunnville, Ontario
SECTION SEVEN
CANADIAN MARKETPLACE
7. CANADIAN MARKETPLACE
Knock down (K.D.) furniture designs have accounted for 40 per
cent of all furniture sales in Britain, 30 per cent in
Scandinavia and 15 per cent in Germany in little more than 10
years.
K.D. furniture in Canada and the U.S. market is small at this
time but consumers now have changing needs and lifestyles:
e.g. smaller families, more mobile population, smaller living
spaces and this in turn requires down-size, multi-functional
furniture.
Although the initial contract with IKEA Ltd. is for 5 years
there is every indication that if quality and production
standards are maintained by the workshop this could evolve into
a much longer ongoing term contract.
To highlight the impact/importance of Canadian furniture
production we have listed below briefly some pertinent data:
a. Manufacturers of furniture in Canada approx. 900
approx. 34% of total employ less than 5 employees 65% of total employ less than 20 employees
Industry generally invites easy entry, low capital outlay and limited skills.
b. Ontario accounts for approx. 50% of Canadian furniture production. This is not to say that it is necessarily equal to 50% of Canadian consumption.
c. Unpainted furniture market accounts for between $30-40 million at wholesale value.
Furniture Market Importance
Wooden 44% Metal 8% Upholstered 30%
Other 18%
d.
-45-
e. Canadian Furniture Market (1980 $ values)
Household furniture production - 1980 approx. $1165m
Ontario furniture production - 1980 approx. $ 595m
f. Stores prefer knockdown furniture because of available showroom space.
IKEA Ltd. currently import into Canada a high percentage of its product line.
g.
SECTION EIGHT
APPROACH TO STUDY
8. APPROACH TO STUDY
The approach adopted in the presentation of this study
can be categorized under the following sub-headings:
1. Intention - To employ Target Group personnel to • manufacture a high volume wood product on the
basis of import replacement in a competitive man-ufacturing environment, giving these employees job training and work experience enabling integ-ration into other areas of the private sector.
2. Feasibility - Can it be achieved economically and profitably giving maximum employment benefit to Target Group personnel.
3. Marketing - Obtain orders to meet 5 year planned production.
4. Execution - Design and set up of factory.
5. Commitment - Follow through 5 year term to monitor effective production and methods control.
To illustrate Brennan and Pinnock Ltd's. approach
see block diagram of work flow/information.
ST. LEONARD'S HOUSE, LONDON IKEA
COST/PRODUCTS FINANCE
COST/UNIT PROPERTY
11.■■1 PROPER2Y REFURBISHENT BLUEPRINT
PRODUCTION SCHEDULE
STA7FING
PACKAGING SUPERVISION
PRODUCTION DISTRIBUTION
BRËNNAN & PINNOCK LTD.
STUDY
DESIGN
IKEA STANDARDS
SET I •P WORKSHOP EQUIPMENT
QUALITY &
PRODUCTION CONTROL
FOLLOW UP
ST. LEONARD'S HOUSE,LONDON
WORK FLOW DIAGRAM
IKEA
-48-
SECTION NINE
PROJECT AND LOCATION
9. PROJECT AND LOCATION
1. WHY THE PROJECT?
In our experience many of the men and women who find them-
selves in conflict with the laws of our land suffer from a
low self image. They feel alienated and act out of that
alienation (in fact we as a society alienate them) because
of the lack of lifeskills to perform successfully in our
society.
One cannot learn lifeskills just in a class room setting.
You do not think your way into better living, you live
your way into better thinking.
Many men leave the institution highly motivated. The dec-
ision to give him a conditional release being a good one
based on what the person has demonstrated in the instit-
utional setting. We have then witnessed that motivation dis-
sipate when he is unable to secure employment or perhaps
worse is under employed. In many cases with his deterior-
ated attitude we must return him to detention or he commits
another offense.
In order to have a good self image and maintain a healthy
attitude towards life, one must have discipline. It goes
without saying that the difference between those who are
successful in life and those who are not is the degree of
self discipline. And besides the need to protect society
and the need for community retribution the reason for de-
taining a person in a correctional centre is to teach dis-
-49-
cipline. One of the main purposes of the proposed factory
is to allow a man to gain the self discipline needed to get
out of bed in the morning, leave on time to catch a bus or
other transportation, to arrive at the time clock on time.
It would further allow him to demonstrate his ability to
produce a full days work, respect others in the work place,
observe all safety and production rules and take direction
from a supervisor. If the worker is having difficulty with
his social interaction in the workplace he would have the
residential staff or correctional worker to discuss and work
through his problems with.
Many of our target group lack the skills to fill out an
application form properly or to conduct themselves in a
positive way in an interview situation. In fact we believe
that for some men it is less frightening to return to jail
than it is to go through an employment interview. Along with
St. Leonard's House resident's inability to go through the
job search process, many employers will not hire those on
parole or ex-offenders. It is true that there are some res-
trictions on the questions that can be asked a potential
employee in regards to his criminal history. However, a
skilled interviewer can determine that one is an offender.
It is nice to think that they are not stigmatized but that
unhappily is not reality. The first few months outside the
institution are the most critical. One must find a job,
reconcile with old relationships (family, etc.) or develop
new relationships, make the adjustment from the institutional
value system to the values of society and deal with such
-50-
personal problems of alcoholism, gambling, anger, to mention
a few. If a man is active and has a sense of accomplish-
ment, and a sense of belonging because he is contributing,
he is more likely to have a good positive attitude that will
allow him to deal with his social problems. Having a place
to go each day where one can be productive and have a few
dollars in his jeans fills this bill.
Another reason for such a project is that if a man has been
incarcerated for a fair length of time he naturally identif-
ies with that peer group. There are occasions when a man
gains employment but has difficulty fitting in with that work
group because of the lack of identification. He may need
that time afforded by this venture to work with a group he
identifies with, until he can work through some of his prob-
lems. This is the basic reason for the success of such self
help groups as Alcoholics Anonymous - group identification.
Of course there will always be those who simply are too lazy
to work and choose to live a life of criminal activity.
The process of parole or temporary absence application and
admittance into our programs should screen out most of these.
The process of the job interview should further screen them
out. Some may change their attitudes and become good workers.
Those who demonstrate their lack of desire to participate
as a productive member of society will be dismissed from
the project.
I
The project will not be designed to effect those with char-
acter disorders, deep seated resentments or emotional in-
stability. It is designed to be a continuation of what St.
Leonard's has done so well over the years, to be a buffer
between institutional life and full society, and to be as we
have been moving in recent years more to the front of the
system in being an alternative to incarceration.
If this project over a five year period was to be effective
in part in stopping three men committing crimes, that would
mean five years incarceration, the initial investment in a
dollar sense would be justified. We know it will do far more
than that.
This proposal is crime prevention at its best. Effective
crime prevention is not producing glossy posters to put on
walls or mall displays and pamphlets to hand out to the
citizenry, it is changing the fundamental attitudes of those
who have, or have the potential to go beyond our social norms.
That is why the project.
-52-
2. WHY LONDON?
a. Because St. Leonard's House, London has a good record and
is prepared to attempt such a model venture.
b. St. Leonard's House, London, with a present bed capacity
of 51 is large enough to handle such a venture. At any
given time there will be available at least the fifteen
men required to operate the project.
c. Because St. Leonard's London has an even split of 50%
Federal and 50% Provincial cases in residence, this
agency lends itself well to a joint venture with the
province.
In further support of the above a recent check with
local provincial authorities revealed a total of 1,135
probationers in the greater London area and 83 provincial
parolees. At a very conserVitive estimate, on any given
day at least 200 (the number could be much higher) of
these people would be unemployed and able to take ad-
vantage of the project.
d. There are other excellent training facilities in the city
that will complement the project. There is a community
college and a major university. In fact one suggestion
given to us was that along with the IKEA Project, we
establish a co-operative training program with Fanshawe
College. There are also good social services in the
community for support.
e. London has a fairly stable economy, so there is a better
chance of long term employment after this traiting period.
-53-
f. St. Leonard's in London is a long established' social
service agency and should be able to deal with any
adverse reaction from the community.
SECTION TEN
THE WORK FORCE
10. 10. THE WORK FORCE
1. GENERAL
a. The project, to be viable, must have constant turn-
over to ensure the greatest amount of participation by
the target population.
b. The individual must be contracted with for a maximum
period of twenty-eight weeks. This contractual relat-
ionship could be extended in cases that warrent it,
to be determined by the project manager.
This time period would allow him to be eligible for
Unemployment Insurance benefits if he required it. It
also fits in to the time frame the Canada Manpower
Industrial Training Program is set up for.
This time period will be another measure of the degree
to which the man can accept responsibility, and in the
cases of Day Parole type releases, will be an indi-
cator of whether he should be in the full community.
C. There must be the ability to enter the worker onto the
production line quickly. Two suggestions are to have
another smaller department producing products on spec-
ulation or a casual labour pool. The reasons are as
follows:
1. High potential for workers not to show up at the
required time and the need to keep production
going.
11. 20% of our residents do not complete the resid-
ential program. It is possible that a higher per-
centage will not.complete the work program because
-55-- 55-
most of the 20% will be in our target group.
However, it is just possible that the work project
will have a positive impact on this group and
decrease the "failure rate".
d. The fact that our labour force is transitory is a plus
for the more automated production line proposal - less
training time and less risk of injury.
e. The production line is most realistic because this is
the type of work most of our target group would be
going into, in the general work force.
