# Brain drain - Ontario high tech



## james4beach (Nov 15, 2012)

This is just one anecdote but I thought I'd share.

There was a nice "reunion" here in the USA on the weekend, a bunch of electrical & computer engineers from the University of Waterloo, all from the same research group. Age range 30 - 45. In the last few years (2005 - 2015) nearly everyone had jobs in: Kitchener/Waterloo/Cambridge, Toronto, Hamilton, Ottawa. Most had PhDs and rest had Masters degrees.

What's interesting is that of all the students from our research group, over 75% ended up in the USA. But going to the US was never our original ambition. All of us worked in Canada for several years, continued to seek jobs primarily in Canada, and only moved to the US when we were unable to find good stable jobs. Two recurring themes I heard at the party were the collapse of RIM / Blackberry (obviously a huge impact in Waterloo), and the unavailability of stable high-tech jobs in Toronto & GTA. Several of us including myself had been laid off in Toronto and were unable to find a new job in the region.


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## andrewf (Mar 1, 2010)

That particular industry has definitely withered in Canada. I'm not sure the same applies in software development.

There also seems to be a bit of a resurgence in hardware in Waterloo. Google hiring lots of network expertise and many hardware start-ups. Doesn't replace big employers like Blackberry or ATI (acquired by AMD then run into the ground).


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## james4beach (Nov 15, 2012)

That sounds promising about a hardware resurgence in Waterloo.

The Nortel collapse also left a big void. My area of specialization would have been perfect for Nortel.

I feel like both Waterloo/GTA and Ottawa could be real hubs of high-tech. Unfortunately currently you have a lot of ex Blackberry and ex Nortel engineers. That's a lot of untapped talent that is going to flee the country or be under-utilized unfortunately... there must be a solution for this.


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## james4beach (Nov 15, 2012)

There's another aspect here I feel a bit guilty about. I received significant Canadian research funding (from NSERC) which meant to build domestic talent.

For my part though, I continue to pay Canadian taxes even though strictly speaking I don't have to. Ultimately though I'd like to continue my career in Canada and the ideal situation would be that NSERC funding + knowledge gained from the USA benefits Canada. _I hope_.


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## slacker (Mar 8, 2010)

How about some of that sweet Bombardier Government money


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## carverman (Nov 8, 2010)

The collapse of the Canadian high tech (especially in Ottawa)was inevitable but not predictable. 

Huge corporate egos and losses and not really being in control of their market share contributed to their demise.
The 2008 US financial economic crisis, the unwillingness of the Canadian Gov't to assist these companies when they were obviously going down hill, (unlike the Bombardier bailout or the GM/Chrysler bailout), 
and trying to bail as much as possible...downsizing to keep the best still on the job, this all contributed to the eventual collapse of each one.

One by one they all eventually collapsed, with BILLIONS of market cap lost,and many shareholders losing their life savings.
Too big to fail...how many times have I heard this expression about Nortel since January 2009.; However, that was
the straw that broke the camel's back, as the main market was the US and the recession there put a brake on Nortel's
customer spending..hence resulting in Nortel "cooking the books" to provide some information for the stock market pundits.


Ottawa was referred to as "Silicon North" and there were many upstart companies, hardware and software that
either employed those that crossed over, or hired directly through head hunters.

The Canadian Gov't basked during those times with their Ottawa/Waterloo "high tech designation", Billions of tax revenue
was collected and for the moment everything seemed like it would go on forever..but then the high tech bubble
burst, and the fallout was brutal.

It was not the engineering, or the technological innovation..it was the upper management and their callous approach to expansion...not really being sure what lies ahead, banking on the customer, and markets actually being there at the time when the product was finally debugged and ready for shipping.

Customers that had previously agreed in principle to buy or at least take on trial (field verification) closed their purse strings and the product lines that were so innovative and cost hundreds of millions to develop and bring to market were left stranded.
This resulted in negative cash flow, borrowing to pay salaries and other expenses and the eventual mass layoffs, divisions at a time.

Companies like JDF-Uniphase, Nortel, Mitel, and others, just didn't plan for the lean years of high tech enterprise.

Will we ever see another high tech bubble in Ottawa?...highly unlikely...the momentum and the markets have changed
drastically in the last few years. While there will always be room for innovative small companies that employ the smartest
and best engineers, these will be very small enterprises....the big corporate giants of the 80s/90s are gone forever.


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## james4beach (Nov 15, 2012)

Absolutely it's the management... another example of MBAs destroying perfectly good industry.


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> ... What's interesting is that of all the students from our research group, over 75% ended up in the USA. But going to the US was never our original ambition ... Several of us including myself had been laid off in Toronto and were unable to find a new job in the region.


