Wednesday, July 29, 2009

The Nortel fight breaks out

Tony Clement, grappling with the big issues, playing statesman on Nortel (and more below):
Since winning the bid, Ontario Finance Minister Dwight Duncan has been demanding the federal government step in to prevent the sale. Duncan says it would cripple Canada's competitive advantage in the telecommunications business to lose Nortel's assets to a foreign company.

Yesterday federal Industry Minister Tony Clement fired back.

"I find it very curious, actually, Dwight Duncan's intervention on this," said Clement. "It could have something to do with the fact that (Ontario is) on the hook for the pension issue and they are trying to offload the pension issue to us."

But Duncan says Nortel has not made any request to Ontario's Pension Benefits Guarantee Fund for assistance and the issue of pensions for former Nortel employees is "completely unrelated" to what will happen to the patents and wireless technology up for sale in the bankruptcy auction.

"It's just a cheap shot," said Duncan. "I suspect (Clement) is just lashing out because he has nothing else to do to explain the fact that their government has failed to protect the Canadian interest here."
Bit of a head shaking moment there. Sounds like the advocacy from Duncan, Ignatieff and various opinion is starting to rile Clement. He may be realizing that he and his government may have to step in or risk looking asleep at the switch and that's not sitting well. But there is indeed a pension issue to be dealt with here and instead of pointing at Ontario as if the Ontario government exists in a different country, he might be a little more sensitive to the fact that having gone through the GM bailout, the provincial fund in Ontario is hurting. The us versus them approach to Ontario rears its head once again here in Clement's remarks.

The public debate is broadening now as those opposed to a government review are starting to get in on the public relations battle. As this CTV report from last night outlines, Nortel is characterizing the transaction as involving Nortel's LTE wireless technology being licensed to Ericsson, not sold. Which might sound like a legally significant difference but depending on the terms of a license, can practically accomplish the same thing as a sale. More on the Nortel position here, "Nortel drops the gloves to go after RIM." John Ivison throws in all the ideological stuff: "Intervention argument is as bankrupt as Nortel."

And then there are some bare politics of the dispute that Thomas Walkom injects:
Every fibre of Harper's free-enterprise being will recoil at the idea of government intervening in the Ericsson sale. But two other factors are at play.

First, while the ruling Conservatives won all three Kitchener-Waterloo ridings in the last federal election, it took two of them by the very slimmest of margins. Second, many voters in that region consider Jim Balsillie a god.

If these facts don't justify government intervention on the grounds of national security, what does?

Asked with a bit of irony given the overall tone of Walkom's bemused column but also with a hint of truth given this government. Amazing how this issue has developed so many political tentacles so quickly.