More About Nortel, RIM, and Canadian Economic Nationalism

28 07 2009

The Ontario government and the Official Opposition have sided with Jim Balsilie in his fight to acquire the wireless assets of Nortel networks. The leader of the Liberal Party, the usually somnolent Michael Ignatieff has roused himself and sent an open letter to Prime Minister Harper requesting that the federal government investigate that possibility of blocking the pending sale of Nortel’s wireless division to Swedish electronics giant Ericsson.

David Olive of the Toronto Star has provided ten reasons why the government should keep Nortel’s wireless assets in Canadian hands.

Dwight Duncan, Ontario’s finance minister, was interviewed about this issue (see here). I must say that Duncan’s performance in this interview was rather poor: he was unable to answer basic factual questions.

Conservative Industry Minister Tony Clement has said that he has not ruled out intervening in the deal. For its part, Ericsson says that it is confident the deal will be approved. Perhaps this is because Clement has shown in the past that he is (generally) lothe to intervene in foreign takeovers of Canadian firms.  Theo Peridis, professor of strategic management and international business at York University’s Schulich School of Business, notes that there is ample precedent for allowing Ericsson to take over Nortel. He says: “When you allow (miners) Inco, Falconbridge and Alcan – which are real icons and the wealth of Canada in terms of natural resources – to go into foreign hands, it’s very hard to make an about-face on Nortel.”

Check out this video slideshow on history of Nortel.