No matter how the company spins it, one of Canada's oldest and most important businesses failed today. There may be a new business emerging from the wreckage but a business that was (recently) a high tech world leader with long term Canadian roots is gone.
I suppose I could try to blame the Conservatives for the failure but that would not be correct. The failure has been long in coming and has its roots in the Canadian securities regulation system. Other issues are a need for a far better national research and development strategy. Yes, the Conservatives haven't fixed the problems here (in fairness they are working on securities regulation) but the Liberals had a chance before.
If the economy hadn't turned as sour as it is Nortel might well have survived. In bad times the weakest fail. We'll likely see more such failures -- and the Conservatives will get the blame for many of those failures. Strictly politically that's good for Liberals (assuming the election is not next month) but it's bad for Canada.
James Morton
6 comments:
Nortel has been on "life support" for the longest time.
Can you expand on the roots of failure in the Canadian securities regulation system?
It seems that greed in upper management killed Nortel, expansion, and product ill suited to the market place killed Nortel.
Sure, my point there was that the misstated financials got through the various provincial regulators -- and when they were uncovered the company started to collapse -- and yes it was greed motivating the misstatements. A single national regulator might well have caught the problems (of course the SEC didn't catch Madoff in the US so maybe I am too hopeful). The Conservative are working on a single national regulator and they are right to do be doing that -- Phil Anisman has been advocating for this since, I believe, the 1970's and if Anisman says something about securities it makes sense to agree because he knows of what he speaks (well, I disagree with him on the dangers of insider trading but that's an entirely different issue)...
Thanks for the explanation.
I'm not sure how the national regulator will go down in Quebec, but it is a step in the right direction.
(btw, nice to see you on the new aggregator).
WTF,
Agreed
james
The point would not be to blame the Conservatives for Nortel's past - that would be unreasonable - but the company is declaring bankruptcy *now* and the government is notable in its inaction as Canada's flagship technology company goes down in flames.
I've had 2 friends that lost their long term jobs @ Nortel in this latest round. Both are family guys with young kids.. I hope they'll be able to find comparable jobs in this market.
Everyone seems to be tightening their belts and even companies that are doing fine are putting the reigns on spending and exercising "financial prudence" .. just in case, it seems.
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