The Gazette from Montreal, Quebec, Canada • 8

EARLY CD. ME 2781-83 16.77. TSE 5598.82 8.01 LONDON (100) 3979.10 15.80 HONS KONG 12477.55 72.09 TOKYO 20466.86 "214.81 MEXICO 3213.33 53.84 1 GOLD (NY) $378.10 $2.10 DOLLAR 74.72 0.16 I I Weather C8 THE GAZETTE FRIDAY, NOVEMBER 1, 1996 JAN RAVENSBERGEN THE GAZETTE Canada of Ottawa. Last spring, Tele-sat left longtime partner Spar twisting in the wind by striking a U.S. alliance.

The new Spar project, christened Bo-realis, would "re- Keep tabs on your stocks with The Gazette's Stock Quote Hotline. Call 555-1234, code 3500. Each call costs 50 cents. Oaz flet to build $230-million pipeline ANDY RIGA THE GAZETTE It's a step in the right direction, invigorate the operation" in Ste. Anne, Watson said.

It would sus-, tain the current work force and create "anvwhere as antennas, he said. The satellites' propulsion system would be provided by a U.S. partner, CTA Inc. of Rockville, Md. While there aren't enough details public yet to declare Borealis viable, one financial analyst who follows Spar welcomed the initiative.

"They're positioning themselves for what we'll see happen very soon" that is, a resolution of the Canadian direct-broadcast debacle and a potentially rapid spread of smallsat technology, said James David of brokerage HSBC James Capel Canada in MontrealThere is an inherent demand for smallsats, worldwide," David said. "Historically, we've seen Spar kind of sit around and wait for things to happen," he said. But now, "I think it's en couraging that we're seeing them take the bull by the horns, and trying to make things happen." Watson undertook a financial and: managerial housecleaning after he-joined Spar from Rogers Cablesys-tems Ltd. last spring, David noted, and "Spar is an entirely new company, from a management perspective. The goal of Borealis is to provide "a clean, simple and economical solu-; tion" to the difficulties in getting satellite-TV up and running for Canadians.

The Express Vu Inc. arm of Montreal's BCE Inc. knows all about those difficulties. Hobbled by technical, managerial, regulatory and political problems, Express Vu has missed four PLEASE SEE SPAR, PAGE C3 An ambitious proposal to design and assemble small direct-broadcast satellites at the Spar Aerospace Ltd. plant in Ste.

Anne de Bellevue would secure the plant's long-term future, Spar president Colin Watson said yesterday. The Ste. Anne plant, a cornerstone of Montreal's high-technology scene for more than a quarter-century, currently has 630 people on its payroll and a thin order book. The Spar plan for small satellites, or smallsats, aims initially at the Canadian market, offering a home-grown solution to the direct-broadcast soap opera of the past two years. Significantly, it also offers no role to Telesat from so up" new analyst says.

jobs. "This would be a real shot in the arm for Ste. Anne," he said. The plant would assemble the smallsats after building their electronic pay-loads and other key components such His wife died. Then his plant burned.

But a local paint-maker found the strength to rebuild '5ikhfe ir-sr-? A I 7, I I i v-1 ft Gaz Metropolitain says it hopes to start construction in December 1997 on a $230-million, 220-kilometre natural-gas pipeline between Lachenaie and the New Hampshire border that will create 3,700 construction-related jobs. The project, announced to coincide with Quebec's socioeconomic summit, has been approved by Quebec's Regie du Gaz Naturel and is to be submitted to the National Energy Board within six months, Thierry Vandal, Gaz Met's director of planning and development, said last night. "It's certainly a project that we believe has a very, very high probability of being realized on this schedule," Vandal said, adding that environmental-impact studies have been started. Gaz Metropolitain will manage the construction project for TransQuebec Maritimes Pipeline, of which Gaz Met and Calgary's TransCanada Pipelines are equal partners. The pipeline, which is to run through the Eastern Townships, will carry Canadian natural gas to markets in New Hampshire, Maine and as far south as Boston.

