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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

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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-

cussion of our findings and conclusions.

t i i

. . the impossible furnishing store from Sweden

September 26, 1983

LETTER OF INTENT

Neil Brennan Marketing Ltd., 68 Byron Ave. East, London, Ontario N6C 1C7

Attention: Neil Brennan

Dear Sir:

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.

11. Material specifications

111. Preference on material source

1V. Specification for finishes

5. Production:

1. Confirmation of start up date

11. Schedule of production requirements

111. Quality control

1V. IKEA standards

6. Delivery:

1. Packaging requirements

11. Delivery destination/s

-4-

68 BYRON AVENUE EAST. LONDON, ONTARIO, CANADA N6C 1C7 (519) 672 - 3557

7. Submissions by Neil Brenrian Marketing Ltd.

1. Government of Canada

11. IKEA

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-

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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.

W46 cm, 1180 cm.QA. Natural or nutbrown $62.

MOI/ERN chair emobeltairla Solid innt• W1111 .1

natural Imish, tear lacquered. Polyether 1041111 .

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

SWEDEN

1958 1965 1966 1967/77 1972 1973 1977 1981

1982

2 13.000M2 43.000M2 15.800M2 22.200M2 24.700M2 12.700M2 16.100M2

650M2 6.000M2 1.250M2

600M2 2.000M

SWITZERLAND

2 Spreitenbach (Zurich) 15.500M2 Aubonne (lausanne) 17.500M

1973/79 1979

Bobigny (Paris) Lyon Evry

FRANCE

1981. 1982 1983

2 4.800M2 4.300M2 21.300M

2 21.000M 2 8.000M

16.000M2

2 10.000M2 8.000M2

10.000M

2 11.000M2 15.400M2 20.000M2 10.500M2 11.000M2 12.400M2 20.600M2 14.000M2 1.300M2 13.500M2 14.000M2 7.200M

19.500M2

2 4.500M2 4.500M2 19.000M

AUSTRIA

1977/81 Wien 1981 Wels

NORWAY

1963/75 Slependen(Oslo)

HOLLAND

Sliedrecht(Rotterdam) Amsterdam Duiven

WEST GERMANY

1974 Eching(Munchen) 1975/78 Godorf(Koln) 1975 Dorsten 1976 Grossburgwedel(Hannover)

Stuhr(Bremen) 1977 Kalcenkirchen(Hamburg)

Wallau(Frankfurt) 1978 Kamen(Dortmund)

Stuttgart 1979 Berlin

Kaarst(Dusseldorf) 1980 Kassel 1981 Poppenreuth(Furth/Nurn-

berg) Schwalbach-Bous -

Saarbrucken) Freiburg Walldorf

1979 1982 1983

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

Mortgage payable, long—term portion (Note 7) 810,000

Ill Shareholder's equity: Share capital (Note 9)

Retained earnings, per accompanying statement

Total shareholder's equity

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:

Purchase price Interest Property taxes Consulting fees

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

Consulting fee Credit card commissions Donations Equipment lease Heating and electricity

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

(Wood only) wooden furniture - 1980 approx. $ 490m

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

and agency clients):

Month Day Parole Full Parole Mandatory Total

Oct. 83 ' 3 7 4 14 Sept. 83 7 5 1 13 Aug. 83 3 3 1 7 July 83 5 3 3 11 June 83 1 3 7 11 May 83 4 8 10 22 April 83 3 3 3 9 March 83 1 9 3 13 Feb. 83 2 1 5 8 Jan. 83 5 8 3 16 Dec. 82 8 6 3 17 Nov. 82 4 3 5 12 Oct. 82 7 2 8 17

d. Average caseloads (including volunteer and agency clients) for the past year:

Month Day Parole Full Parole Mandatory Total

• Oct. 83 18 69 21 108 Sept. 83 19 67 21 107 Aug. 83 15 63 24 102 July 83 15 62 27 104 June 83 14 61 31 106 May 83 13 61 29 103 April 83 14 60 23 97 March 83 16 61 24 101 Feb. 83 23 56 26 105 Jan. 83 22 58 26 106 Dec. 82 24 54 25 103 Nov. 82 21 50 30 101 Oct. 82 19 47 31 97

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 .

Yours truly,

R. (Bob) Sexsmith, President

RS/bb opeiu343

-65- LONDON, ONTARIO N5W 5L2 Telephone 453-03i0 450 hiç.;h'c.Jry

J. Robinson hairman

Res: 616 Ridgewood Cres. London, Ontario N6J 3J3

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

Residential Centres, section 14-22, Minimum Organizat-

ional Standards For Contract, item #5 Employment/

-67-

Vocational Training reads:

"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

Attention: Mr. Neil Brennan

Dear Mr. Brennan:

RE: Proposed 32,000 Square Feet Furniture Manufacturing Facility

We take pleasure in presenting you with the fol lowing quotation for the above noted project.