2. STATISTICS
Statistics gathered through the Correctional Service
office in London, Ontario
a. Clients sentenced in London area who evidence a
desire to return to London on some form of release:
Total Pen Placement Reports completed • from October 1982 to October 1983: 82
Number of above PPRs which had a com-pleted Community Assessment, indi-cating some community support: 52 (64%)
Number of above PPRs which had a request for CA for Day Parole, Full Parole or Mandatory Supervision received within one year of their sentence. 27 (33%)
The above would seem to indicate that approximately
half of all clients sentenced from London have some
type of support within the city (area). It must be
taken into account the number of clients sentenced
within the last year that are not eligible to apply
for any type of release as of this time. This would
-56-
account for the lower number who have actually re-
quested a release to the London area.
b. A survey was taken during two months of 1983
(April and October) to discover a sample figure of the
number of clients who apply for release to London who
have no employment prospects. A survey of the
Community Assessment was completed (normally a CA
will indicate employment prospects if the client has
a marketable skill or a firm job offer) and the
following information was discovered:
1. April 1983
# of Community Assessments completed for Day Parole, Full Parole or Mandatory: 10
# of clients who had job offer: 0
Note: of the ten clients, six had no job offer, one was offered seasonal employment in tobacco, and one had his name on a list for a truck driver. The other two has possible employment through relatives but prospects not hopeful.
11. October 1983
# of Community Assessments completed for Day Parole, Full Parole, or Mandatory: 20
# of clients who had job offer: 0
Note: of the 20 clients one was being admitted to St. Thomas Psychiatric Hospital for Addiction Treatment Program, four mentioned further schooling but had taken no action as yet, two had a trade (welding and auto-body) but no job offers and two others were not accepted at St. Leonard's. The other eleven had no employment mentioned on the assessment.
a 1
el
si .8
c. Number of new releases or transfers in Day Parole,
Full Parole or Mandatory Supervision (includes volunteer
e. Employment Statistics (number of clients employed as at October 31, 1983) (includes volunteer clients but not agency clients):
Unemployed Unemployable/ School
Day Parole 8 8 2 Full Parole 37 15 8 Mandatory 3 11 4
Release Type
Employed
el -58--
3. HIRING AND DISMISSAL
a. Selection of those employed in the Work Project will
be the responsibility of the Work Project Manager.
Referrals can be made by St. Leonard's staff, C.S.C.
staff, Ontario Probation and Parole staff, self or
other social service agencies.
The works manager will not be given the prospective
employees criminal or social background. He/she will
make the decision on their suitability to work in the
plant, on the basis of work history and the interview.
The works manager will be told about anything that
might effect his performance or the other workers:
i.e. a propensity for aggression.
b. Dismissal for unsatisfactory performance will be the
responsibility of the work project manager. He will
make sure that the guidelines of the Ontario Human
Rights Commission and the relative labour legislation
is followed. There will be no consultation required by
the manager and no appeal by the referring agent. The
manager will only be required to report the reason for
dismissal to the referring agent. It is important to
state that dismissal from the project need not effect
the man's legal status. That decision will be between
the CSC/MSC staff and St. Leonard's staff. The works
manager will not be a party to that decision making
process.
c. Although we envision the factory to be open to other
employees besides St. Leonard's residents we will
insist, since St. Leonard's are administrating the
project, that residents of the houses be given priority
in the selection. This can be done by the manager
putting those who are acceptable on a waiting list
with St. Leonard's residents going to the top of the
list. Since a natural turn-over is expected there
should always be movement on the list. Those on the
list could serve as the casual labour pool, would
be another measure of the candidates acceptability
for the workshop.
d. The work project will be open to female offenders under
either Federal or Provincial jurisdiction. This will
allow us to assist that particular group. It will
make the factory a more realistic work environment
and it meets present human rights thinking.
e. This factory must not only be, but must be perceived to
be, separate from the program centres and not an ex-
tension of the "system". It must be operated as a
business, not a sheltered workshop or a social service
agency. The manager and the two senior supervisors
must be business and woodworking managers, not social
service workers. Without this approach the project is
not viable. In our thinking this is where similiar
endeavours fail, or do not reach the ideal goal of being
a realistic work place. That is they are not operated
-60-
solely as a business.
4. MOTIVATION
We all need a reason for doing something. The follow-
ing are the reasons that a man may wish to perform
well in the project:
a. an opportunity to make money
b. it may help his release plans
c. he can earn increments in his salary
d. the possibility of being referred and recommended
to a community employer
e. the opportunity to stay with the company as a more
permanent or supervisory staff member
f. the opportunity to prove himself to himself
g. the working conditions will be good, with a well
designed and safe production line
SECTION ELEVEN
COMMUNITY IMPACT
j
11. COMMUNITY IMPACT
a. No matter what the unemployment rate in the area is,
whether higher or lower than the national average, it
will not directly effect our target group. This is
because they are among the least likely to be employed
in any event. So even if the unemployment was to be- ,
come low, our target group would still be among the
unemployed.
Because this project is an import replacement, we are
not taking jobs away from other workers, we are creat-
ing them. We also will be aiding workers who could
not be helped simply by an upswing in the economy. We
will be aiding a hard to employ group at any time and
therefore the impact on the community has to be seen as
a positive one.
We might further add that we will be purchasing goods
and services and benefiting the community in that respect.
b. It is reasonable to assume some community opposition
simply due to right wing views that are held by certain
factions of the community. The suggestion is that
publicity on this venture be kept to a minimum in order
to avoid any sensational journalism.
There are concerns such as - it would draw offenders
from other locations who would not ordinarily come to
London. We do not see it altering to any degree the
profile of our existing population.
This is already happening since the staff of Correctional
-62-
Services Canada, on many occasions, encourage inmates to
re-locate to areas where they are unknown, to get a
new start. We do not anticipate an increase in non-
London residents as we are not guaranteeing employment
to the project.
c. We have spoken to Mr. Bob Sexsmith, the president of the
London Labour Council, who are quite supportive of the
idea in principle, as indicated by their letter. See
copy of letter in this section. They wish to have
further discussion and involvement in the project. Mr.
Sexsmith himself has a number of ideas around a co-
operative training program.
d. The Citizens Advisory Committee to C.S.C. has discussed
this venture and approved it in principle. See copy of
letter in this section.
e. Mr. Art Bates, the placement manager of Fanshawe College
who is also on the London Chamber of Commerce is quite
prepared to assist us. Mr. Bates is the vice president
of the Business Development Committee and is on the
Education Committee of the Chamber. He sees utilizing
his nineteen years experience as a career counsellor
primarily in the referral aspect of the project. How-
ever, we would also envision him helping set up the
actual career counselling component of the program and
obviously he has some influence with the business com-
munity in the city.
-63-
f. If we can offer even short term work to men who would
be in the community anyway and reduce the risks of at
least property crimes, such a project cannot help but
have a positive effect on the community.
Historically St. Leonard's has been of great value
during the transition period from institution to the
community. This work project is a continuation of this
role.
7emr
4_,Concion (St 1)isfrict ,CaZour Copmcil
Chartered in 1957 by
THE CANADIAN LABOUR CONGRESS
November 15, 1983
Mr. Jeff Wilby Executive Director St. Leonard's House 430 William Street London, Ontario N6B 3E2
Dear Jeff:
At the November 9th meeting of the London and District Labour Council, the following motion was passed by the delegates: "that the London and District Labour Council support in principle the St. Leonard's House proposal to operate a training centre (to build wooden furniture now being supplied by off-shore industry) and employ ex-offenders presently unable to find employment in the community".
We applaud your efforts to address an important need in our community and look forward to meeting with you in the future .
Citizens' Advisory Committee to The Correctional Service of Canada
Comité aviseur de citoyens au sein du Service correctionnel du Canada
83 11 16
Mr. Jeff Wilbee Executive Director St. Leonard's Society 430 William Street London, Ontario N6B 3E2
Dear Sir:
Re: Manufacturing Proposal
Thank you for sharing your proposal to establish a Manufacturing Company to provide job opportunities for Parolees. As you must be aware, the Committee was very interested in your presentation and supportive of the project.
The project is certainly an ambitious and necessary one. We as a Committee will support you and your staff in any way that we are able.
Good luck with your proposed endeavour.
Yours truly,
JJR*fhs
SECTION TWELVE
COMPLIANCE WITH POLICY AND PROCEDURES
es
•0
1 I I l I
.1 1
al
12. COMPLIANCE WITH POLICY AND PROCEDURES
a. St. Leonard's goals were stated by our founder Father
Libby, when he said in London during 1968 "I can see a
day when a philosophy will evolve, going beyond simple
housing and helping ex-convicts. A time when St.
Leonard's Houses will become models for prisons;
places where a parolee will become involved in working
and contributing to the community in which he lives,
and eventually where convicts may be housed and treated
in like manner."
This is still our goal and the Work Project will be
another step in that direction.
b. The National Parole Board's publication "The National
Parole Board and the Private Sector....A Relationship
Defined", item #12 states:
"The Board, in connection with the Ministry secre-tariat and the C.S.C. will encourage the non-governmental sector to develop and operate in-novative programs in areas such as life skills, residential facilities for specific types of off-enders or in remote communities, job finding and employment counselling services, volunteer workers, half-way houses operated by private citizens, shelt-ered workshops, wilderness camps." (Note the under-lining is ours).
This strongly states that the proposed workshop not only
falls into the policy but is to be encouraged.
c. 1. The Correctional Service Canada Case Management
Policy and Procedures Manual, Chapter 14, Community
"That the Centre clearly state its employment/ vocational training and educational programs for its residents".
This states that programs such as the proposed work
shop and training is in compliance with the intent
and the letter of this policy manual.
11. Chapter 15, Non-Residential After Care Agencies,
Section 15. 1 Purpose states in part:
"As privately operated organizations, Non-Resident-ial After Care Agencies have their own objectives. C.S.C. may contract with and use those agencies wherein the objectives complement the following C.S.C. objectives".
"To provide counselling and support to conditionally released inmates in coping with difficult family, employment or other social relationships and other frustrations and problems".
The proposed venture meets a stated C.S.C. objective.
