Thursday, January 15, 2009

Why don't we bail out Nortel?

When Stephen Harper and Dalton McGuinty announced they would follow suit with the US and hand over a 4 billion dollar bailout package to the big 3, a large portion of the population was supportive of the move.

Checking the website of the CAW (Canadian Auto Workers union) it clearly shows that 13% of their 250,000 members work directly for major auto companies. That means 32,500 people are employed by ALL major automakers that have plants in Canada, not just the big three. In addition the two of the big three have posted tremendous loses in the last 4 years. GM has lost 73 billion dollars since 2004 and Ford lost 12.7 billion dollars in 2006 alone.

That just goes to show a serious lack in the management of these companies even in times of economic boom. But we still gave them 4 billion of our tax dollars.

Nortel on the other hand still employs about 32,500 people (only about 6500 in Canada though) and compared to Ford and GM Nortel actually made money in 2006.

I'm not saying Nortel is an amazing company with and excellent business model but I'm saying that people are quick to judge and remember how much money Nortel cost a lot of in the stock market. A poll in the Globe and Mailshowed that 88% of respondents didn't think that Ottawa should bail out Nortel.

If the government wants to give money to companies with ailing business strategies that are years past their prime like GM and Ford why not give at least a little money to Nortel? The deserve it just as much as those wonderful people in the big 3. Maybe if the employees of Nortel had a huge union behind them it would be a little different who knows?

I just know that thousands of Canadians will lose their job and that a government that was so quick to help the auto-industry seems to want nothing to do with the tech sector.

Muchacho Enfermo

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