Items Included: 1. Shell of the building will be erected as per the plans Al

through A5 included with this proposal 2. The entire area will be sprinklered and designed in accordance

with NFPA 13 for extra hazard Group 2. 3. Electrical: a 600 amp service will be Provided 4. Lighting to the warehouse area will be by mercury vapour

fixtures placed at approximately 25' on centres in both directions

5. Some internal demizing partitions have been included to delineate areas that will be used for flammable storage and the wood working area.

6. Four fire doors have been allowed for as a pass-through between separated areas

7. Heating in warehouse area will be accomplished by hot water

heating system 8. Ventilation and make-up air in paint spraying area will be

provided. 9. Office area: an 8" concrete block wall will be provided as

a demizing wall between the office area and the plant area.

10. The fol lowing offices will be provided: 50 x 20 1 showroom;

3-10' x 15' offices; 1 male and 1 female washroom in office

area; plant washrooms to accommodate 15 personnel; shipping

and receiving area including offices for a supervisor.

11. Office area heating and airconditioning to be provided by roof-mounted units.

12. All interior walls in office area to be metal stud and drywall

painted. 13. Ali ceilings in office area to be 2' x 4' lay-in acoustic tile

14. This building has been designed so that it may be split into multiple occupancy units at a later date.

The Consortium Group Limited -73-

526 Newbold Street • London, Ontario • N6E 1K6 • (519) 681-2282 681-2530

Neil Brennan Marketing Limited October 5, 1983 Page 2

Items Not Included: 1. Additional requirements as deemed necessary by the Building

Inspection Division of the City of London, Department of

Labour, NFPA or other insurance regulations.

2. A ceiling has not been included in the manufacturing area.

3. Spray fireproofing 4. Floor drains 5. Explosion proof fixtures 6. Spark proof floor 7. Any mechanical equipment or machine bases

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

r'ïen ROM% LT APPROX.

IND. - SKU rOR.LEASEsz 3 ACRES FAcrXlmissKlomfflIIIAcusS3

rarl ,f rsEms EN Am

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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Wgts. kiAR r q'c'TY

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_

prii IF

.1

1) CnMPi. CROSS CPT ARW UNIT INCLIiNri . STACKING - NFW SFK

É) RAIMANN MiPTIPIF RIP UW SEK

3) wFINIG MOUiDFR 178 MM 5 HERDS SEK 92ø€-

4) WACn BANURW 78 (i MM SEK 15.58firie-

1 5) GFSSNER PGMF ENP TFNONER SFK 148 188i-h-

6) • BURMEK PNEUMATIC GLUE PRESS 2588 X 1388 MM. 3 SECTIONS SEK 18.888e- •

7) DUO 1 158e X 1388 MM. 3 SECTIONS SEK 16.888,-

1 1

•1 in

1 1

es

.1 1

•

1

Ti .•-r).NF:n Fri,35

AiTFRNRTIUE: 7R) ORFL-P HIGH FREQUFNCY GLUE PRESS 2588 X 688 MM

• SFK 145888- 7B) GLUE. SPRFRnER - NEW

SEK 18888- 8) ZUCKERMANN REVOLVING ROUTING 4. SANDING RCHINE FOR

SFRTS 288 - 1888 MM. leU, 1 WORKING HFFOIS. SEK 198,8889-

ALTERNATIVE SA) BF-VFTTE REVOLVING ROUTING MACHINE 1 HFAn.

SFK / 2 1', .8889- 9) wIrIn coPYING sPiNnu nil TIER FOR

TYPE WI60MAT9 I: L 1 6 MOinnING .D1- t!„

RITFRNATIUF SeR) MCC' uPYING SPTNnii, KliiO3FR 2 HFRDS

. SEK 54,088,- i. 8) WIGO COPYING SPINnIF MOMDFR FOR TURNFD CHRIR RACKSIDF

(IF NECESSARY), SEK 55,4811e-

it) EHEMANN BFLT SANDER (UPPER- .1- UNDFRiiNIT) 4 0 MM SEK 94500,-

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

2 Progress P-200 pnuematic drum sanders $ 1,640.00

1 Griggio P 5520 20" thickness planer $ 7,850.00

1 Poitras 3000 12" jointer $ 3,350.00

cont. on page 2

QUANTITY

-83-

4 allied woodworking machinery ltd. • lei 453 signet drive weston ontario m91 1v5

746.0157

page 2 cont.