The best type of employment support for a conditionally
released inmate is to provide him with work during the
crucial initial period back in the community. Although
we are not a strictly Non-Residential After Care
Agency, this program is, and will be run separately
from the residential programs.
d. CORRECTIONAL SERVICES CANADA - HISTORICAL LOOK AT
INMATE EMPLOYMENT (APRIL 1981)
This publication in part states:
"The Correctional Service of. Canada is currently pursuing a policy of providing employment op-portunities to all inmates capable of working; excluding those in segregation, psychiatric centres, or in regional reception centres. The newly ereated Inmate Employment Branch is responsible for implementing the new work policy".
-68-
Since just about all the Federal inmates in our centres
at any given time are on Day Parole, still inmates and
on the count of their releasing institution, this
project falls within the stated policy of the Inmate
Employment Branch.
e. A prejudice against hiring ex-offenders does exist in
our community. For this reason we must classify the
majority of ex-offenders as having a disability in
regard of finding reasonable employment.
In respect of compliance with the "Human Rights Code,
1981" we quote from the overview:
"An employer may implement a special program de-signed to relieve hardship or economic disad-vantage, to assist disadvantaged people to achieve equal opportunity or to help eliminate the kind of discrimination forbidden by the Code. A special program that meets these requirements d(7)es not contravene the Code".
Discrimination does exist against people with a record
of offences and to set up this workshop, which can be
viewed by other employers in the district, will help
to eliminate some of their fears with respect to
giving ex-offenders an equal opportunity.
f. The St. Leonard's House, Brantford and other similiar
types of employment programs have set a precedent for
this kind of venture.
Although this is an innovative program, it clearly falls
within the policy and objectives of the N.P.B., C.S.C.
and St. Leonard's.
-69-
I 1
SECTION THIRTEEN
ADMINISTRATION OF PROJECT
13. THE ADMINISTRATION OF THE PROJECT
The works project manager would be responsible for meeting
production schedules, quality standards and the day by day
operation of this plant. He will report directly to the
Executive Director of St. Leonard's House, London. He will
be in Authority Level Four (1V) on St. Leonard's organiz-
ational chart, at par with the residential program
directors and the business administrator.
It has not been decided as of yet whether a bookkeeper-
secretary will be hired to be at the factory, or whether
the existing administrative staff will be expanded and a
portion of the administration expenses allocated to the
project. Although we can operate under our present charter,
we plan on operating under another non-profit charter with
the principals being two board members of St. Leonard's
London and the Executive Director. These principals
will report to the senior board.
We have made application for an Ontario charter and were
turned down because the name St. Leonard's Enterprises
(London) Limited was too general and because the words
'Enterprise' and 'Limited' were not acceptable for a non-
profit charter. We await word from our lawyer but assume
we will re-submit under another name.
es
SECTION FOURTEEN
PROPERTY REQUIREMENTS
J
14. PROPERTY REQUIREMENTS
The type of area required for setting up a woodworking
shop to produce chair units as previously outlined is:
Approx. 30,000 ft. 2 , one level, light machinery
Location: London, Ontario
Three approaches have been considered in respect of
property.
These alternatives are:
1. Purchase land and construct new factory
2. Lease newly constructed facility
3. Lease older type established building and re-
furbish where necessary
a. Alternative No.1
Brennan & Pinnock Ltd. have not investigated the
first alternative. Should the workshop prove to be a
success a further investigation would be warranted on
alternative 1.
b. Alternative No. 2
Approaches have been made on this option and we include
copies of correspondence on the following pages. We
cannot however recommend taking this approach because
the cost is not proportional to the benefit of leasing
new property.
c. Alternative No. 3
This is our recommended approach route to meet property
requirements.
-71--
Included on the following pages are properties currently
available in the London, Ontario area suitable for the
objective purposes of this study.
It should be emphasized that these properties are
available at the time of preparing this study. If
immediate action is taken to proceed further on this
project we are confident that these properties will
still be available and leasing rates can be re-
negotiated in favour of St. Leonard's House, London.
Property el at 1881 Huron street, is the most suitable
of the three properties viewed. Some refurbishment
work is necessary on all the properties and we have
included an estimated cost to cover this item in our
final analysis.
CONSORTIUM
Property Development
and Investment
October 5, 1983
Neil Brennan Marketing Limited 68 Byron Avenue East London, Ontario N6C 1C7
8. Fire pump, ring main, water reservoir are not included with
the sprinklers
The minimum annual rent for the foregoing will be $149,840 net/net
based on a five year term and amortizing tenant finish costs over
the lease period. However, should you wish a ten year lease with
a step at five years, the minimum annual rental for the first five
years will be $130,000.
Operating expenses for 1983 have been levied at 26 cents per
square foot which would be $8,320.00.
City taxes, gas and P.U.C. charges are not included in the above.
Should you require any further information, please do not hesitate
to call me.
Yours very truly,
Christopher E. Harris Property Manager CEH/da
-Dell. I
3E1079 W32.007 S.F.N.N.
MTGEE MT ADD.MTO.INib
Ms. MMM.
HeM Hydro Water
YES YES yrs
POSS E&DE 30 DAYS
occumoZ KEYS 1.02 —
HowSee0 AFICkEX
PH -
SP • PH s, PGR
# 1
1881 Huron Street
AVIi81 HURON $T., LONDON PT 13,
NA CLARKE -RD. sooino es. ifdp. . pim 876 I LTred 131. o Tx #to . OC.m:a LT 589.3e
FACT WHSE X./ OTHER 0 ACRES
à YFBAS_i,EigRo SZ FRONT,
ACE INMs. MARY( I...Me MD .
1 IYEs . LAND
MAKING SP
CfFICESP 1,175 S.F. MTG AMT INT EX Ist 2nel TOTAL TAXES /83 $11,016.00
91:n.1 s.r.
EXP, 19 OWN Tes
TOTALS
REMARKS:
...Tie. . INCOME - LEASING AREA RDS. lem:P >or Month or Year 8 Rail rid. 0 Bays El Clearance Ft. 16' NO Sa It. our $ 1114 .9 lp•Ielarbs t il Doçk L, CU Dave Inn 0 Gross Income $ Helm. Volts Atrias BO Plat:a ...m.2_3 Leas E.. G Ni es Go. M. — a Won s.,, Terms Mm. Mas. HeasOftG A c, 0 Sprinkler t?
VPM Head Lease CI Sub Lease 0 Elevl. 0 Bus Wash,. ,,,,4 17,000 S.F. OUTSIDE FENCED STORAGE AREA AVAILABLE
• INCLUDES'1,175 S.F. OF OFFICE PLUS 506 S.F. LUNCH ROOM PLUS 506 S.F. STOCK ROOM.
MOME.LEASING
The vendee wer,ehle \hot/hi, PfePOGY C0813 not Insulated with urea formaldehyde loam
OwNSIFTON PROPERTIE8 L/M/TEPBKR —
P.O.ADD 785 WONDERLAND RD. 471-0850
PH DATE 83/2/15
Location - S.W. corner of Clarke Road and Huron Street
(bus service) next to Northern Telecon
-30,000 square feet of space, including
1500 square feet offices
- sprinklered w 15' ceilings
Features
- 2 loading docks, 1 grade level door
- 600 AMP, 3 phase power
- good lighting
- fenced in compound
- available December'83
Price $2 sq.ft.net net net*
* Net net net charges typically average about $1.25 sq.ft to
$1.50 sq. ft. per annum.
-.75-
#2
ffiots6o 2 NOS NT
48 Burslem Street wer7507sr + UT I L
ADO
48 BURSLEM STREET, LONDON . NR HALE so 01 HO ZOHEAvy IPL LT
0 I 1 . LAND _.--_,---_,.,a..,•,.,-- ' .., , ..„2..e' •
CLOG SUE s hpoo [7, ..., 111400 %F.
TO Amr MT MTGEE PMT
" SPACE FOR LEASE IS THE WESTERLY 2/3 OF LONDON STEEL. 2nd
e : „ tt • ,
- - '
SITE PLAN AT L.O.
7.2:r1
Adj./ -t.ITG 1NF 0
W
INCOME • LEASING
see Month NX•N•lv S 8 1 25 J_L eff s 1
GrossIncnnteS
Lums,ILOP.s Teeto:Mul
eeglYLS C .• GMrIOJ f]Do[elle LL8 ‚Ott
Hydoo. Volts Antos. Pluna
Gas M Sponk ls• ci
Head LeaseINSIal•tease0 tie, El Bus SAN.FACINI« MULTI -PURPOSE WAREHOUSE-MANUFACTURING SPACE WITH VARYING CEILING HEIGHT, RAIL SIDING 4
REMARKS: OUTDOOR STORAGE.
POSl• The vendor warrantylha% this pioperly DM Is not Insulated voth won fo ■ oLSdohyda foam SLOE 10 DAYS OMTYRK RUSSELL INC. OKR JOHN THIEL REAL ESTATE com om KM,
ATTN: JOHN ANDERSON P.0 .A0 D ABOVE " 434-8441 LIMITED 7+3
R' GARY POLLOCK so 1 R„„,emn SON
itAgre.' e N.
" 451-1140 DATE83/4115. 11
Location - near the intersection of Dundas and Hale Streets
TOTALE
60E IABCDEX
- total of 65,000 sq. ft. available. Owner will
subdivide 30,000 sq. ft.
- former London Steel Fabricating space
- ample power
- varying ceiling height ( from 16 to 60 feet)
- rail siding and outdoor storage
- available immediately
Features
Price asking $1.50 sq. ft. net*
* Lessor pay taxes, lessee pays utilities. The rental rate
may increase slightly, say 25¢ per sq. ft., to facilitate
construction of dividing walls etc.
