Monday, November 28, 2011

Why Does Carlisle / Hamayasu / Horner Stick with Ansaldo while Under so Much Fire?

Edit: Mid. January 2012 u p d a t e.

Samples of recent "fire" from rail advocates:

Perhaps Carlisle / Hamayasu / Horner are stubborn (or worse...) but their vices alone are hard to justify their glaring lack of responsibility for a $1.4 Billion public contract that they officiate over. There must be something else and it probably has to do with money and corruption.

Another thing that should make us suspicious is that City, HART and Ansaldo plan to sign this contract between Thanksgiving and Christmas, that is, during the time period that the public pays little attention to the news and the media tends to cover "holiday spirit" stories. This is exactly when the Alternatives Analysis was approved in 2006 which cemented the City's choice of "elevated rail" as the Locally Preferred Alternative.

There is no reason for selecting an inferior rail manufacturer that belongs to a troubled company (that wants to sell off its rail business), located in Italy, a country with possibly insurmountable debt problems. With so many qualified and reliable rail manufacturers, why are Carlisle/Hamayasu/Horner sticking with Ansaldo, the most troubled one, and one one of the most complaint-prone? Why would Hawaii source a train in Italy instead of Japan, China or Korea?

Of course FTA's "Buy America" requirement is nothing short of a joke because there is no comparable US manufacturer for passenger trains and rail cars. All of them are wholly owned subsidiaries of foreign manufacturers.

Note that when I wrote the piece on Don Horner copied below, Finmeccanica's stock had crashed to $5. Yesterday it closed down to $3.

-------- Original Message --------
Subject: Is HART Chair Don Horner Shamelessly Dishonest?
Date: Fri, 16 Sep 2011 15:07:26 -1000
From: Panos D. Prevedouros

Why would he say this?

Pacific Business News reported:

Don Horner, chairman of HART’s finance committee and CEO of First Hawaiian Bank, said he was satisfied that Ansaldo’s finances are in order and the city can proceed with negotiating a contract with the firm. He said he it also gave him “strong comfort” to hear Finmeccanica’s commitment to the project.

“Overall, and I can speak as a banker, I was very impressed with the substantial amount of profitability, the liquidity, the history, and the commitment from the parent company,” Horner said. “I am very pleased with the progress that we made today.”

When the truth is this:

WHEN Finmeccanica announced bad results on July 27th, investors strafed its share price, cutting it down by 28% in four days (see chart). In the first half of 2011, excluding a gain from the sale of one of its businesses, the firm made barely any profit: €13m ($18.2m) on revenues of €8.4 billion. Shareholders are spitting fire.

The Italian government holds a 32% stake. That prevents the company from sensibly quitting unprofitable businesses. Meshed together from a ragbag of defence and technology businesses formerly owned by the state’s IRI and EFIM holding companies, Finmeccanica has everything from helicopters to trains to gas turbines. Its former boss, Pier Francesco Guarguaglini, tried to simplify the group down to three areas: aeronautics, helicopters and defence. But the group still owns several businesses that do not fit.

Its biggest problem is AnsaldoBreda, a maker of trains and trams, which has lost more than €1 billion. The government’s unwillingness to allow job cuts makes a solution impossible. Politicians from AnsaldoBreda’s home region in Tuscany objected loudly this week after Finmeccanica’s new boss, Giuseppe Orsi, talked about selling the division. Some 60% of Finmeccanica’s employees are Italian, though the domestic market yields just a fifth of its revenues.

Finmeccanica is used as a dumping-ground for unwanted state assets. In 2008, when the government finally found a solution for Alitalia, the country’s loss-making airline, private investors gobbled up its profitable flight division but curled their lips at its maintenance business, so in 2009 it was sold to another group of Italian firms, with Finmeccanica taking 10%. Politicians have long pushed for a merger with Fincantieri, a troubled shipbuilder also under the government’s thumb. Last September Mr Guarguaglini was obliged to point out that Fincantieri’s activities have little to do with Finmeccanica’s.


  • Horner is Chair of HART
  • HART has an $1.1 Billion contract with Ansaldo
  • Ansaldo is owned by Finmeccanica
  • Finmeccanica has large debts to BNP Paribas (2nd largest French Bank)
  • BNP Paribas owns 1st Hawaiian Bank
  • Horner is CEO of 1st Hawaiian Bank

Thanks to Ian Lind for bringing this up:

1 comment:

Anonymous said...

Car-liar, Hamayasu and Horner are all a bunch of crooks, rotten to the core who are worse than terrorists that cause economic ruin to this island state and its residents in the $billions!

The only ones benefiting from this corruption is them and their cronies while you the taxpayers end up getting the shaft and left holding the debts while these crooks fatten their wallets laughing all the way to the bank for their kickbacks and back scratching prostitution activities.

Each taxpayer and your kids will be paying $7,600 annually for the next 20 or more years, that is money taken out of your paychecks that most will never even use the Rail service! This is no different than someone robbing you, however a criminal who takes $10 gets jail time and a fine, these white collar parasites who rob in the $$billions get re-elected with no time in jail.

Even if caught, they get to retire at full medical/dental with compensation usually more than you make because these crooks make the laws to serve THEMSELVES at your EXPENSE.