QUANTITY MACHINE PRICE

el

1

.1

111

1 Verboom BBB-920/2 36" wide belt $27,000.00 sander.

1 Fletcher Talbot 450 sanding and buffing$40,000.00 machine.

1 OMW automatic feed and float head $18,000.00 router.

1 Sicotte J3H vertical boring machine $15,000.00

1 Balestrini 2 CAP horizontal slot $ 5,209.00 mortiser.

1 Balestrini 2 TAO 2 table round end $ 8,690.00 tenoner.

1 Balestrini 88A horizontal drill, dowel $20,400.00 inserter.

1 Balestrini F horizontal boring machine $ 4,900.00

2 . Fletcher Talbot edge moulding sanders $15,000.00

1 Makor CSP/6 automatic spray machine, $40,000.00 for sealer, with drying stacker.

2 Thru feed spray booths $ 4,800.00

1 Pacline overhead conveyor system $11,000.00

1 Thermwood spray painting robot (option)$50,000.00

1 Mote hot air and infra red drying $23,000.00 tunnel.

1 Murphy FBP 29 dust collector $34,000.00

2 Webster 25HP compressors $13,000.00

cont. on page 3

—84:-

4

• I 11

RW:ss ENCL.

08

I .

Iliallie4d53w.00dt wdro. rkintog mactarihin. .9e1 r1y5ltd. %

746.0157

PRICE: FOB Weston Ontario

DELIVERY: Within 3 months from receipt of order

TERMS: To be discussed

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—

TIER; LEST

12F CP Tronçonnage Fraisage

I In' Perçage

Fraisage Ponçage à

gabarit

2TA0 C7ON Tenonage

Fraisage à gabarit

e

.1

' MM 2CAP Mortaisage Mortaisage

II multiple

t< ri '''''':̀

t 1 — J /

.44

4%.

Tenonage 11

double mammon.

[ ffl

:eM

=! L

ID

1*

•

—86—

20030Seveso (Milano) Italia . C.sfi Isonzo 65

tel (0362) 521701 (3 linen) 61111

lb • le • BM

Tronçonnage Perçage

• ......

• ............ .....................

........... • ...........

. •

.1

es

1

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

Ambient Conditions

Power Reau.red

eed

THERMWOOD

PAINTMISER, CONTINUOUS PATH SPRAY PAINTING ROBOT

Corporate Marketing Headquarters Dallas. Texas (214) 680-2676

TECHNICAL BRIEF

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

on his best day

SPECIFICATIONS . . . 6 (additional ax s op: , onat)

. .. Jointed Arm Floor

Jc•nted Arm

Intrinsically safe, hydraulic'mecnanical . . . 18 pounds ful• speed

48 inches • 30 inch es second

• . 84 inches - 30 Inc'es'secdnd

135 ° 62* second

270 ° - 18:` second - 8.2' cone

-± 28 Closed .00P se'vO

MicrocomoJter base: s: c s•ate Se -nico-o—c•:•.disc me —2'y cor.: -

4 2 minutes path ,E.ba - zan e

po , nt to pont dependent or troz•am 9 (E=:ta - da:.el

Yes

Cort.nJo._.s pethrPc -• to pc nt Lead thro.,g' leacn

Yeç

Yes 8

Re-note Pro.g•am Se ec• ...i-es Termna strip for exte•na v. •i-o

RS232C selectable baJd rate asynchronous RS232C synCronous

40° to 120 ° F - 5'c to 95:: n.,miclity non-condensing

1 0 kv.

Co - Inued Thermwood Corporation reserves the right te make changes .- r - e siDez`tat ■ ons at any time without nOt.ce

Dale, Ind • Atlanta • Chicago — 8 9 —

• Boston • Dallas • Los Angeles • San Francisco • Dayton Ohio

QUALITY

Optional Gauge Bar and Stops

Automatic Stock Ejectors MODEL 805 •

lnfeed Roll Conveyors

Outfeed Belt Conveyors

Automatic Transfers MODEL 864

CUT-OFF SAWS ACCESSORY EQUIPMENT

I el I

ft

1 I

ENGINEERING - MANUFACTURING -907

1,

400 0" Long Bridrievt ell Systorn On A Contentious Production Lem.

f\luny Hdotlit-ti PlobInnt, by Pin e ussing Mt.( Ittenecs Tro:loy

From Production Thro‘le)le A'! Phdses Of Assemb'y And Finishing Sttivs

SPARKOMATIC INC. - MILFORD, PENNSYLVANIA.

—91—

PACLINE CORPORATION :t) A (, M% DRIVE GEORGE TOWN ONTARIO 1 71, dr)

3. RECOMMENDED SOURCE

Comparing the first two sources of equipment supply

it should be noted that the Allied Woodworking

Machinery Ltd. prices include for new machines whereas

IKEA Limited list of equipment is mainly reconditioned.

Brennan & Pinnock contacted Allied Woodworking

Machinery Ltd. and requested a quotation on the same

basis as IKEA's original list of equipment.

A copy of Allied Woodworking Machinery Ltd. reply dated

November 16th, 1983 is enclosed on the following pages

of this section.

The total cost of equipment = $300,250.00 F.O.B. Toronto

cost for K.D. drilling machines= $ 21,000.00

cost for power tools = 6,000.00

cost for machine spares = 12,000.00

cost for machine tooling = 17,000.00

Total of above cos -Es = $356,250.00

Estimates do not inlcude for Brennan & Pinnock Ltd.

design/set up fees, consulting engineer fees, City/

Hydro permits, inspections, etc., freight/shipping,

property refurbishment, mechanical and electrical

work.