1700 Dundas Street
1.! , •: •
1200.DUNDAS STREET LONDON rao mam zE1ND. In 483 I LT R R
0EscsERVICE/ CGM
200.34 BELOW '
INDUSTRIAL pilingS ZJRREG• FACT al WHSE nit' GrEMEFELMREDNE-
ASS SS la
06, 790
EMT ADD. MTG. INFO
LOT NO. LOTS 1112 - 126 • 95
TA3LES,:._SUI,450,(H1 • I AREA ROS.
Rall Rd. 1:1 Bays 0 Clearance Pt.
(trade L. Dock L. 0 Drive Inn 0
Phase
Geld
H dro. Volts Am's.
HP. 'G AC Sortnkler ramie
leigeleel-AnTneeIX flifflOWFIANUMGVeING'FACILITY' WITH FULL MANUFAeURING BASEMENT'. spAcrous, MANUFACTURING 'FACILITY' WITH FULL MANUEACI`URING BASEMENT•
1055 The vendor werrantsthelthle properlYNEUGe not Insulated watt urea formaldehyde foam E&OE
MAIN BUILDING: encesnomom
5609. S.F. P. :pRopuctioN AR4Â
.11,000 SQ, FT. UP:BEMENT •
16,600 SQ.TT
OfFeE SP 5600 S.F. MTG AMT INT EX
CONSIDER CLEAR and LOT SIZE 200.34 X APPROX. 618'
lemE.LEAsING
No smhom$
Leaser Ems, Term: attn. • Max.
Head Lease 0 Sub Lease
MTGEE
Heat'
Aps7PAygla TOTAL 33,200 SQ.FI - •
•
60 DAYS DYEAR CANADA INC.
P.O.ADD21 POUR. SirONS PL. WINGZON, m913
NENUF G 416-626-4611 "Ter3•OS
BKRJOHN THIEL REAL ESTATE PH 434-8441 LIMITED SP GARY POLLOCK PH PG11
Elm Mete' S° How Seen?
601 A BCDEX
Location
Features
#3
- Dundas St. East between Highbury and Clarke Rd.
- 33,000 sq. ft. on two levels
- conveyer belt between floors
- former "Craftsman circle" furniture manufacturing
location
- ample power
- 3 loading docks
- showroom and offices at front
(needs some repair)
- to be negotiated ( probably $1.75 sq.ft. to $2.00
sq. ft. net net)
Price
-77-
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9 3 1 .
Non-IMPARK
SECTION FIFTEEN
MACHINERY REQUIREMENTS
15. MACHINERY REQUIREMENTS
1. IKEA SOURCE
Brennan & Pinnock Ltd. received a telex from IKEA
Limited dated October 3, 1983, copy enclosed in this
study on pages following this section, giving a list
of equipment needed for set up of a chair factory.
The total cost of equipment = 1,735,100SK F.O.B. Sweden
- $289,180
The list of equipment is not complete in all respects of
what is required to set up the new workshop.
IKEA have promised to give a revised list of equipment
which will be complete in all respects. This will not
however, be ready before the time of presenting this
study in Ottawa. Final selection of equipment will also
depend on the layout of the property. The property lay-
outs of the three sites viewed vary and this will affect
any cost given against equipment selection and instal-
lation.
The costs do not include for the following items:
small power tools and other equipment spares for machines tooling up machines dry kiln extraction system freight/shipping property refurbishment ' mechanical and electrical work
Estimate does not include also Brennan & Pinnock Ltd.
design/set up fees, Consulting Engineers fees and City/
Hydro permits, inspections etc.
-7: -
II
I1 , Adi PRICFS IN SFK EX FACTORY :«UFTiEN nP nFPMPNY.
IN OTHER WORDS, IF YOU DIVIDE ALL THE SEK WITH 6 DOLLAR VALUE. '
.,“ TUU
1 1
-80-
RFGARTiS
PALLE
* Ill NEW IKEA VCR
Ill liNEW IKEA VCR OCT 3 83 TLX NO 9
• II ATTN: NEIL FRENAN
EFLOW YOH wILL FIND AN FIDHIPMFNT ii.TOPT FOR A CHAIR ÉACTORY,
• CAPACITY ABOUT 38 (DICK ASSEMBLY CHAIRS . PER HOUR I
II IF YOH ADD THF COSTS FOR CHANGTNG THE ELFCTRIC TO CANAPIAN STRN+ARDS AND T•F FRFInHT, YOH WILL MOST SHRFLY FND HP AT
1 AROUNrt 4erio-lieci. DOLS. THIS IS CALCHiRTFil WITH TWAY'S 111 FXCHANU RATE 1 DOL = i-,,iiii sFK
GET THE
RUITIONAL COSTS FOR CSA-FLFCTRIC NOT YET INCiHDETI.
MACHINES RFCONUITIONED IF NOTHING ELSE MFNTIONFP. 1 MU_
12) WIIMSMEYER EDGF.SANDING MOULnING MACHINE KKS I. SFK 36.0889-
13) RLDINGER TABLE SPINDLE MOULDER. SEK i7,200-
14' SCHWABEDISSEN THICKNFSS PLANNFR 888 MM. SEK 21.8809-
15) nAFNOKFRT SRNDER 700 MM. 2.SANRING HE SFK 94.888,-
16) UFNjAKOB SPRAY MACHINE 888 MM, 4 PISTi SFK 118888,-
17) WEMHOFNFR TUNNEL DRYER W 128 L = 25 INCL. 10 TROLLEYS.
•SEK 950~ - 18) , ERNST LAME SANDER EG 2
SEK 68.8881- • 19) SPECIRL.DRILLING_MRCHINE FOR . Y.D-FITTING
SEK ABOUT 140.888,- NEW 28) BACCULONG HOLES DRILLING MRCHINE
SEK 19.280,- ,
11 3
DELIUFRY TIME: ABOUT MONTHS -81-
4
1
J
2. ALTERNATE SOURCE
As an alternative Brennan & Pinnock Ltd. approached
Allied Woodwork Machinery Ltd., Toronto and a copy of
all information provided is included in this study on
the pages following this section.
The total cost of new equipment = $437,485.00 F.O.B. Toronto
This cost does not include for the following items:
small power tools and other equipment spares for machines tooling up machines dry kiln extraction system freight/shipping property refurbishment mechanical and electrical work
Estimate does not include also Brennan & Pinnock
Ltd. design/set up fees, consulting engineerings fees
and City/Hydro permits, inspections ! etc.
1
•1
-82-
I
1
SI
4 allied 453 signet
dwrorkin ac tog mtarhin . .:1
7 1td. 5
746.0157
October 5, 1983
Neil Brennan Marketing Ltd. 68 Byron Ave. East London Ontario N6C 1C7
ATTN: NEIL BRENNAN
I am pleased to offer you equipment suitable for producing the two types of chair according to the drawings provided by you. The following list of equipment is only an estimate which will help considerably with your budgeting and decision making. Ihere are various options you may wish to consider before we submit a._ final o'ffer with full details.
MACHINE PRICE
2 Nelson Atkinson NA 800 undercu,t saw $ 6,400.00 2 sets of infeed anti friction conveyor $ 500.00 2 sets of outfeed powered conveyor and $ 7,000.00
stop bars. .
1 Cosmec 5M250 multiple ripsaw $17,000.00
1 Verboom VP-180/5 head moulder $27,800.00
1 Poitras V-154 radial arm saw' $ 3:395.00
1 Framar 700 28" bandsaw $ 2,850.00
1 Ortza 8' stroke slide table saw $ 7,350.00
1 Griggio 12000 spindle shaper $ 4,250.00
1 Balestrini MINI-C 2 head profile shaper$19,000.00
Installation and tooling will be extra. Accessories such as a fork lift truck, pallet trucks, conveyor rollers, power tools will have to be considered. To avoid excessive delays spare parts should be ordered For some of the more sophisticated machinery.
I hope this information is helpful and look forward to discussing this offer further.
page 3 cont.
Robert Wealler Allied Woeworking Machinery Ltd.
Yours veryjuly,
—85—
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PIALLé A SPESSORE
GRIGGIO G.8‘10. 11 ' 1 I s I II • II
• - - \ p -
T 2000- TC 2000 - TPL 200088_ TOUPIES
IliERMWOOD
Number of Axis Configuration . Mounting Position
Coordinate System Drive System Load Capacity . Horizonta Stroke/Speed Vertical Stroke/Speed Rotary Stroke/Speed Wrist Rol.:Travel Speed Wrist Mo. ement Repeatat ty Centro' S., stem
Memory Type
MemO'y S ze
Number of P•ograms , Random Selection
Operating Modes Programming
Ed , ting Adpstable Playback Sp 0puts Inputs Interface Hardware
The PAINTMISER industrial robot is an intrinsically safe.servo co-troll-ed six axis continJous path robot designed primarily for spray pa ', ling It has features not previously available in spray painting robots yet sells
at a surPr'S , ^g'y loyv price Backed by Thermwood's reputatio- pro-
viding Io w cos' nigh performance automated eq, , pment the z.'4.NT.
MISER Ca' c, costt and .ncreaSe throughput in your spra, application
FLEXIBILITY The P,AINTMISER offers a large. flexible working e - ..elope cari
be talIorect to soecia: needs Jzilizing a fixed pivot point ir. the ce - •e• of
the upper arm Trie solid slate. computer control system car s•cre up to 8 programs With the disc memory option this can be increased to
500 prog•ams and 5 hours of total programming time. A- ec.ting
system allows corrections to a Program, either motion or gur. trigger.
ing w , thout removing the machine from production The speed
cycle/line sychronization option allows the robot program speed to ,change ir direct relation to conveyor movement These features pro.
vide a ne' !eve' of flexibility to spray painting robots
RELIABILITY .
