Profiting the Crown

Profiting the Crown: Canada's Polymer Corporation, 1942-1990

Copyright Date: 2005
Pages: 328
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  • Book Info
    Profiting the Crown
    Book Description:

    Profiting the Crown traces the rise and evolution of Polymer Corporation until its sale in 1990 to the German chemical giant A.G. Bayer. Crown corporations are widely regarded as a Canadian invention, but the failures of many state-run enterprises in the twentieth century have led to the widely held position that government has no place in the boardrooms of the nation. Matthew Bellamy shows how Polymer was both a successful tool of public policy and a profitable economic enterprise, bringing to light the accomplishments of one of Canada's pioneering crown corporations.

    eISBN: 978-0-7735-7238-6
    Subjects: Business

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. List of Illustrations
    (pp. ix-x)
  4. Preface
    (pp. xi-xiv)
  5. Introduction
    (pp. xv-2)

    In an article entitled “O Canada, Our Land of Crown Corporations,” published in 1929, historian Frank Underhill argued that what made us distinctly Canadian was not our geography or our political culture or even the fact that we were made up primarily of two linguistic peoples.¹ Rather, according to Underhill, our national identity lay in how we handled the economic question. Unlike in the United States – a land that Underhill maintained was defined by an unrelieved capitalistic individualism – in Canada the body politic embraced state-run enterprise and accepted the virtues of the public ownership and operation of various...

  6. 1 Poor by Nature: Rubber, Industry, and the Seeds of Polymer Science to 1939
    (pp. 3-22)

    On an unusually warm autumn morning in 1770, the English natural philosopher Joseph Priestly sat hunched over his desk in the cluttered study of his cottage in Leeds. He was engaged in writingThe Theory and Practice of Perspective.The task was proving to be difficult. His philosophical prose, laboriously pencilled out in longhand, did not flow effortlessly. Phrases often eluded perfection. Corrections were thus numerous and onerous. Remarkably, however, Priestly’s manuscript did not exhibit the usual marks of endless corrections. Somewhere he had obtained a bit of an odd, dense, black doughy substance that had been brought as a...

  7. 2 “Almost a Miracle”: The Birth of the Canadian Synthetic Rubber Industry – from Experimental Dream to Industrial Reality, 1942—1945
    (pp. 23-56)

    On 7 December 1941, in a coordinated strike without equal in the annals of war, the Japanese almost simultaneously wrought havoc on units of the United States Pacific Fleet in a surprise attack on Pearl Harbor, invaded the Philippines and Hong Kong, assumed control of Saigon and the rest of French Indo-China, accepted the capitulation of the Siamese government under Marshal Pibul Songgram, started preparations for the invasion of Burma, landed invading forces at two points in southern Siam and at Kota Bharu on the northeast coast of Malaya, and bombed Singapore, all in one day. Other units headed for...

  8. 3 For the Country at War and the Country at Peace, 1945—1951
    (pp. 57-86)

    The war proved to be an expensive time to build a synthetic-rubber plant. By most estimates, the $50-million price tag would likely have been half that during peacetime. Yet wartime expediency carried the day, and at war’s end few questioned the government’s decision to build when it did. Canadians of all political persuasions took pride in the pace and high calibre of the construction effort at Sarnia – a job that C.D. Howe heralded as the “most complex … ever attempted in this country.”² One trade journalist of the time commented that “the building of the plant is remarkable not...

  9. 4 The Prosperous Years, 1951—1957: Chemistry, Consumers, and the Great God — Car
    (pp. 87-118)

    By most measures, the period 1951—57 was a prosperous time for Canadians. Total industrial output went up by half and productivity soared, thanks to technological innovation like the innovation taking place at Polymer Corporation. C.D. Howe’s incentives to business, together with the hospitable monetary and fiscal environment created by his colleagues in the finance portfolio, led to unprecedented levels of investment. The fact that much of the investment capital was American in origin did not concern Howe as it did others at the time and since.¹ Howe firmly believed that profit-motivated behaviour was not affected by nationality, and he...

  10. 5 Worldly Wise: Growth and Multinationalization, 1958—1966
    (pp. 119-146)

    The 1950s and 1960s witnessed the perfection of the “multinational enterprise” as expansion abroad became the strategy of growth for an increasing number of leading industrial organizations.² In many ways, the mne became the epitome of postwar economic dynamism – flexible, efficient, and, as its critics would soon point out, imperialistic.³ The mne was not new, of course. Since the second industrial revolution in the late nineteenth century, many firms – with competitive advantages derived from economies of scale and scope – had established production facilities in foreign markets. Even Canadian capitalism, long a recipient of foreign economic attention, had...

  11. 6 Decade of Discord: Diversification and Denationalization, 1967—1977
    (pp. 147-182)

    The late 1960s and the 1970s witnessed the rapid adoption of diversification as a strategy for corporate growth.² Mature firms around the industrialized world strategically expanded into both related and unrelated industries in an attempt to sustain their growth and development.³ This became the age of the protean multinational corporation, an enterprise dedicated to internationalization and the pursuit of synergies – a seemingly magical mixture of business activities that were stronger and more profitable together than they were apart. As Alfred Chandler has noted, in the 1960s and 1970s the drive for growth through diversification “had almost become a mania.”⁴...

  12. 7 Back to Basics, 1978—1990
    (pp. 183-212)

    After the diversification mania of the 1960s and 1970s came a wave of divesting in the late 1970s and 1980s, as firms got “back to basics.” Polymer was among these firms. During the diversification drive, many companies had diversified beyond what was optimal for them. Some firms, like Polymer, expanded into unrelated areas of production without the requisite capital and organizational capabilities, and as a result, their profitability and market value suffered. Worse still, from a long-term perspective these firms lost sight of what they did best. In Polymer’s case, the company moved away from developing new and improved polymeric...

  13. Conclusion: Poor by Nature, Rich by Policy — State Intervention and Polymer Corporation
    (pp. 213-222)

    Twenty years ago, as the neoconservative revolution began to make its hesitant appearance in Canada, in an article entitled “ ‘Rich by Nature, Poor by Policy’: The State and Economic Life in Canada,” business historian Michael Bliss contentiously argued that government action had made Canadians poorer than nature had originally intended.¹ Through the application of protective tariffs, direct financial succour, and the creation of Crown corporations, the state had retarded the development of an otherwise well-endowed nation. State activism, Bliss vigorously maintained, had thus compromised, not bettered,Canada’s productivity, efficiency, and standard of living. If Canada could just give up its...

  14. APPENDIX ONE Financial Statistics for Polymer Corporation
    (pp. 225-228)
  15. APPENDIX TWO Polymer’s Senior Personnel
    (pp. 229-236)
  16. Glossary of Technical Terms
    (pp. 237-238)
  17. Notes
    (pp. 239-274)
  18. Bibliography
    (pp. 275-294)
  19. Index
    (pp. 295-303)