1

.1

-93-

etaaallied woodworking machinery ltd. 453 signet drive weston ontario m91 1v5

II 746.0157 v "

November 16, 1983

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:

8" x 2" undercut saws - - -

10" x 40 HP multi rip

5hd thru-feed moulder

14" radial arm saw

28" bandsaw

8' stroke slide table saw

13/4" spindle shaper

2 head profile shaper

2 drum pnuematic sander

20" thickness planer

12" jointer

36" wide belt sander 2 head

6 head sanding + buffing machine

Auto feed, float hd. router

Handling equipment for undercut saws

$ 4,400.00

$12,000.00

$20,000.00

$ 2,200.00

$ 2,000.00

$ 4,800.00

$ 2,800.00

$10,000.00

$ 1,100.00

$ 5,000.00

$ 2,100.00

$18,000.00

$28,000.00

$10,000.00

$ 4,250.00

cont. on page 2

allied woodworking machinery ltd. 453 signet drive weston ontario m91 1v5

746 .0157 page 2 cont.

10 hole vertical boring eichine

Horizontal slot mortise

Round end tenoner

Horizontal drill, dowel insert

Horizontal boring machine 2 heads

2 edge moulding sanders

1 automatic spray machine, 3 or 4 sides

2 through feed spray booths

1 pacline overhead conveyor

1 paint robot

1 hot air drying tunnel

1 dust collector

50HP compressor

$ 8,000.00

$ 3,000.00

$ 6,000.00

$12,000.00

$ 2,500.00

$ 7,500.00

$28,000.00

$ 2,600.00

$11,000.00 NEW

$50,000.00 NEW

$15,000.00

$20,000.00

$ 8,000.00

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

,(

„,) i /.../ • e-c.) e_ ?e,thc

-6-7-0 -402

1

-eizot/k..)5ThF ec.n. Oi?pi ir

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1 1

fiteDO LL-k.i

1 DepeiL,Li- 25 -éj -

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cée Er(

4

a es

- 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

Z ga Z-Ca‘"1 tV rae (... ,

-99-

/0 e (eNt)

ex+IV3 Riming nr/Zolchnung Nr.

Pgr

0 2 1 51

Lei nriLltrforent Nr.

fre

ArtIkelnurrirn4rr

-..1

Itolbuns -

i4Cfel 77e L.

InrecfningibeekrIvning Einr1chtungsbeehrelbun2

/A/SE/7-14E zw1c-EzWE

P4PP£

Ers4ttef inetruktion Ers4rtrc Anweitung

Clarcurn

os, 13 Urfi rcla re Au astir! 1«

k,re)k ell

4

el

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•■■•■,

••••1.11

aase44:4-aLisat.rrE

-100-

Vid transport (Pirnvâg och bil) skall slitslàdan placeras g alt , • 1. • wra •

Beim Transport (Eisenbahn und LKW) .sollen die Faltkisten g - alte

•••■ • 49 A

■•■.«

WM.

• VERPACKUNGSANWEISUNG

MJUKT PAPPER MOT LACKERADE YTOR/ LACKIERTE FLÂCHEN MIT WEICHPAPIER SCHÛTZEN

(

.1

270] 4/6? Flerpack/GVP

'Landes med PP-band och kant-skydd/Umreifung mit PP-Band und Kantenschuti

--1—

Artik•Inumm•r Lev nrtlitsf. Nt.

814/ 1 1-#Ic42 1-27e 11/ 1,2 15.3

I lager/1m l agir Ants' CL-enh•ter I hdjd/ Anzahl CL-Einh•iten In der hifih•

2 Snick Stûck

Under transport/Wahrerc des Transport« Max vikt pi dverpall/MJ, Grwicht au f Obtrpalerta

2oo ,

411 (

el 4

Artikeinamn/Artikeln•m•

4 sreiet. kR r/H74 ■•Ç

Uin2c1, mm/!Bredd. fnrrl/ held rnmi mm j Breite, mm 1 HdhiLmm

Sryck/Stick

e3L2

CL-enhet/CL-Einhelt

1/22 O

Varningsttik•tt ttillg CL-Illhet: II bak- sidan/Warnungsetikette fûr schwere CL-Einheit: Siehe ROckselte

O VarnInesetikert tryckkinsflg CL•enhet: se beksiden/WarnungsatIkerte Mr druck- empflndlIch• CL-Einh.: Siehe ROckseite

O Mallanlagg av wellpapp aller liknande/ Zwisch•nlao• sus Wellpapp• odsir Ahnlichen

/200 878 /282

bLgeini

StrickfIlm/ Streckfolie

Krympfllm/ Schrumpfloll•

Styck. net-tovIkt. kg/ StBck, Net-togew., kg

Ante! styck. Stilc kzahl

22

enhettlast/ Unteilb•-• Elnh. lait

S‘—arnplat-ta melon CL-•nh•terna far art sekarstalla

stapling/tryck/Spanplarte zwischen den CL-Einheiter um Stapeluno/Druck sich•rzustallen

Antal/Anzahl 'Forman mm

CL-enhet fardlgetalles/ CL-Einhelt wi d fertiggest.