The control system for the PAINTMISER is designed and manufactured
by Thermwood Corporation. Years of experience in control system
manufacture have been drawn upon during the development of the PAINTMISER The completely solid state control has no moving parts
and is more tolerant of humidity, dust and temperature The disc
memory option is hermetically sealed and designed for use in rugged
industrial environments. At the push of a button a diagnostic system
runs in•depth diagnostic tests quickly isolating any electronic probiem
The mechanical design of the PAINTMISER is simple and stra , ghtforward
util.zing standard components that can be quickly and easil> replaced
if necessary The rugged design. diagnostics and yea's o' control
system experience assure reliable performance
EASE OF PROGRAMMING The PA1NTM1SER is programmed using the lead-throJgh leact• metnod The tie:weight composite arm is counte••ba:anced a"c.r..-p easy
movement through the desired sequence The hydraulic s•ys•em is
bypassed .;sing a se•ies of manuaI valves l•cated on the P.:t..310'S
The by,C,aSS reSulIS in less fluid friction tha - o•her sys•e—s a - c mus
reduces. :he effort necessary to move the am A editing
system a •ows the p - ogram motions to be mod f.ed one ax s a• a until the exact desired result is achieved Gur tr.gger:ng .s ec ted to reduce overspray Using this metnod the program deve.opec s more
exact, mo•e efficient using less materia than your best scra y e• even
Neil Brennan 68 Byron Ave. E. London Ontario Canada N6C 1C7
ATTN: NEIL BRENNAN
As a result of our further discussions, concerning the possibility of supplying used equipment for the chair manu-facturing plant I have provided a list of estimated used prices:
Only modern used machinery with available spare parts should be considered. All the equipment listed could be supplied in good working order with a warranty. Of course used equipment would be subject to availability at the time of ordering. Some machines would probably have to be pur-chased new because they are specialised or very recent technology. Examples are: spray paint robot, overhead con- veyor system, KD drilling machine. We did not offer a KD drilling machine in the last quote. This would be a Doucet custom built machine, approximately $21,000.00.
If spindles for chair backs and round and tapered chair legs are to be produced, an automatic lathe would be necessary. It could be either a Goodspeed shear knife, or a Diehl rotary knife lathe. New price, depending on customer requirements,
cont. on page 3
1
elt
1
eit J 1
1 -95-
1
% 41‘ allied 453 signet
wdrorkintg mach. in9e1 7 1td. 5
746.0157
page 3 cont.
approximately $45,000.00 Used value $25,000.00. Tooling for such machines is expensive, possibly $15,000.00 plus.
The cost of installing a dust collector with ducting is roughly the same as the cost of the collector itself, $34,000.00. Fume extraction is required in the finishing area. Allow approx- imately $6,000.00. Spare parts should be ordered for most of the equipment, allow as much as possible, at least $12,000.00. We do not supply fork lift trucks, you will probably require one. A guide to tooling required for the equipment quoted:
8 multi rip blades
4 cut-off blades
4 cross-cut blades
10 bandsaw blades
10 moulder cutter heads
2 panel saw blades
2 rip saw blades
16 planer blades
100 router bits
300 drill bits
50 slot mortise bits
1 round end tenon head
2 profile shaper cutterheads
8 sanding wheels
8 buffing wheels
cont on page 4
1
• 1
I
Robert Allied
aver oodworking Machinery Ltd.
—96—
4 • allied
453 signet dwrorkintg mach. in9e1 r1y5ltd.
1 I 746 •0157
page 4 cont.
•11 24 cloth wide belts
50 cloth narrow belts
Allow approximately $17,000.00 for the above items.
A guide to power tools required for this operation:
4 spray pots and spray guns
5 hand sanders
5 hand buffers
5 screw guns
1 drill press
1 bench grinder
1 bench vise
1 complete toolset
1 nail puller
1 manual strapping machine
5 mallets
40 assorted clamps
3 pallet trucks
Allow approximately $6,000.00 for the above itmes.
I hope this information is useful to you. I look forward to providing a final detailed offer to you.
RW:ss
Yours ve4 1 t4uly,
4. OTHER COSTS
We reiterate our earlier comments that the final cost
of equipment, installation, refurbishment will de-
pend on the layout and condition of the property to be
utilized for the factory.
We have however suggested below preliminary "ballpark"
figures which can be used for the purpose of this
study:
1. Brennan & Pinnock Ltd. design/set up fee $ 45,000.00
2. Mechanical & electrical work $175,000.00
3. Refurbishment $ 10,000.00
$230,000.00
5. SUMMARY
Cost of equipment $360,000.00 including freight/shipping
Cost of other services $230,000.00
Total cost of setting up factory $590,000.00
Budget cost for this study $600,000.00
/1"
SURFACE TREATMENT TECHNOLOGY FOR
TABLE TOPS OF SOLID PINEWOOD EXECUTION
NATURE -
1. The moisture ratios of the wood must not exceed 8%.
2. Final sanding before surface treatment:
140 paper (minimum) or corresponding degree of coarseness.
3. VERY IMPORTANT: The undersides must be treated once with clear
lacquer - preferably plastic lacquer (in order to prevent the tops
from getting bent).
Top side:
a) 1 x first coat for light kinds of wood.
Type of Lacquer: Vinyl or cellulose/urea resin added with
white pigment (2-3% titanium dioxide)
90 - 100 GR/m 2 to be applied. (If buying from Chemcraft/Sandolin
• it's called Sealer 390-739)
- Drying
- Intermediate sanding with paper 280 - 320.
b) 1 x top coat - 2- comp. acid hardening (SH) combination lacquer
(so called plastic lacquer).
Type of Lacquer: 2-comp urea resin lacquer approved according
to Swedish furniture facts.
- 100 GR/m2 to be applied.
- If buying from Chemcraft/Sadolin it's called Toplack Dansped
480-125. •
- Drying
- Intermediate sanding with paper 280 - 320.
c) 1 x top coat - 2- comp. acid hardening
- App. 80 G/m2 to be applied.
- Brand: See above (b).
d) Chemcraft/Sadolins Thinner:
For above mentioned lacquers - they are called - Thinner No. 121-802.
- 98- 2
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- 2--
d) Chemcraft/Sadolins Thinner (cont'd)
Use 10% thinner in the ground sealer as well as top lacquer.
e) Chemcraft/Sadolins Hardener:
For above mentioned lacquers they are called Hardener 999-017.
Use 5% for the ground sealer and 10% for the top lacquer.
f) The air pressure when spraying ground sealer and top lacquer
should be approx. 3 kg/cm2 . For stain the air pressure
should be 1-1 15 kg/cm2 .
g) All other surfaces (except table tops) should have one
coat of ground sealer and one coat of top lacquer. When 2 cteri.
staining, only—eee coat of top lacquer, no ground sealer.
( AM ii‘''‘ C ill 6 5 re i- Issi F 0 C
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-99-
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-100-
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• VERPACKUNGSANWEISUNG
MJUKT PAPPER MOT LACKERADE YTOR/ LACKIERTE FLÂCHEN MIT WEICHPAPIER SCHÛTZEN
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147 MALION POSTAL STATION MISSISSAUGA, ONTARIO PHONE 416-671-7200 MR MALCOLM CAMPELL
KRUGER INC 3285 BEDFORS ROAD
• IIONTREAL PHONE 514-731-1131 MR PETER FRYER
MACMILLAN BLOEDEL PACKAGING 1075 W GEORGIA ST. VANCOUVER BC PHONE 604-683-6711 P.T. COOK DIR PRODUCTION CONSOLIDATED . - BATH 4URS7, PACKING LID 2070 HADWEN RD. MISSISSAUGA, ONTARIO PHONE 416-823-6410 MR P.G MACKLEY, MGR ENGR SERV
MACMiLLAN AND CONSOLIDATED WILL MERGE SOON TO BECOME THE rIGGEET
-102-
•
I'D LIKE 10 VISIT A FEW DIFFERENT SOX MAKERS. PERHAPS IWO IN TORONTO DISTRICT AND DOMTAR AND ONE MORE WHERE YOU'RE SUYING IN VANCOUVER AREA. PERHAPS A U.S. FACTORY IN
».0e SEATTLE INSTEAD OF IN THE EAST' IM.E.ADDRESSES: (YET NO ONE IN U.S.)
A 1 ATLANTIC PACKAGING CO 111 PROGRESS AVE, SCARBOROUGH, ONTARIO PHONE 416-198-8101 MR J CHERRY, V.P. MFG
SECTION SIXTEEN
STAFFING REQUIREMENTS
16. STAFFING REQUIREMENTS
1. GENERAL
The intention of setting up this facility is primarily
centred around providing employment and training under
the St. Leonard's House scheme.
The staffing of this factory is going to be high compared
to private industry. The level of supervision is higher
to compensate for problems which cannot be accurately
forecast or measured in terms of lost productivity
capacity, inefficiency, etc.
The level of staffing and supervision has been selected
allowing for assumed turn over of participants in the
programme, non attendance, and lack of skills.
For this program to work effectively and to be of benefit
to the participants it must be operated as any other
factory.
The General Manager will be the sole authority at the
factory and will be directly responsible to the Executive
Director of the project.
Counselling of participants will be done in the Houses
and not at their place of work.
2. STAFFING
We envisage the operation personnel set up to be as
follows:
a. General Manager 1 person
b. General Supervisor 1 person
c. Finish/Assembly Supervisor 1 person
-103-
d. Machining Supervisor 1 person
e. Utility Group Leader 1 person
f. Machine Operators 12 people
g. Packaging 3 people
h. Material Handler 2 people
The above positions would be allocated to the followina
grade of personnel:
a. GENERAL MANAGER
Salary $35,000/yr.
Must be skilled in management principles and
have had experience in similar high pro-
duction facility.
b. GENERAL SUPERVISOR .
Salary $25,000/yr.
Skilled in all aspects of woodworking and
machinery. Would act as deputy to General
Manager.
c. FINISH/ASSEMBLY SUPERVISOR
Salary $20,000/yr.
Skilled in quality control and all aspects of
woodworking and machinery.
d. MACHINING SUPERVISOR
Salary $20,000/yr.
