Nortel, and our techno-nationalist delusions -Andrew Coyne, Maclean’s Aug 31st

Andrew Coyne has changed my mind about Nortel’s sale to Ericsson. I suspected the Conservatives were reluctant to get involved since Nortel had most of its work force outside the country, and thus did not represent many voters. It turns out that Ericsson has in fact more workers domestically. Coyne also makes a good point about past government investment as sunk costs that won’t be recovered by handing Nortel to RIM. In our global economy, corporate ownership is fluid and ephemeral. Canada has lost many of its old corporate names to foreigners – Stelco and Falconbridge just two of several. Nortel has had several corporate name changes in its long history in Canada. It started out as part of Bell Telephone, incorporated as Northern Electric in 1895 and later became part of Western Electric and AT&T in the US. In the sixties, Bell Canada & Northern Electric was separated from US Bell and Western Electric by government decree, and in 1972 it became Northern Telecom getting involved in the electronic switching market as well as manufacturing telephones and combined research with Bell Canada.

Thus, Nortel‘s origin was what we used to call a “branch plant” of US industry, making the nationalist argument rather weak. It never was a “national treasure”, and in the recent past, their CEO’s have all been Americans.

There are always at least two sides to every story. Thank you, Andrew Coyne, for pointing out this side.