Emitter hent Inatr/ Datum Ersetzt /g ant. anw.

Av lev/Von Lief Sr an tan

iq.oq. ii

Pi CL/An CL

fUtfircleris.

lAusstel:er

79.0920 I Lase:miter% kod/ Laartriger, Kod•

4/o02.7

Volymdm3iBrut-tov, kg/1 rt VO!..cd Br.gew., kg

\fv- v çy,t1

el fi

I I

I I I

CIP INC. UUNIAINLK Viv. SUNLIFE BLDG,... 1155 METCALFE T.

4440,NT REAL

PHO NE . 514-7-'11e -4811 MR J C THOMPSON'MFG MGR

DCMTAR PACKAGING, CORRUGATED CCNTAINERE DIVISION 67890 AIRPORT ROAD

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

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& 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.

presentative

MISENER \tar

Financial Corporation

October 24, 1983

Brennan & Pinnock Limited 68 Byron Avenue East London, Ontario N6C 1C7

Attention: Mr. Neil Brennan

Dear Mr. Brennan:

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

I

4

as

1 1

as

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.

II

4

-124-

«II

f

.1

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

12 - Machine Operators @$4.50x2080hrs. $112,320.00

3 - Packagers @$4.25x2080hrs. $ 26,520.00

2 - Material Handlers @$4.25x2080hrs. $ 17,680.00

Sub Total $167,960.00

+ 5% increase for 1984 $ 8,398.00

TOTAL $176,358.00

Total expenditure on salary/wages = $120,750+$176,358

= $297,108.00/year

4 -125-

C. Employer's Contributions

Unemployment Insurance (U.I.C.)

Employee 2.3% of gross earnings Employer 1.4 x employees' contributions

therefore non productive @120,750.00/yr. employer's contribution = $120,750 x 0.023 x 1.4

U.I.C. = $3,888.15 (3.22%)

productive @176,358.00/yr. employer's contribution = $176,358x002'3 .‹.1.4

U.I.C. = $ 5,678.73 (3.22%)

Total U.I.C. = $9,566.88

Canada Pension Plan (C.P.P.)

Employee 1.8% of gross earnings Employer 1.8% of gross earnings

(Maximum contribution approx. $300/person based on maximum salary $18,500)

less basic exemption of $1800 =$16,700 x 0.018 = $300.63/yr therefore non productive @$120,750.00/yr.

employer's contribution =($300.63x4)+(15,750-1800)x0.018 C.P.P. = $1453.62 (1.2%)

productive @$176,358.00/yr (18 persons) employer's contribution =(176,358-(18x1800) x 0.018

C.P.P. = $2591.24 (1.5%)

Total C.P.P. = $4044.86

Workmens Compensation

Based on $2.76/$100 gross earnings

Workmens Compensation contribution = ($120,750 + $176,358) x $2.76

100

Total = $8,200.18 (2.8%)

4

d.

e .

f.

4

Other Benefits

A decision has yet to be reached by St. Leonard's

House, London as to other company benefits to be

given to the non productive members (5) in the

factory.

Allow $50/month/person

Therefore other benefits =12 x $50 x 5 = $3,000.00

Summary

Total Salary/Wage expenditure = $297,108.00/yr.

Employer 's Contribution

1. U.I.C. $ 9,566.88

2. C.P.P. $ 4,044.86

3. Workmens Compensation $ 8,200.18

4. Other Benefits $ 3,000.00

$ 24,811.92

This represents 8.35% of salary/wage expenditure

Canada Manpower Industrial Training Program(C.M.I.T.P.)

Under the C.M.I.T.P. program the employer is entitled

to reimbursement alhounting to 50% of trainees

wages for a maximum of 1040 hours and no more than

$250 per person per week.

Product

IKEA Limited 'Billnas', 'Kristina', 'Korpi', 'Rebecka'

and 'Rickard' chairs.

See telex from IKEA Limited dated October 13th, 1983

-127-

enclosed in this study for the quantities in the

first year of production.

Product cost for 1984 is not to exceed target prices

given by IKEA Limited.

g. Production Levels

The following assumptions have been made in the cal-

culations for this study:

IKEA production estimate - 30 chairs/hour

IKEA estimated production time - 45 min./man/unit

Brennan & Pinnock Ltd. estimated production schedule

for this project:

1st year of operation - 30,000 chairs (IKEA)

Subsequent years - 45,000 chairs (IKEA & others)

Figures are based on lshift only.