Skilled in material break out and all aspects
of woodworking and machinery.
e. UTILITY GROUP LEADER
Salary $5.00 - $6.00/hr.
This person will be selected by the General
Manager from the workers on the shop floor.
He will have shown genuine interest in his
work and have an attitude deserving respect of
the other workers and management, monitored
while working on the machines. This person
will be retained for the course of the project
providing his performance is consistent. He
will work alongside the supervisors and learn
all aspects of the operation. It is hoped that
this person will mature sufficiently in at-
titude and work skills to progress into a
supervisors position.
f. MACHINE OPERATORS
Salary $4.00 - $5.00/hr.
These positions will be referred by St. Leonard's
House, London.
They will be given instruction on all machines
and will work on a rotation basis on equip-
ment.
g. PACKAGING
Salary $4.00 - $4.50/hr.
These positions would be referred by St.
Leonard's House, London.
They would be low potential persons who are
capable of simple repetitive tasks.
-105-
h. MATERIAL HANDLER
Salary $4.00 - $4.50/hr.
These positions would be referred by St.
Leonard's House, London.
They would be younger, more active low potent-
ial persons responsible to the supervisors
for general duties around the factory.
3. WORK PERIOD
Provisionally we envisage participants of the program
tO work in the factory for a period of 6 months (1040
hrs.). It is expected that a natural turnover will occur
over this work period because of dismissal, re-entry
into prison or more suitable employment being made avail-
able.
4. INCENTIVE PROGRAM
Salaries will be based on an incremental principle whereby
workers entering the program will start on the mimimum
scale and as they progress and providing other objectives
and regulations are( met, increases would be made until
the maximum rate is achieved.
5. INITIAL TRAINING
A section of the factory would be made available for a
small workshop where entrants into the program will learn
basic skills on small power tools etc. On completion
of this initial training they would be put on the main
production line machines.
-106-
6. COMPLETION OF WORK PERIOD
A portion of the surplus operating funds would be set
aside for an employment counsellor who would decide
whether participants in the program could benefit from
additional training (college course admission) or
would assist in job placement. The cost of college
studies would similarily be expended from surplus funds.
7. HIRING SUPERVISORY PERSONNEL
Brennan & Pinnock Ltd. would assist St.'Leonard's
London in the hiring of personnel.
8. PERSONNEL WORK STRUCTURE
See following pages in this section for personnel
responsibilities and work structure.
,
É
RECEIVING
1 MATERIAL BREAK OUT AREA
MOULDING &
LAMINATING AREA
FINISHING AREA
PACKAGING
SHIPPING
MA
CH
I NIN
G S
UP
ER
VIS
OR
F
INIS
HIN
G
SU
PE
RV
ISO
R
& M
AT
ER
IAL
HA
ND
LE
R
& M
ATE
RIA
L H
AN
DL
ER
3 - MACHINE OPERATORS
5 - MACHINE OPERATORS
4 - MACHINE ,• OPERATORS
3 - LOW POTENTIAL • PERSONNEL
PERSONNEL RESPONSIBILITIES -108-
MATERIAL HANDLER
MACHINING SUPERVISOR
OPERATOR
cp
OPERATOR
01100111•1111
OPERATOR OPERATOR
OPERAOTR OPERATOR
FINISH/ASSEM- BLY
SUPERVISOR
GENERAL SUPERVISOR
MATERIAL HANDLER
PACKAGING' PACKAGING PACKAGING
GENERAL MANAGER
Immi OPERATOR
OPERATOR
imml OPERATOR
OPERATOR
[mini OPERATOR
OPERATOR
UTILITY GROUP LEADER
PERSONNEL WORK STRUCTURE
SECTION SEVENTEEN
FUNDING
17. FUNDING
1. GENERAL
Funding for this project is required under four main
headings which are as follows:
1. Purchase of major equipment/machinery
11. Setting up of factory
111. Start up capital
1V. Operating cost
Brennan & Pinnock Ltd. investigated sources of funding
for each phase of the project and we report below our
findings.
2. ST. LEONARD'S HOUSE, LONDON
The first course of action was to consider whether St.
Leonard's House, London could fund the whole project by
donations, fund raising or bank loan.
Obtaining funds from fund raising drives, donations, etc.,
would not, in our opinion, be viable.
An approach was made however to Toronto Dominion Bank,
main branch London and their response was very favourable.
We were hindered in our task by the confidentiality of
the project and for the bank to make any firm commitment
required full details of the project and participants.
Considering the risk factor of this project compared to
the return on investment on a strictly financial base
we could not recommend St. Leonard's House, London
providing the funding.
-110--
3. CORRECTIONAL SERVICES CANADA
Correctional Service Canada are not required to release
funds for the purchase of capital equipment.
We would however, look to Correctional Service Canada
for assistance in the areas of setting up of the factory
and the start up capital.
4. GOVERNMENT AGENCIES
Brennan & Pinnock Ltd. identified three possible sources
of funding from government agencies and they are as
follows:
1. "Skills Growth Fund"
This program is controlled by Employment and
Immigration Canada.
We quote extracts from the Skills Growth Fund
policy requirements on the following pages in
this section of this study.
Contact has been established with Employment and
Immigration Canada at:
Ontario Regional Office Training Programmes Branch 4900 Yonge Street Willowdale North York, Ontario M2N 6A8
Mr. Dale M.L. DuQuesnay Employment Training Consultant Telephone No. 416-224-4724
Brennan & Pinnock Ltd. met with Mr. Duquesnay and outlined
the project.
A preliminary application was made on 7th November 1983
to Employment and Immigration Canada under the Skills
-111-
Growth Fund for this project.
The application however could not meet their banking
date of 15th November 1983.
The next banking date under this particular fund is on
15th February 1984.
Should this project proceed we would appreciate any
government departmental assistance in establishing
prior to 15th February 1984 date the suitability of this
project and acceptance to the funds applied for under
the Skills Growth Fund.
SKILLS GROWTH FUND (SGF) Project Proposals for SGF funding from non-profit organizations
General
Non-profit organizations established to give courses may
receive financial assistance:
a. for the purchase, erection or conversion of buildings,
machinery, equipment or other facilities for use in:
- training for occupations of national importance, as so designated by the Canada Employment and Immigration Commission (CEIC), where the objective is modernization, adaptation or expansion of train-ing capacity for these occupations, or
- training for any occupation suitable for adults needin• s•ecial trainin• to overcome s•ecific employment barriers,
b. for the initial operation of the facilities referred to in paragraph (a) if the training is not purchased by the Commission, and
c. for the development of courses to be given in conn-ection with the facilities referred to in paragraph (a), if such courses do not already exist.
A non-profit organization set up to ,give courses - or a
-112-
group of persons considering the establishment of such
organization - wishing to seek financial assistance from
the Skills Growth Fund (SGF) must consider several points
and take a number of steps.
Points to be considered
1. Non-profit organizations established to give courses
must be properly incorporated under applicable federal
or provincial law before they can enter into a finan-
cial assistance agreement with CEIC. Groups considering
the establishment of such a non-profit organization may
wish to ascertain that their project proposal is likely
to be accepted before proceeding with incorporation.
Groups or Torganizations contemplating the development of
a project proposal should carefully consider the conformity
of the project objective with either one or the other
of two objectives indicated in paragraph (a) of the
previous section.
2. There will be situations where not all costs will
be reimbursed from the SGF and/or not all costs will
be covered by advances. The ability to provide re-
quired funding from other sources should be estab-
lished early.
3. "Skills Growth .B‘und Application" forms and a
"Guide to Applicants" are available from the Commission's
Regional Offices. These should be studied carefully
before proceeding with an application. Advice and
guidance is available from the Regional Offices. -
-113-
4. All project proposals are reviewed and assessed at
the provincial level by a joint CEIC/provincial com-
mittee.
Steps to be taken
1. Identify and articulate clearly the training need to
be met. This should include, if at all possible, a
quantitative analysis and should relate it to an an-
alysis of availability and suitability of present
, training.
2. Formulate the training objective and establish its
conformity with the SGF objective.
3. Develop preliminary detaisl regarding training pro-
gram, facilities, equipment, course materials, etc. and
discuss with the designated training officer at the
Commission's Regional Office, as well as with the ap-
propriate provincial official(s) to obtain an initial
reaction.
4. Once concurrence in principle with the project pro-
posal on the part of CEIC and the province has been es-
tablished, develop the proposal further to provide the
degree and kind of detail requested in the "Guide to
Applicants". (It might be helpful to obtain assistance on
training technical aspects from appropriate provincial
personnel.)
5. Start proceedings toward incorporation of non-profit
organization if not already incorporated.
6. Submit project proposal to designated officer at the
CEIC Regional Office.
-114-
7. Arrange for start-up funding if required and not
already done.
8. Provide supplementary information to the designated
CEIC officer if requested.
9. Upon approval of the project proposal, enter into an
agreement for financial assistance and proceed with the
project.
SKILLS GROWTH FUND (SGF) GUIDE TO APPLICANTS
Date: September 9, 1982
1.2 Objective
The national Skills Growth Fund (SGF) has been
established in order to bring , about a more rapid
increase in the training capacity for these key
skills. The Fund's primary purpose is to make
funds available for the establishment, conversion,
and/or expansion of facilities to provide training
in occupations of national importance, that is,
occupations which have been identified and desig-
nated as experiencing either national widespread and
persistent shortages, or regional or industrial
shortages so considerable as to constitutea
national problem.
An ancillary objective is to encourage the estab-lishment of occupational training centres by and for target groups whose members need specially adapted training to overcome employment barriers particular to those groups.
-115-
1.3 Means
"The Fund will finance the cost of required expan-
sion in facilities for the training of technol-
ogists, technicians and tradesmen in designated
national occupations, or-for people with special
training needs. The federal government will pay the
capital costs and, in lengthy courses - ones in
which the Commission cannot purchase places - it
will also contribute to initial operating costs, as
. well as costs of necessary course development".
