Tenaris ADR Rep 2 Ord Shs T.TS.B

RE:RE:Q4 2020 - Judgement Day

[Mediawatcher]

Hi LIIennn,

The problem goes well beyond the burn rate, but it will blow up to be sure if they continue along the same wretched path they have followed for more than a decade. The answer to how to achieve profitability and reduce the burn rate is blindingly simple, but not easy to execute.  It would take a high degree of courage, willpower, fortitude and determination, none of which Torstar has today.  A possible solution, in my opinion, is as follows:

1. Replace/eliminate the Board and remove the Voting Trust.  Not a single member has demonstrated a modicum of intelligence, competence or the ability to provide oversight of this corporate disaster.
2. Remove the senior leadership team starting with the CEO and CFO who are devoid of any strategic, operational or the minimum competency necessary to lead an organization in crisis.  They are obscenely compensated for their contribution and would not hold those positions in any other company in Canada.
3. Reset compensation levels across the company to establish appropriate compensation for a company losing money.  This would be the most challenging task, but the alternative for all is far less palatable.  They have seen hundreds of their colleagues forklifted out of the business.  Establish equitable and merit-based compensation that would allow employees to share in the recovery of the business.  Done right this would find a high degree of acceptance, assuming you weren't paying your Board chair $275,000 and your CEO $2 million+.  This isn't about imposing socialism, but about recognizing these aren't the golden years of newspapers and never will be again.  This would go a long way to reducing the burn rate.
4. Establish a culture of excellence in everything you pursue, especially in content.  Hire, train, retain the very best and have a recognition process that incentivizes excellence. See the New York Times for how great journalism can be profitable and how their journalists are recognized as some of the very best in the world.  It is hard to establish this culture, but this platform is burning at an alarming rate and to ignore it spells inevitable collapse.
5. Sufficiently capitalize the company to allow investments in longer-term initiatives that have a reasonable chance of success.  Selling assets to keep the lights on is not a formula for success and employees only see the panic in every move.  A new owner is absolutely essential and one that values the important role these business play in their communities.  Short-term profitability should not be a consideration. 
6. Establish a clear and coherent strategic plan that every employee can understand and embrace.  Ditch the gobbledygook and don't obfuscate when you don't have the answer or don't like the results.  Torstar has a history of making the "facts" fit the narrative they are trying to sell (see the long list of failures that are quickly swept under the carpet).  Be transparent and honest and employees and investors will support the company.
7. Leadership is absolutely critical.  The CEO must live the plan and be unswerving in his or her commitment to making the company a source of pride to employees and success in the marketplace.  The CEO will build a lean and committed team of individuals that will inspire confidence in everyone they lead. It will not be filled with cronies or opportunists, but rather disciples who believe in the pursuit of excellence.
8. Move quickly and ignore the naysayers.  This isn't going to be easy and some missteps will occur.  Decisive action is required when corrective action is necessary.  Having the support of the owner/s will be essential to achieving long-term success.

I am not going to build out the plan for them step-by-step but it is possible.  This is a turnaround situation and it requires a complete rebuild starting at the top. What I can't predict is the timing or the probability.  One way or other things are going to change because the current trajectory spells disaster.

MW