A G&M reporter was trying to argue that the number of people leaving Canada to go to the US was in line with the historical numbers when writing about the brain drain in the late 90's. 

He changed his mind when he interviewed two classes at university about to graduate where two people were staying in Canada. At the time, Toronto offered the two classes a total of five jobs with limited chances of a raise. Just NYC companies, never mind the rest of the US, was offering 1000 jobs, a $50K signing bonus (helping with any outstanding debts) and raise reviews every six months.

A response to the article was a former Ontario resident who moved to California. His message was that the when all the costs were added up, he was basically in the same boat as when he lived/worked in Toronto. He was not looking to return as career opportunities were far more plentiful. (I can't recall if his was the response that said he planned to return to Canada in retirement.)


It is pretty much the same time as the KW Record was highlighting the thirty year old RIM retirees who were donating $2 million in stock to charity to encourage others in their situation to give back to their communities.


Basically ... until gov't plus Canadian management quits putting up roadblocks, the same situation is going to be repeated.


Cheers


*PS*

Or to put it another way ... what new and how can changes be made?
There's a long history that includes the Avro Arrow specialists.


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## rl1983 (Jun 17, 2015)

Very interesting to read this.

The local government here is bragging about high tech making a come back here in Vancouver, be interesting to hear what the professionals think about that.


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## Eclectic12 (Oct 20, 2010)

That's where looks can be deceiving.

I can recall looking at a software company in the late 90's that was incorporated in Las Vegas, NV that seemed like an American company. When one dug beneath the covers, the head office in NV had about ten people and all the programmers, shipping, HR and everything else (300 or so) were in Vancouver.

It seemed more about coming across as a US company to get around any concerns about "why are we buying foreign".


Cheers


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## carverman (Nov 8, 2010)

Eclectic12 said:


> Basically ... until gov't plus Canadian management quits putting up roadblocks, the same situation is going to be repeated.


You can't count on the Canadan Govt. It's really a wonder that the CNR/CPR railroads were managed to be built with gov't
funding back in the 1800s..even then there was a big fight in the gov't at the time whether Canada really needed this coast to coast railroad at all and whether it was worth the expense at the time. Pierre Berton's book, "The National Dream" sums it all up...it was a hard fought struggle both politically and physically in the construction in the Rockies.



> Or to put it another way ... what new and how can changes be made?
> There's a long history that includes the Avro Arrow specialists.


I would like to say that is one of the biggest gov't screwups in the history of Canada. 
There was a time for an all weather interceptor in the 1950s. Other countries need them too..including the US, which did not have it's own all weather intercept developed at the time to counter the Russian bomber invasion during the cold war period.

The funding for the pilot project (8 Arrows) and the technology to build them was available in Canada (Malton etc) at the time.
True, that Avro did have some problems with the totally redesigned Orenda engine with the 30,000 lb thrust needed from the afterburner (to get it to Mach 2+ (as per gov't specs at the time), but the bugs were being worked out when the funding was cut by "Dief the Chief" who didn't understand nor care about the impact to Canada's aircraft technology and instead opted for buying the piece of "cr*p" Bomarc interceptor missiles that were not very successful in the far north.



> In late summer 1959, the RCAF selected the Lockheed F-104 Starfighter as their new day fighter, to be built by Canadair. Orenda was given the contract to build its engines, the Canadian government having already obtained a production licence for the General Electric J79


The elite of the Avro project were offered employment with Boeing and McDonnell-Douglas, Lockheed and some even went with NASA.

Thus, we not only lost a technological part of our history and it's expertise in development, but the US benefited from our bad political decisions.
The Arrow project, inspite of the escalating development costs, was a bad political decision and there have been a few of them within various gov'ts. Not to say that management inside the companies involved were entirely blameless.


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## sags (May 15, 2010)

Our local newspaper regularly has articles highlighting the new tech industry moving into their spacious, well appointed "loft like" digs.

Lots of accolades all around from the company owners, the employees and the city. The trouble is none of them are making any money and they are living off government grants.

I also wonder how the tech industry breaks down in the US. They have a huge military spending complex that is feeding into high tech jobs..........again sponsored by the government.

The tech companies around here seem to be entirely focused on further development of advertising and marketing software and I have yet to hear of any that are actually building a product of any kind.


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## james4beach (Nov 15, 2012)

Eclectic12 said:


> A response to the article was a former Ontario resident who moved to California. His message was that the when all the costs were added up, he was basically in the same boat as when he lived/worked in Toronto.


I agree -- this describes exactly my situation. My US income appears higher and you'd think with the US exchange rate and higher salary that I'd be much better off.