1.4 Restrictions
"Regarding training involving target groups, this
must relate to viable employment opportunities,
whether or not in designated occupations".
2. Financial Assistance
SGF will provide captial funding and, under certain
circumstances, contribute to initial operating and
course development costs.
2.1 Capital funding
Capital funding is available for all approved pro-
jects at the trades and technology level up to a
maximum of $40,000 per trainee/place. A project
may include space for classrooms, laboratories and/
or workshops, as well as equipment and machinery.
It may be in the nature of new construction, con-
version, or expansion of existing facilities, as
well as the purchase of such facilities.
-116-
3; Eligible Organizations
Either public bodies or private non-profit organ-
izations will be owning and operating the to be
established, expanded or converted training fac-
ilities potentially eligible for assistance from
SGF.
3.2 Private non-profit organizatiions
These organizations will have been incorporated under
appropriate provincial legislation specifically for
the purpose of providing training because the
principals have:
- either a direct and pressing interest in the output of the training effort (workers in oc-cupations of national importance),
- or they are directly interested in the special needs of the prospective trainees (handicapped Natives, etc.).
The following conditions regarding the structure
of non-profit organizations - as, where appropriate,
included in their bylaws
- will significantly contribute to the success of
the training: in the case of training facilities
for target groups, ideally,
- some of the directors should be members of the target group to be served,
- at least one director should represent the labour market for which the institution prepares it students (either from the employers and/or relevant unions).
4. Eligible Training Institutions
Training institutions eligible for assistance under
SGF may be either publicly or privately owned and
-117-
and operated. However, in the latter case, they
must be incorporated as non-profit organizations.
Private profit seeking training enterprises are not
eligible for financial assistance under SGF.
4.2 Privately operated training facilities
These facilities generally focus either on the skill
needs of a particular industrial sector or group
of employers, or on the needs of a certain target
group.
Examples of the second type would be a centre set
up to train blind people in certain computer - re-
lated skills, or a facility erected in a remote area
to teach Native people in that area certain skills
related to emerging employment opportunities.
-118-
L. DuQuesnar lent Training Consu tai
- Dale M.L. DuQuesna5r; Employment Training Consurtant Training Technical Services Ontario Region
+ Employment and Emploi et Immigration Canada Immigration Canada - Your !,le Votre reference
Our file NoneréférerIce
7587-3-06-0258-C
4900 Yonge Street Suite 700 North York, Ontario M2N 6A8
8 November 1983
Mr. J. Wilbee Executive Director St. Leonard's House London 430 William Street London, Ontario
Dear Mr. Wilbee:
We acknowledge receipt of your application for funding under the Skills Growth Fund program.
Your application is being reviewed and if further information is required we will be in touch with
Thank you for your interest in the Skills Growth Fond.
Yours sincerely,
cc: Neil Brennan
Canard -119--
I er
•1
4. GOVERNMENT AGENCIES - continued
11. "Federal Business Development Bank"
Brennan & Pinnock Ltd. met with officials of the
Federal Business Development Bank in London, Ontario.
Funding could be made available from this source but
it would entail the setting up of a profit making
business charter by St. Leonard's House, London to
operate the factory. St. Leonard's House, London
being a non-profit organization require that the new
charter for the factory be on a non-profit basis.
111."Canada Manpower Industrial Training Program"
Where training is appropriate the Canada Manpower
Industrial Training Program (CMITP) offers finan-
cial assistance to the employer to start "in-house"
training or expand existing training capability.
This assistance accounts for the following contri-
butions to the employer:
a. 50% wages reimbursed per trained employee in traditional employment for 1040 hour training period.
b. 75% wages reimbursed for non traditional employment on same basis.
c. 85% wages reimbursed for special needs em-ployment on same basis.
Maximum contribution per employee is $250.week.
Included in a, b, & c is 240 hour training allowance
of $3 max/hour.
1_11
es -120-
5. LEASE PURCHASE
In the event of funds not being made available for the
purchase of the machinery/equipment we pursued the
option of the lease purchasing the equipment over the
five year period.
A copy of letter from Misener Financial Corporation is
included in this study on the following pages.
The total cost over the five year period based on equip-
ment cost of $430,000 is $678,454.
With an annual rental of $114,190.80 the factory would
undoubtably run at a loss.
6. SUMMARY
The recommended strategy for funding on this project
is itemized below:
1. Purchase of equipment
Cost: $450,000 maximum (Grant)
Source: Skills Growth Fund
11. Setting up of factory
Cost: $250,000 maximum (Grant)
Source: Correctional Service Canada
111. Start up capital
Cost: $250,000 maximum (loan)
Source: Correctional Service Canada
Money to be repaid to Correctional Service
Canada over a 5 year period.
1V. Operating Cost
To be compensated by contributions payable under
the Canada Manpower Industrial Training Program.
We would reiterate that the above costs have been as-
sessed and calculated with the information known at the
time of preparing this study.
Propety layouts and state of repair would affect costs
of mechanical and electrical services requirements, re-
furbishment needs and final selection of equipment.
Costs are based on some reconditioned equipment which are
available now but such equipment may have to be purchased
in new condition, depending on availabilfty at time of
purchase.
For the above mentioned reasons the costs given under
6.1. - 1V. have been inflated and are maximum expected.
Further to our telephone conversation of October 20, 1983, we would like to confirm our lease quote for approximately four hundred and thirty thousand dollars ($430,000.00) on wood working equipment.
Our quote was as follows:
Term: 60 months, 12 month stretch Purchase Option: 25°6 of original cost at 60 months Cost per thousand: 22.13 monthly renta17: based on 430,000.00; $9,515.90
All quotes are valid for 30 days.
I trust this is satisfactory to you, however, should you have any questions, please do not hesitate to contact the undersigned.
Yours truly,
MISENER FINANCIALCOPPORATION
Valerie Hope Customer Marketing
VH:rs
SECTION EIGHTEEN
COSTING
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18. COSTING
1. GENERAL
Estimates have been based on October 1st, 1983 prices.
An allowance has been made for an increase in cost of
goods and other expenditures of 5% for 1984 prices.
Estimates given are to be considered as budget fore-
casts amd may vary + or - 10% on certain items.
2. PLANT PRODUCTION
We have calculated production costs for this study
based upon the following information:
a. Employees
1 - General Manager
1 - General Supervisor
1 - Finish/Assembly Supervisor
1 - Machining/Break Out Supervisor
1 - Utility Group Leader
12 - Machine Operators
3 - Packagers
2 - Material Handlers
22 - Total number of employees
See Section 16 of this study for job descriptions of
employees.
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2. b. Annual Salary/Wage Expenditure
Non-productive salaries
1 - General Manager $ 35,000.00
1 - General Supervisor $ 25,000.00
2 - Supervisors $ 40,000.00
1 - Secretary/Bookkeeper $ 15,000.00
Sub Total $115,000.00
+ 5% increase for 1984 $ 5,750.00
TOTAL $120,750.00
Productive Wages
1 - Utility Group Leader @$5.50x2080hrs. $ 11,440.00
NEIL BRENNAN MARKETING LTD. 68 Byron Ave., E, London, Ontario. N6C 1C7
Dear Sir:
We wish to thank you for the courtesies extended to our Sales Representative, Mr. Lou Flanagan during his recent visit to your office. Further to your conversation, we are pleased to submit the following written quotation on the items of interest.
Duo-Fast Model AWC 5012 Air Tacker Outright Selling Price -
The above mentioned prices are quoted net thirty (30) days, F.O.B. Toronto, Ontario. Federal and Provincial sales taxes extra, if applicable with delivery available from stock. This quotation will be held firm for thirty (30) days. I understand business will be starting using these staples around May 1, 1984 and should any increases take place on the above products before that time, we will re-issue a new quotation toward the end of April.
We trust you find our prices competitive and look forward to servicing your future requirements.
Yours very truly, SIGNO6E FASTENERS INC.
rs.) Shirley Butcher /Supervisor-Inside Sales
STAPLING & NAILING PRODUCTS ....
120,750.00 750.00
1,500.00 3,000.00
500.00 3,500.00
24,812.00 5,000.00 4,000.00
3,000.00
176,358.00
5,000.00
88,180.00
$633,600.00
4. SUMMARY
Production cost based on first year of operation and
initial order of 30,000 chairs.
1. Cost of goods $226,205.00
2. Leasing cost of property includes utilties and taxes @$3.75/ft
The purpose of this letter is to formalize our discussion today concerning the audit of non-profit organizations funded by government financing and their relative cost.
Based upon the outline you provided of the proposed organization, whidh I hold in complete confidence, and my experience in this area, I estimate the cost of preparation of an audited financial statement between $5,000 and $7,500. This estimate is based upon the assumption that the organization would keep proper books and records and provide assistance at year-end in the preparation of schedules and analyses.
It has been my experience that these types of organizations frequently require additional assistance in the preparation of submissions to regulating bodies. If substantial time was required of the auditor a fee would be dharged in addition to the audit fee.
I trust this information will be useful to you.
Yours truly
B. tJ. McIlhargey B. e. McIlhargey
5. CONCLUSIONS
The summary indicates a surplus of funds after the first
year of operation:
Selling price to IKEA Limited $698,075.00
Production cost $633,600.00
Surplus $ 64,475.00
This represents 10.1% surplus over operating cost.
Items not taken into consideration in the summary sheet
are:
1. Leasing of machinery if funds are not made available for purchase under Skills Growth Fund.
2. Repayment contribution to Correctional Services Canada loan of start up capital.
,3. Tooling costs for equipment which will be an annual expenditure.
4. Contingency for unforeseen "teething" problems with equipment and/or personnel.
We would recommend therefore that for the first year of
operation the following cut backs in personnel be made:
No general supervisor or utility group leader
Reduce machine operators from 12 to 10
Reduce packagers from 3 to 2
The factory should still be able to maintain the production
quota of 30,000 chairs in the first year.