Maximum capacity - 23 chairs/hour

Work Day

= 480 minutes - (2x15 min. breaks + 10 min. personal allowance + 10 min. contingency time)

= 430 production minutes/day

Production Year

= 48 weeks (5 day week)

These figures are based on production standards cal-

culated on equipment installed and employment

structure as previously described.

h. Equipment

See Section 15 of this study for details of equipment.

-128-

3. COST OF GOODS

See copy of telex and letter on the following pages of

this study regarding cost of hardware and staples for

chair production.

Costs for lodgepole pine and spruce lumber were correct

at the time of preparing this study. These costs will

fluctuate however, depending on source and supply. Costs

include delivery to the factory.

Other costs were confirmed with respective manufacturers

or suppliers.

The following pages itemize the content of each type

›of chair.

Gables

2 pieces - 2 2 2 -

Parts

32 1/4" x 2 1/4" x 5/4 17" x 2 1/4" x 5/4 .13 1/2" x 2 1/4" x 4/4 13 1/2" x 2 1/4" x 4/4

Board Feet (B.F.)

1.26 0.26 0.42 0.42

0.24 0.46 0.67

2.11

6.24

2.50

8.74

HI .

11

À

11

ell

3. a. Chair: "KORPI"

2 pieces - 15 1/4" x 1 1/8" x 4/4 2 " - 14 3/4" x 2 1/4" x 4/4 2 " - 14 3/4" x 2 5/8" x 5/4

Seat

5 pieces - 17 3/8" x 3 1/2" x 4/4

Sub Total

+ 40% waste

Total

Summary of C.O.G.

Lumber - Spruce @$300/1000 BF 8.74 B.F. x $0.3 = 2.62

Box - $1.20 x 1/2 = 0.60

Screws = 0.20

Fixings = 0.45

Miscellaneous - packing, dowels = 0.25

Sub Total = 4.12

Finish = 0.50 Sub Total = 4.62

Allow 10% increase in C.O.G. for 1984 prices = 0.46

Cost of goods for "Korpi" $5.08

4 -130-

Board Feet (B.F.)

2.40 0.71 0.51

3. b. Chair: "REBECKA"

Gables

2 pieces - 35 1/2" x 3 1/4" x 6/4 2 " - 17" x 2" x 6/4 2 " - 13 1/4" x 2 3/4" x 4/4

Parts

1 piece 1 1 1 5 pieces 2

- 15 1/4" x 2 7/8" x 4/4 - 12 3/4" x 2 7/8" x 4/4 - 12 3/4" x 4 3/8" x 3/4 - 12 3/4" x 1 1/2" x 3/4 - 12 1/4" x 3/4" x 1/2 - 14" x 1 1/2" x 5/4

0.30 0.25 0.77 0.26 0.16 0.36

Seat

1 piece - 17" x 18 1/2" x 4/4 = 2.18

Sub Total = 7.90

40% waste 3.16

Total = 11.06

Summary of C.O.G.

Lumber - lodgepole pine @ $500/1000 B.F. 11.06 B.F. x $0.5 = 5.53

Box = 0.75

Screws = 0.20

Fixings = 0.75

Miscellaneous - packing, dowels = 0.25

Sub Total = 7.48

Finish = 0.50

Sub Total = 7.98

Allow 10% increase in C.O.G. for 1984 prices .. = 0.79

Cost of goods for "Rebecka" $8.77

3. c. Chair: "RICKARD"

Gables Board Feet (B.F.)

2 pieces - 36 1/2" x 3" x 6/4 = 2.28 2 " - 17" x 1 3/4" x 6/4 = 0.62 2 " - 13" x 1 1/2" x 4/4 = 0.27 2 " - 13" x 2 3/4" x 4/4 = 0.50

Parts

1 pieces - 12 5/8" x 3 1/2" x 4/4 = 0.31 1 " - 12 5/5" x 1 5/8" x 4/4 = 0.14 2 " - 11 1/4" x 1 1/4" x 1/2 = 0.10 1 " - 11 1/4" x 2 1/2" x 1/2 = 0.10 2 " - 14 1/2" x 1" x 6/4 = 0.30 1 " - 14 1/8" x 2 3/4" x 4/4 = 0.27 1 " - 12 1/2" x 2 3/4" x 4/4 = 0.24

Seat

1 piece - 17 1/4" x 16 3/4" x 4/4 = 2.00

Sub Total = 7.13

+ 40% waste = 2.85

Total = 9.98

Summary of C.O.G.

Lumber - lodgepole pine @ $500/1000 B.F. 9.98 B.F. x $0.5 = 4.99

Box = 0.75

'Screws = 0.20

• Fixings 0.45

Miscellaneous - packing, doWels = 0.25

Sub Total = 6.64

Finish = 0.50

Sub Total = 7.14

Allow 10% increase in C.O.G. for 1984

prices. = 0.71

Cost of goods for "Rickard" $7.85

(Allow additional 50 for stained chair)

-132-

3. e. Chair: "KRISTINA"

Gables Board Feet (B.F.)

