Posts Tagged ‘MDA’

The Sky Is Falling… What’s Happened To Canadian Markets?

Damn! The TSX has been hard hit with the news that financial giant Lehman Brothers was becoming one the biggest bankruptcy stories in American history. Financial markets around the world are reeling with the news and some are calling the current situation the worst they have ever seen. Hard to believe that the TSX index has sunk into the 12,000 range after hitting highs around 15,000 in June. A 20% drop! OUCH!!!

With BCE, the world’s largest leverage buyout, a fading memory I shudder to think of what the index will do or look like under the Conservative plan to allow for more takeovers. This policy plan was shaped by findings made by a government appointed Competition Policy Review Panel.

The government appointed Lynton “Red” Wilson chair of the Competition Policy Review Panel and made the call for more foreign investment. Among the recommendations forwarded by Mr. Wilson, once a CEO of BCE, move the Industry Canada threshold from to investigate foreign investment from $295 Million to $1 Billion! The industries they would like to dissolve? Telecommunications, Airlines and Uranium mining. Hmmm! Considering Canada is one of the world’s largest sources and exporters of Uranium and Telecoms can basically print money in the age of the iPhone this hardly seems prudent. The airline industry has enough problems without further takeover talk. As a leader in at least one of these industries how does selling them off benefit Canadians or Canadian Markets?

The Conservatives, under massive public pressure, blocked the selling off of MDA but under the new proposed rules how many companies would disappear without the so-called watchdog looking? Remember that the MDA deal was the first ever blocked! Not calling for extreme protectionism here but the current trend in selling Canadian assets off doesn’t invoke scenes of sovereignty on the TSX, Alberta or the Arctic. Considering it’s been said that between 70 to 90% of mergers/takeovers fail it would be interesting to see whose lobbying dollars have been spent to push the sale of these industries. We’ll have to wait and see what happens to the TSX and what kind of government enters the fold after the upcoming election.

Arrow Anniversary This Week – Has Much Changed?

arrow_dview1.jpgThe Toronto Star had an interesting article regarding one of Canada’s engineering achievements, the AVRO ARROW.  A product of the Cold War it was designed to be Canada’s answer to protecting America from Northern threats as a supersonic all weather interceptor/bomber.   Ahead of its time (the Arrow could fly at twice the speed of sound – faster than our current fleet of CF-18s) the plane was even a potential export to our Allies (though the US or the UK weren’t interested in purchasing foriegn produced aircraft).  In any case it was a world class plane.

It was all for nothing in the end.  John Diefenbaker, the Conservative PM from the west, decided that despite AVRO being the the third largest corporation in Canada, employing some 41,000 people, that the Arrow project should be cancelled.  Many conspiracy theories exist as to why Canada’s National Defence and soveriegnty were trumped in this case.  (RL Whitcomb has an opinion as do many others)  Was it PM Diefenbaker’s way of improving American relations after to committing to NORAD?  Was the project costing Canadian taxpayers too much for what was delivered?  We may never know.

It will be interesting to see if MacDonald, Dettwiler and Associates Ltd, MDA,  is sold off in the coming days or weeks.  So far opponents have delayed the sale. Considering that the US and now Russia are limiting foreign ownership of key industries why can’t we do the same?  Have concerns about sovereignty and protecting the North really changed?  If the Conservatives allow the maker of the Canadarm and the recently launched Radarsat-2 satellite to be sold off they may be following the footsteps of Diefenbaker’s Conservatives.  After all renting (or have a contract to use) our locally developed technology is not the same as owning it.

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