What on earth took so long for the Canadian Federal Government and RIM to wake up and realize that Canada’s prized telecom assets were up for grabs ? The Nortel bankruptcy fiasco has been going on for 7 months. Nokia Siemens offer for the CDMA business was made 2 months ago, and RIM and the Government decide at the last minute, almost after the point where it is too late, to make an issue of these assets.
I’m figuring that both Tony Clement, and Jim Balsille are both smart business minded individuals and savvy negotiators; Both well aware of the deadline, both well aware of the consequences of selling these assets to a foreign firm, yet, both decided to leave this discussion to after Friday’s deadline. Assuming that both are smart, and knew what they were doing, I suspect that these discussions were purposely left until the deal was closed, and winning firm decided.
Now that Ericsson has won the auction: What is RIM looking for ? What is the Federal Government looking for ? I suspect they are both trying to wring some concessions from Ericsson.
RIM could be looking for some of the tax losses, R&D tax credits, or, most likely, patents.
The Government – they want to guarantee jobs of course, but, they probably don’t want to provide the $300 Million EDC loan to Ericsson – the same loan guarantee they offered to Nokia Siemens. Ericsson is asking for it. Now, how can the Government get out of it ? And in the mean time, Ericsson is asking for Canadian money to finance Canada’s assets. You don’t think part of Nortel belongs to Canadians ? Think again. We should add up how many $’s Nortel has received over the last century – R&D tax credits, EDC loans, payments; This isn’t just a Canadian company – it’s partially a company belonging to Canadians.
These last minute poker tactics might work, but, at what expense ? Change the rules enough and Ericsson might walk. Where does that leave us ? What other Canadian company can come to the table when / if Ericsson walks ?
On a completely unrelated topic, I’m typing this email on a airplane on my way back from Denver. The lady in the seat sitting next to my 11 year old son is watching a very inappropriate movie. My son keeps looking over (I’ve now switched seats with him), but, my question is: shouldn’t the airlines better screen this public content ?
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