(The starting point, Lachenaie, is on the North Shore near the eastern tip of Montreal Island.) Construction on the U.S. portion of the pipeline- a $275-million project is to start in the spring of 1998. Both portions are to be ready by Nov. 1, 1998. The U.S.

portion is being sponsored by the Portland Natural Gas Transmission System, of which Gaz Metropolitain owns 18 per cent and Trans-Canada Pipelines owns 20 per cent. The U.S. Federal Energy Regulatory Commission gave preliminary approval to the U.S. portion in August. Vandal said the Quebec portion of PAUL DELEAN THE GAZETTE rno Jakabovits couldn't speak as he watched the thick black smoke billowing from the UCP Inc.

paint-manufacturing plant in Laval. That was his life's work going up in flames last May 23, just a few months after the death of his beloved wife and partner Elisabeth, and it left JOHN MAHONEY, GAZETTE UCP's new home in Baie d'Urfe' is a dream come true for Erno Jakabovits (left). The morning after May's awful fire (below), his son Zoltan was on the phone as the recovery effort began. him numb. "In 1971, Benjamin Moore had offered to buy our plant, for a very big price," recounted UCP's 73-year-old president, a survivor of the Bergen-Belsen concentration camp who fled his native Hungary for Canada with his wife and two boys during the 1956 revolution.

"I wondered what we should do. My wife said "This is our third child, this The couple did not sell to Benjamin Moore then, and Jakabovits did not surrender to the ravages of a multimillion-dollar fire 25 years later. In a remarkable example of tenacity and resourcefulness, UCP Inc. has risen from the ashes to almost completely reclaim its position in the Canadian paint-products market. The key, Jakabovits said, was the speed of the company's response to the fire, of undetermined origin, which destroyed UCP's Laval manufacturing facilities.

"If we lost our customers, forget about rebuilding," he said. His son Zoltan, 48, UCP's vice-presi- said. In two weeks, half the staff was back at work. Within four weeks, they were up to 85 per cent of 1995 shipping volume. lost few customers and our sales volume decreased only slightly," said Al Stieber, assistant to the president.

UCP, which sells about 12 million litres of house paints and architectural coatings annually (including the Elegant, Ultralux and Solignum brands), employs about 80 people locally and 200 over-all. It has offices in Toronto and Atlanta, and retail outlets in Ottawa and Hull. Sales are about $15 million a year, and Polyval, the industrial-paint side of the business, "is not far behind," Jakabovits said. Ninety per cent of Polyval's products are exported. Before the blaze, UCP had been dent, was on the phone almost immediately to clients, suppliers and other local manufacturers.

Within days, he had arranged with two other local manufacturers to have UCP use their facilities when their regular shifts ended. "We'd go in at 4, using our own formulas and raw materials, and work two shifts, till 8 a.m.," Zoltan said. A large warehouse across the road courted by the Tennessee Valley Authority for a possible move to the U.S. The offer included tax breaks, a low mortgage rate and other incentives estimated to be worth $2.6 million over 10 years. UCP had been mulling the offer.

But the fire helped make up Jakabovits's mind. "At my age, I didn't feel like moving," he said. "We still had one local plant; "It was vital that we keep producing." Zoltan Jakabovits the pipeline will bolster the natural-gas distribution system in the Eastern Townships, where consumption has been growing. The Lachenaie-to-Boston pipeline could eventually form part of Gaz Met's plan to connect the Sable Island gas field off Nova Scotia through New Brunswick and Quebec and then on to the lucrative New England market. But a rival consortium has submitted a proposal of its own to connect Nova Scotia through New Brunswick to New England.

Vandal said the project announced yesterday is not contingent on Gaz Met getting approval of its Sable Island pipeline. "The project we're announcing now is fully contracted it has a life of its own," he said. "It's in the very advanced stages of development." The NEB is expected to approve one of the Sable Island projects both valued at about $1 billion late in 1997. The link would be in service by late 1999. "Right now, we're still in the early planning stages of that project, compared with the one that we just announced," Vandal said.

In September, Gaz Met announced a proposal to build another pipeline, which would link St. Nicholas, south of Quebec City, to Riviere-du-Loup. That $250-million project, which would also create 3,700 person-years of construction jobs, hinges on approval of the Nova Scotia pipeline and would be completed in 1999. Airline pilots' unions to merge VANCOUVER The U.S. Air Line Pilots Association yesterday said its board voted to merge the uniun with the Canadian Air Line Pilots Association.

The merger requires the formal approval of the Canadian union, which is expected during a convention in Quebec City scheduled for Nov. 19-21. "This merger will be the first step toward ensuring that pilots of different nations will not be pitted against one another," said J. Randolph Babbitt, president of the U.S. union.

The U.S. union represents 43,000 pilots at 38 U.S. airlines. The Canadian union's more than 2,700 members work at 10 carriers, including Air Canada. BLOOMBERG BUSINESS NEWS from the Laval plant escaped the blaze, giving the company some inventory from which to draw.