2 pieces - 32" x 1 3/4" x 6/4 = 1.17 2 " - 17 1/4" x ; 3/4" x 6/4 = 0.63 2 " - 12 3/4" x 2 1/2" x 6/4 = 0.55

Parts

2 pieces - 15" x 2 1/4" x 5/4 = 0.58 1 " - 15 3/4" x 1 3/4" x 6/3 = 0.28 1 " - 15 3/4" x 5" x 8/4 = 1.09

Sub Total = 4.30

+ 40% waste = 1.72

Total 6.02

Summary of C.O.G.

Lumber - lodgepole pine @ $500/1000 B.F. 6.02 B.F. x $0.5 = 3.01

Foam for seat = 0.40

Seat 16" x 15" x 3/8" = 0.50

Material = 1.00

Box = 0.75

Fixings = 0.80

Miscellaneous - packing, dowels,

staples ... = 0.30

Sub Total = 6.76

Finish = 0.50

Sub Total = 7.26

Allow 10% increase in C.O.G. for 1984 prices = 0.72

Cost of goods for "Kristina" $7.98

(Allow additional 50 for stained chair)

3. d. Chair: "BILLNAS"

Gables Board Feet (B.F.)

2 pieces - 32" x 1 3/4" x 5/4 . 0.97 2 " - 17 1/4" x 1 3/4" x 5/4 = 0.52 2 " - 12 3/4" x 2 1/2" x 4/4 = 0.44 2 " - 12 3/4" x 1 1/2" x 4/4 = 0.26

Parts

'2 pieces - 15" x 2 1/4" x 4/4 = 0.46 1 " - 15 3/4" x 1 3/4" x 6/4 = 0.28 1 " - 15 3/4" x 4 5/8" x 8/4 . 1.01

Sub Total = 3.94

+ 40% waste . 1.58

Total = 5.52

Summary of C.O.G.

Lumber - lodgepole pine @ $500/1000 B.F. 9.98 B.F. x $0.5 = 2.76

Foam for seat = 0.40

Seat 15 3/4" x 15" x 3/8" = 0.50

Material = 1.00

Box = 0.75

Fixings = 0.65

Miscellaneous - packing, dowels, staples = 0.30

Sub Total = 6.36

Finish = 0.50

Sub Total = 6.86

Allow 10% increase in C.O.G. for 1984 prices = 0.69

Cost of goods for "Billnas" $7.55

(Allow additional 50c5 for stained chair)

-134-

It

18. COST OF GOODS - SUMMARY

Initial IKEA Ltd. order as per telex No. 380, dated

October 13th 1983:

1. Billnas chair pine natural - 6000 pieces x $22.10 = 132,600.00

2. Billnas bhair pine brown - 3500 " x $22.70 = 79,450.00

3. Korpi chair spruce natural - 5000 " x $19.00 = 95,000.00

4. Kristina chair pine natural - 5500 " x $22.10 = 121,550.00

5. Kristina chair pine brown - 3000 " x $22.70 = 68,100.00

6. Rebecka chair pine natural - 2500 " x $30.00 = 75,000.00

7. Rickard chair pine natural - 3000 " x $27.75 = 83,250.00

8. Rickard chair pine brown - 1500 " x $28.75 = 43,125.00

$698,075.00

$ 62,826.75

$760,901.75

Selling price to IKEA Limited

4- 9% Federal Sales tax

Total Price F.O.B. London Factory

Cost of goods

1. 6000 pieces x $7.55 = $45,300.00

It

2. 3500

3. 5000

4. 5500

5. 3000

6. 2500

7. 3000

8. 1500

30,000

x 8.05 = 28,175.00

x 5.08 = 25,400.00

x 7.98 = 43,890.00

x 8.48 = 25,440.00

x 8.77 = 21,925.00

X 7.85 = 23,550.00

x 8.35 = 12,525.00

Total C.O.G. $226,205.00

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BRANCHES:

SB/mj 0258B-1

-138- RENA ARTICLES D'AGRAFAGE ET CLOUAGE

(514) 489-6861 Montréal Telex: 055-66224

BUREAU-CHEF — HEAD OFFICE

6695 ST. JACQUES, MONTREAL, QUE. H4B 1V6

SIGNODE FASTENERS INC. 1 Toronto 115 Ridgetop Road, Scarborough, Ont. M1P 2K3 Tel: (416) 293-2411 Telex: 065-25189

Winnipeg 18 Bunting Street, Winnipeg, Man. R2X 2P6 Tel: (204) 633-9483 Telex: 07-57407

Edmonton 12932- 148 Street, Edmonton, Alta. T5L 2H8 Tel: (403) 453-3607 Telex: 037-2325

Vancouver 13350 Comber Way, Surrey, B.C.

V3W 5V9 Tel: (604) 594-7551 Telex: 04-351241

November 9, 1983

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 -

5 Year Lease to Purchase -

Duo-Fast 508D Staples (5m) Duo-Fast 5010D Staples (5m) Duo-Fast 5012C Staples (5m)

$134.50/ea.

e38.00/ea.

