Can someone please ask Federal Industry Minister Tony Clement, Finance Minister Jim Flaherty, Prime Minister Steve Harper and Ontario Premier Dalton McGuinty to clearly outline why it made sense to make a $13B+ bailout investment in bankrupt GM and Chrysler yet turn down bankrupt Nortel; the anchor of Canada’s technology industry?
This is an obvious question that every Canadian and Ontario tax payer should be asking before it’s too late.
In my opinion the reason for letting Nortel die is more of a political decision than an economical one. My justification for this opinion – I can’t reconcile why it made more economical sense for the Federal and Ontario governments to invest in GM and Chrysler than in Nortel. In my opinion, if the numbers don’t add up economically than I guess it must be more of a politically-driven decision. What would justify a political decision to let Nortel die? Well most Canadians have a strong resentment against Nortel since the majority of us have lost big $$ on this once-beloved stock – how many political votes would saving Nortel generate as opposed to saving GM and Chrysler?
Well, I lost money on Nortel too but I know that it was my decision to invest in it and that any investment comes with risks including management corruption risk (which of course was a root cause in Nortel’s demise). I also, however, know that this company is extremely important to Canada and the local technology industry. What most of us are failing to recognize is that Nortel itself holds significant Canadian technological and historical value, economic value, and is perhaps far more able to make a come back in some shape or form than the aforementioned auto companies. We must ask our government the tough questions now before it’s too late.
What kind of questions should we be asking our government leaders?
How about these:
i) How many Canadian jobs were saved in those two auto company bailouts and what is the economic effect of those investments?
ii) Does the economic benefit of saving GM and Chrysler outweigh other bailout requests by other companies?
iii) Does it make more sense to save automotive manufacturing jobs as opposed to innovation and technology jobs at companies like Nortel?
iv) What is the long term impact of letting Canada’s technology anchor and largest spender on Research and Development die or end up in the hands of foreign companies?
To sum it all up: Why does it make sense for the Canadian/Ontario tax payer to invest $13B to save GM and Chrysler while letting Nortel get sold off piece by piece to foreign companies at ‘fire sale’ prices? Former Nortel executives John Tyson and Ian Craig posted a full-page advertisement today in the Ottawa Citizen on behalf of the ‘Nortel Champions’ asking the government this very question and asking you to contact your government representative before it’s too late. The key message in this advertisement is that there is still time. Here is the ad:
Isn’t the master plan and natural evolution of any developed country to transition away from manufacturing and into a next generation knowledge-based economy – one based on innovation, professional services and one that is less dependant on the sale of natural resources and manufacturing? How does letting Nortel dissolve into the hands of foreign multinationals align with this plan and evolution?