A mothballed local plant was reopened for UCP's use. American companies helped fill its orders, and so did a local company that's usually one of UCP's competitors. The sister company in Boisbriand, Polyval Coatings, did double duty to help keep production flowing. "It was vital that we keep producing," Zoltan said. "This was the peak season (for paint).

Clients like Beaver Lumber and Sodisco-How-den needed their (house-brand) stocks then. "What was crucial was co-ordination. We lost half-a-million (dollars) of labels in the fire. We had to have the printers producing the labels for the products we were manufacturing at that time, so we could get them out as quickly as possible. And we had to produce the key products first." Within a week of the fire, UCP had set up headquarters in a trailer on the site and resumed shipping paint "to show we were still alive," Zoltan why break everything up?" He did, however, need to move.

The 33-year-old, twice-expanded, Laval plant, insured for $5.5 million but "worth much more," was a complete write-off. A local real-estate agent helped solve the dilemma. He called after the fire to alert UCP to the availability of the International Paint plant in Baie d'Urfe, an 8-year-old manufacturing facility along the Trans-Canada Highway. The deal was signed in August after a few months of negotiation. UCP has not yet received its insurance settlement, but a loan of more than $5 million from the National Bank of Canada -whose chairman, Andre Berard, personally okayed the transaction after meeting with Jakabovits and touring the Polyval plant allowed it to make the purchase.

UCP started moving in this month, and currently is manufacturing about 2,000 to 3,000 gallons a day. Production will gradually increase to 15,000 to 20,000 gallons a day International Paint still occupies the lower floor, but is due to vacate by mid-December. The ultra-modern plant is a far cry from the rented garage on Notre Dame St. E. where Jakabovits began his business in the late 1950s.

A chemist by training, he would mix 50 gallons of paint in the morning and try to sell it to local contractors in the afternoon. "I would never in my life dream we could have such a facility," he said yesterday. The furnishings at the new headquarters have seen better days and the decor is stark, but one fixture stands out. It's a special award, presented last month at the annual marketing show of the Sodisco-Howden hardware group. UCP got it for "miraculous recovery" "In our opinion," said Stieber, "it was no less than that." si war wlfSi global, CFGF invokes sick kids MARY LAMEY THE GAZETTE during telethons broadcast over its airwaves in the last 20 years.

President Rene Desmarais warned that such support could be jeopardized if the profitability of CFCF is damaged by new competition. The event was staged by National Public Relations, the country's largest PR firm. Its involvement with CFCF prompted one highly placed Montreal corporate lawyer to comment: "There's one thing National excels at. They run the toughest scare campaign money can buy." CFCF-12, which has enjoyed a 35-year stranglehold on English private broadcasting in Montreal, is urging the public to voice its opposition to Winnipeg-based Global's "back-door" effort to enter Montreal, by writing or calling the Canadian Radio-television and Telecommunications Commission. Desmarais decried Global's attempt to enter Montreal through a regulatory loophole.

Instead of proposing to launch a new station, Global has formed a partnership with Tele-Metropole to revitalize Quebec City's CKMI, currently a CBC affiliate, and transform it into Global's first Quebec outlet. The station would broadcast Global's signal into Sherbrooke and Montreal. Global hopes to begin broadcasting next September, but must win CRTC approval first. Hearings are scheduled to begin Dec. 2 in Montreal.

The saga of the duelling broadcast ers is made more complicated by the fact that CFCF is owned by Groupe Videotron Ltee, which also owns Tele-Metropole, a 49-per-cent partner in CKMI. Videotron wants to sell CFCF and the price it gets will depend very much on whether or not Global is in the pic-. rare. A June research report issued by Nesbitt Burns, and distributed to reporters by Global, placed the value of CFCF at between $90 million and $105; million if CKMI's license is not ap-: proved and between $70 million and: $80 million if it is. Desmarais acknowledged that in mounting the campaign to block Glob- PLEASE SEE CFCF, PAGE C3 CFCF-12 made a naked pitch to the emotions of Montrealers yesterday, reminding them of the station's long involvement in causes like telethons and other fund-raising ventures, all of which could be jeopardized if rival Can West Global is allowed to enter the local TV market.

At a press conference attended by management, union leaders, on-air performers and community supporters, CFCF officials noted that it has contributed $4 million in time and money to support research into children's diseases, and CFCF viewers have donated more than $27 million Eurotunnel chairman to quit. PAGE C2 Cinar adopts Paddington Bear. PAGE C3 Fidelity pulls Hirsch ads. PAGE C7.