$ 3.98/box $ 4.05/box $ 4.26/box

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

2

for 30,000 ft property

3. Disbursements: Non productive salaries Advertising Stationery Telephone Postage Office & Shop Supplies Employer contributions Annual audit Insurances

Miscellaneous

4. Productive salaries

5. Mechanical breakdowns, service contract ( 1 year warranty on all equipment)

112,500.00

6. Marketing commission to Brennan & Pinnock Ltd.(based on 5% selling price to IKEA 34,905.00

$698,075)

$721,780.00 7. Sub total

8. Less Canada Manpower Industrial Training Program Contribution

Total production cost for 1984

See copy of Chartered Accountant's letter on

following page for cost of audit.

BvianJ. Niceargey CHARTERED ACCOUNTANT

1040 Adelaide St. N., London, Ontario N5Y 2M9 (519) 679-0960

October 28, 1983

Brennan and Pinnodk Ltd. 367 Queens Ave. London, Ontario N6B 1K5

Dear Sirs:

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

3. Disbursements: Non productive salaries Advertising Stationery Telephone Postage Office & shop supplies Employer contributions Annual audit Insurances Miscellaneous

4. Productive salaries

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.

-144-

111

•1 , , ,

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.

481

-145-

Is

is

II

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.

•1 1

-146-

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.

-148-

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

Weight - moderate 495 Kg/M 3 (31 lb/ft 3 ) air dry

Strength - moderately strong in bending, less strong in compression

Processing - seasons well, takes good finish & holds paint moderately well

Uses - construction lumber

IKEA Limited responded that Jack Pine is a shorter fibre

wood which is not as strong as Lodgepole Pine and had more

small black knots.

We suggested that the factory would initially produce pro-

ducts using the Lodgepole Pine. Samples, constructed of

Jack Pine, however would be submitted by the factory and

IKEA Limited would compare both the aesthetic and strength

values.

A cost saving using Jack Pine could be offered to IKEA Ltd.

which may or may not affect their decision in this respect.

411

1 «

!«.

In conclusion, IKEA Limited expressed their sustained

interest in this project and looked forward to the final

proposal.

We would express our concern on the employment term of

workers in the factory. This term has been set at six

months. Consideration should be given to extending this

period if at all possible.

A natural attrition of workers is expected for reasons

already outlined.

The problem exists however should we not get this natural

attrition.

Production will be seriously affected if after every six

months everyone leaves and new employees are introduced

because workers have to be instructed on machine operation

and a 'lead in' period is necessary before full production

could be reasonable expected.

This problem can be overcome by phasing in/out of factory

personnel on a staggered but regular basis.

The study had been based on an initial order of 30,000

chairs/year for a term of five years.

The production capacity of the factory is approximately

45,000 chairs/year on a one shift basis.

Brennan & Pinnock Ltd. have secured orders for all excess

production capacity from another company in Ontario if IKEA

Limited maintain their production requirement of 30,000

chairs/yr.

-152-

Support for this project has been very favourable and very

positive comments have been voiced on all aspects of the

proposal. We cannot however foresee the response of

local and national media services.

The validity of this project with respect to its objectives

are clearly evident and we look forward to the Executive

Committee's favourable response to proceed with the next

phase of the project.

A copy of the program of events for this project is

included on the following page of this study.

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SECTION TWENTY-ONE

ACKNOWLEDGEMENTS

21. ACKNOWLEDGEMENTS

We would like to take this opportunity to express our

thanks and appreciation to the following people for

their co-operation and input given to us in our pre-

paration of this study:

Mr. G. Pinder Deputy Commissioner C.S.C. Ottawa

Mr. M. Provan Chief Operations and Quality Control (Community) Ottawa

Mr. G. Martin District Director C.S.C. London

Mr. P. Wood Area Manager C.S.C. London

Mr. M. Elkins Regional Manager Industries C.S.C. Kingston

Mr. D. Kerr Regional Chief, Program Design and Resource Development C.S.C. Kingston

Mr. D. Evans Executive Director, Community Programs M.C.S. Ontario

Mr. A. Nuttall Director of Community Resource Centre Development M.C.S. Ontario

Mr. L. Beaupre Board Member N.P.B. Ontario

Miss C. Sparling Regional Manager N.P.B. Ontario

Mr. J. Burghardt, Member of Parliament London

Insp. J. Robinson Chairman, Citizens Advisory Committee London

Mr. R. Sexsmith President Labour Council London

Mr. J. Wilbee

Members

Mr. P. Jensen

Executive Director St. Leonard's House London

Board of Directors, St. Leonard's House London

IKEA Limited Vancouver

Mr. E. Ekman IKEA Limited Vancouver

-155-

1

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5:0Lie IfOlq CANADA

OCT 29 199) 199.i

• • • i■ 1 A tj

GANA DA

1. 1

diliA1161181111

DATE DUE

1

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