Broe’s northern gamble pays off

CHURCHILL, Man. – Mike Ogborn didn’t get the friendliest reception the first time he was introduced to the union guys.

His company, the Denver-based Broe Companies, had just taken over the rail line from The Pas to Churchill and the Churchill port facility from Canadian National Railway and the federal government. It set about the task of reworking what it considered onerous union agreements.

“They looked at me and one of them said, ‘well, from what we see so far, we aren’t very impressed.’ I said, ‘I’ll call down to head office and see if they can send somebody taller,’ ” said Ogborn, a short man.

That made the union guys laugh and ever since labour relations along the Hudson Bay Railway and at the Hudson Bay Port Corp. in Churchill have gone relatively smoothly.

OmniTrax, the company set up by Broe Companies to run the railway and port, has been able to make a go of two assets that CN Rail said many times were not viable and that it asked the federal government for the right to shut down in the 1990s.

The federal government wasn’t so sure and forced CN to look for a buyer.

It found Broe, which demanded the federal government also sell it the port so it wouldn’t be vulnerable to someone else buying the terminal and turning it into a “toll gate.”

OmniTrax took over in 1997 and hopes to expand the port’s business, even though it suffered through drought in the early 2000s and is hostage to CN Rail’s willingness to supply it with grain cars, a captive situation that the Canadian Wheat Board often fumes about.

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The board likes using Churchill because it is often the cheapest way to ship farmers’ wheat to buyers, but complains that the two national railways and the grain companies with terminals in Vancouver and Thunder Bay would rather ship to those destinations. The railways get a longer haul along their tracks and the grain companies are able to extract a fee for running grain through their terminals.

The CWB’s aggressive defence of the Hudson Bay Railway and the Churchill port is another example of OmniTrax’s ability to quickly get along with contacts that might be assumed to be natural antagonists: the board is often seen as a Canadian institution and a cause celebre among leftists who see it as a bulwark against corporate control of prairie agriculture.

Broe is an American company and a proudly aggressive capitalistic corporation.

“It’s a real entrepreneurial spirit,” said Ogborn in an interview during one of his frequent visits to his company’s northernmost railway. Broe owns 16 rail lines in North America.

He thinks his company’s entrepreneurial spirit is contagious, regardless of the political outlook of its partners.

“We are not constrained by phrases like ‘you can’t do that,’ ” he said.

“We don’t believe in that. We’re the type of company that says so what if no one has ever done that before. Let’s try to see if it works.”

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That attitude kept the rail line and port alive, something keenly appreciated by the railway unions and CWB.

“We’ve been able to build a good relationship with our employees at the port and the railway and energize them to look at things that maybe they haven’t done before but are possible,” said Ogborn. “We want to make their jobs interesting.”

Ogborn doesn’t appear to be exaggerating about the good relations that exist between the company’s management and its workers in Churchill. During a two-day visit, port workers repeatedly approached Ogborn while he was in town, with one young couple proudly showing him their baby when he arrived at a local restaurant. Ogborn invariably knew the workers’ and contractors’ names.

One evening, Ogborn sat easily in a lounge, chatting with locals and wheat board officials who were visiting the port.

It probably helps that Broe believed in this port, railway and workforce when others had written them off.

And even though the fate of the port may hang in the balance if the CWB’s single desk is removed – CWB grain makes up about 80 percent of the grain terminal’s volume – Ogborn is still optimistic about this far flung possession of the Broe empire.

Perhaps more prairie farm inputs can be brought through here, he suggested. Perhaps prairie pulses can be shipped here, bagged and sent south on empty cargo ships. Perhaps this can become the centre of a beefed-up Canadian naval presence for the Arctic.

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“We’re willing to try everything to bring diversification and volume to this port,” Ogborn said as he stood in front of his cold northern terminal with the sound of prairie grain being conveyed, shunted and poured into one of the vessels bound for the four corners of the world.