Thesfollowing page is a revised summary of cost based on
reduced labour force.
112,500.00
94,500.00 750.00
1,500.00 3,000.00
500.00 3,500.00
21,272.00 5,000.00 4,000.00 3,000.00
135,408.00
REVISED SUMMARY
Production cost based on first year of operation with
reduced personnel and initial order of 30,000 chairs.
$226,205.00 1. Cost of goods
2. Leasing cost of property incldes utilities and taxes @$3.75/ft for 30,000ft2 property
5. Mechanical breakdowns, service contract ( 1 year warranty on all equipment)
6. Marketing commission to Brennan & Pinnock Ltd. (based on 5% selling price to IKEA
$698,075)
5,000.00
34,905.00
7. Sub total
8. Less Canada Manpower Industrial Training Program Contribution
$651,040.00
67,704.00
Revised production cost for 1984 $583,336.00
CONCLUSIONS
From the revised summary the surplus of funds after the
first •year of operation:
Selling price to IKEA Limited $698,075.00
Production cost $583,336.00
Surplus $114,739.00
The revised surplus will accommodate a good contin-
gency for the unforeseen expenditures. Disregarding
the contribution under the C.M.I.T.P. the surplus of
funds after the first year is 8%.
From our discussions with IKEA Limited they would
want to phase in the supply of chairs from this factory
in progressive quantities and in direct relation with
the phasing out of their import source.
• This measure by IKEA Limited will assist the factory
management and employees by "cushioning" the build up
of production quantities, quality and methods control.
Subsequent production years will show an increasing
surplus.
See recommendations Section 20 in this study for further
comments.
SECTION NINETEEN
SUPPORT TO PROJECT
19. SUPPORT TO PROJECT
Included as part of this study are letters of support
from The London Labour Council, The London Area Citizens
Advisory Committee to Correctional Services of Canada,
and The National Parole Board (Ontario Region).
NATIONAL HEADQUARTERS, CORRECTIONAL SERVICES OF CANADA
Messrs. Brennan, Pinnock and Wilbee met with Deputy
Commissioner G, Pinder and others from C.S.0 NHQ and
presented this idea for an employment project. Strong
support was received to continue the Feasibility Study
on such a program, including the awarding of a contract
for $17,500 to Brennan & Pinnock to complete such a
study. Other contacts with other NHQ personnel have
taken place during the study.
ONTARIO REGIONAL HEADQUARTERS, CORRECTIONAL SERVICES OF
CANADA
We met with Mr. Dennis Kerr, Regional Chief, Program
Design and Resource Development, and Mr. Mike Elkins,
Regional Manager Industries. Although there were some
concerns expressed, we were encouraged by them to con-
tinue on with the endeavour. Mr. Don Clark, Regional
Executive Officer was briefed by Mr. Gilles Martin,
District Director, of the project and our intent.
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DISTRICT CORRECTIONAL SERVICES CANADA
Mr. Gilles Martin, District Director, if fully aware of
the project, was involved in a number of meetings to
discuss the project, and is quite supportive of the idea.
AREA CORRECTIONAL SERVICES CANADA
Mr. Pat Wood, Area Manager, is very supportive of the idea
and one of the contributors to this report.
NATIONAL PAROLE BOARD - ONTARIO REGION
We briefed Mr. A. Beaupre on the project and received his
support. We further informed Carol Sparling, Regional
Manager, Case Supervision, of our intent, receiving
support.
MINISTRY OF CORRECTIONAL SERVICES - PROVINCE OF ONTARIO
We met with Mr. Donald Evans, Executive Director Community
Programs, and Mr. Arthur S. Nuttall, Community Resource
Centre Development. Both of these gentlemen told us that,
judging from our presentation, it was a viable idea. Mr.
Evans stated that he would start the process for discus-
sion within his ministry. Of course no commitment at
this point could be given.
COMMUNITY
We met with Mr. Jack Burghardt, MP for London (Liberal)
and outlined the project. Mr. Burghardt indicated that it
seemed like a worthwhile project and one he could support.
He asked for further information after this report was
presented.
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The Citizens Advisory Committee, after a long meeting and
some very pointed questions that were answered to their
satisfaction, gave us their support.
The London Labour Council have endorsed this endeavour
with the president of the council indicating to us that
he personally has some ideas he wishes to share with us.
Not the least of community support, is the Volunteer
Board of Directors of St. Leonard's House, London. With
St. Leonard's being the most vulnerable, with the most to
lose if this venture was not successful, they looked at
the various aspects with some concern and have given their
Executive Director the mandate to proceed towards its
fruition.
Other members of the community, primarily with experience
in woodworking, have indicated that they would be willing
to sit on an advisory board to this enterprise.
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SECTION TWENTY
RECOMMENDATIONS
20. RECOMMENDATIONS
The findings of this study indicate that the proposal to
fund and operate a woodworking facility, producing wood
chairs for IKEA Limited, is a viable proposition.
During the course of this study we have given this program
considerable thought as to the viability and feasibility
of Correctional Services ex-offenders operating in such a
facility.
It is our opinion, based upon the facts as we see them,
that a firm commitment be made to proceed with this project.
However, we must emphasize that this facility be operated
in an efficient and business like manner in order to meet
production and quality standards set by IKEA Limited which
is critical.
The additional benefits derived from this approach will be
to generate further orders, and will train employees in
lifeskills and in sound working practices in tune with the
private sector.
We envisage this facility being used as a working model for
similar opportunities in other areas of Ontario and Canada
where St. Leonard'a House, London and Correctional Services
have a vested interest.
We suggest that the maximum personnel required to operate
this facility is 22-24 persons. Production figures and
costs for this study have been based on 18 production and
4 non-production personnel.
A short term solution would be to lease an existing
property in the London, Ontario area. If St. Leonard's
House, London and Correctional Services envisage a long
term commitment, giving more extensive training facilities
it would be advantageous to consider the purchase of land
and funding for a new building.
Machinery selections need to be finalized with IKEA Ltd.,
Vancouver. The cost for used machines has been used in
this study. Our preliminary findings suggest however,
that the correct course of action is to acquire a balance
of new and used machines from a source here in Canada.
To enable this proposal to be effectively implemented
a decision by the Executive Committee has to be made at
the earliest possible time. IKEA Limited are undoubtedly
anxiously seeking suppliers in Canada to produce this chair
product line and to prolong this decision would, in our
opinion, jeopardize this opportunity for St. Leonard's
House, London and Correctional Services, Canada.
From our meeting with IKEA Limited we were told that this
proposal is in competition with two other suppliers for the
wood chair products.
Primarily our concern is centred on the aquirement of the
property. We have been told by our realtor agents John
Thiel Ltd., London that an offer to lease has been made on
the Huron/Clarke factory, which is our prime selection,
but they will endeavour to hold off the signing of any
contract until a decision can be made on this project.
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An important consideration in any decision on this project
is to establish what commitment is being made by IKEA
Limited.
Without government funding we cannot see private industry
"biting at the bit" to secure this order when their inves-
ment could be banked and show the same return at considerably
less risk.
At the time of our meeting with IKEA Limited we endeavoured
to establish their role and commitment on this project and
we itemize below our findings:
1. IKEA Limited will assist in all areas of the design of the factory and selection of equipment.
2. IKEA Limited representatives will be present at the start up of production to train the supervisors in the operation of machines and establish quality control measures.
3. IKEA Limited will visit the factory every six weeks to ensure the operation is running efficiently and to discuss any problems regarding production or quality of products.
4. The existing import source for the chairs will be phased out progressively. When the factory is up to full production they will terminate supplies from their European sources. For IKEA Limited to regain its import source would mean a six months mobilization period before supplies could be imported again in any sufficient quantity.
5. IKEA Limited have had experience with factories in Sweden operated by their correctional service. They realize and appreciate the real problems which exist with this type of operation.
Information is being sought by Correctional Serivces Canada, London with their counterparts in Sweden as to their experience.and comments on such operations.
We had hoped to include this information in this bound study but an addendum will be issued to all concerned, prior to the presentation in Ottawa.
6. IKEA Limited expressed interest in other products being manufactured by similarly run factories should this project be adopted and operated efficiently.
7. Brennan & Pinnock Ltd. raised the question of supplying samples of products prior to the factory being in operation.
We regard their original request as unreasonable be-cause the samples, which would have to be made by hand, would not be a fair and accurate representation of the factory produced item.
IKEA Limited conceded on this issue and will reconsider their original request.
8. One major concern of Brennan & Pinnock Ltd. was the supply of lumber for the chairs.
IKEA Limited require that lodgepole pine be used for the pine chairs because the wood is similar in structure and appearance to the European source of lumber.
Lodgepole pine however, is only available from British Columbia, Canada.
The specification for lodgepole pine is as follows:
Lodgepole Pine Pinus Contorta (Dougl)
Also known as Shore Pine
Found in interior B.C. & western Alberta, South Yukon & Southwestern NE Territories
Tree - tall, straight, grows to height of 30 M & 60 cm. diameter
Wood - light in colour, sap white & heartwood light yellow soft and straight grained & uniform texture
Weight - light 465 Kg/M3 (29 lb/ft 3 ) air dry
Strength - medium
Processing - seasons well, takes good finish & holds paint
Uses - construction lumber
Brennan & Pinnock Ltd. set about finding a comparable wood
grown in the eastern regions of Canada.
Jack pine would appear to be the nearest in finish and
quality to lodgepole pine.
The specification for Jack Pine is as follows:
Jack Pine Pinus Banksiana (Lamb)
Also known as Princess, Gray, Bansian Pine
Found from Nova Scotia to Northern Alberta
Tree - grows to height of 12-21 M & 20-30 cm diameter
Wood - heartwood light brown, sap white & uneven texture