But now with two years looking at the numbers, I see that I'm in the same boat here in the US as when I worked in Toronto. Down south I face higher taxes (this state has higher taxes than ON), higher cost of living, and accounting and tax complications. *On a net basis I was just as well off when I lived and worked in Toronto.*

And I would consider moving back to Toronto, if I could find well-paying work, which I couldn't find last time I looked. My peers are also telling me they can't find high tech work in Toronto. The only offer I got in my field (from Mississauga) was a much lower income.


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## james4beach (Nov 15, 2012)

sags said:


> I also wonder how the tech industry breaks down in the US. They have a huge military spending complex that is feeding into high tech jobs..........again sponsored by the government.


Very good point. The US government pumps a ton of money into science R&D, high tech, including grants and a huge range of funding. Canada doesn't have anything like this.

I personally benefit from this in my US job. Quite directly actually.


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## carverman (Nov 8, 2010)

james4beach said:


> Very good point. The US government pumps a ton of money into science R&D, high tech, including grants and a huge range of funding. Canada doesn't have anything like this.
> 
> I personally benefit from this in my US job. Quite directly actually.


This is the main difference between the US and Canada. The military-industrial complex in the US is a big employer, not to mention all the huge airplane companies like Boeing-McDonnel, Martin-Lockheed and slews of others. 

The high tech spinoffs from these giants employ probably hundreds of thousands more. Defence spending is a big part of their GDP and to maintain their position as world leader/policeman they have to continue development.

In Canada, what do we have in terms of defence spending?..very little. Our domain is mostly communications...and communication/e-commerce.
This is our speciality, and has been for a few years, in spite of the demise of the big players in the last 15 years.

Will we ever see that kind of growth like we saw in the 80s/90s before it all came crashing down? Perhaps, but in small isolated segments.
Unlike the 80s, when rotary dial was being replaced by digi-tone and then cell phones fuelling tremendous growth..these days with smart phones from Samsung/Apple and a host of other offshore companies offering their wares, it is a lot harder to break into these markets.

The best we can do is find another niche market...like the local Ottawa e-commerce "Shopify" and others.


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## james4beach (Nov 15, 2012)

Ottawa could invest heavily to rebuild a high-tech communications industry. Spread across Canada & US there are a ton of engineers with tremendous expertise, and this brain trust could be focused into an Ottawa-centered industry.

Not to mention associated industries we could master. We have the best cooling system available -- the great white north -- and almost limitless electricity in many parts of the country.

I think it would be great. A large focus like that, with significant capital investment by government, is far more useful than one off niche web sites and smrt phone apps.

Imagine a new breed of Canadian centered high tech and high speed communications. We could even run giant data centers in Quebec, Manitoba, etc with cheap electricity and free cooling. Imagine the possibilities here... and what a global brand that would be. The imagery writes itself.

Polar Data Cloud
Powered by the Canadian Arctic

All of this is possible! Let's say a nutty young guy like me wants to help make something like this happen... is there anything I can do? How do things like this begin? I'm young enough I can risk career suicide.


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> Eclectic12 said:
> 
> 
> > A response to the article was a former Ontario resident who moved to California. His message was that the when all the costs were added up, he was basically in the same boat as when he lived/worked in Toronto.
> ...


That comment was from almost twenty years ago (similar comment from a nurse who couldn't find work in Ontario, went to the US then when the employment situation improved in Ontario she said "they'd have to pay me the same as the top hospital administrator".

Basically without business leaders and gov't working together ... it seems that it will stay as a small bit here and a small bit there but nothing that is broadly sustaining.


Cheers


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## Pluto (Sep 12, 2013)

james4beach said:


> Polar Data Cloud
> Powered by the Canadian Arctic
> 
> All of this is possible! Let's say a nutty young guy like me wants to help make something like this happen... is there anything I can do? How do things like this begin? I'm young enough I can risk career suicide.


I don't know everything you would need, but one essential of success would be a sustainable competitive edge. Unfortunately, it seems the main competitive edge Canada relies on is a low dollar ( and when it goes to par, the customers tend to dry up.) As far as I can see it is too easy for competition to get into this (cloud)field.


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## carverman (Nov 8, 2010)

james4beach said:


> Ottawa could invest heavily to rebuild a high-tech communications industry. Spread across Canada & US there are a ton of engineers with tremendous expertise, and this brain trust could be focused into an Ottawa-centered industry.
> 
> Not to mention associated industries we could master. We have the best cooling system available -- the great white north -- and almost limitless electricity in many parts of the country.
> 
> ...


Pipe dreams. Where are the markets to justify this kind of investment? 
Secondly, you never want ANY gov't running a business. Too many screwups due to policy changes, funding cuts
and other geo-political issues that crop up. 

When they can't even manage themselves, how would we expect them to manage and run a viable profitable company? 
Just hand out gov't grants? That may not result in any new business.


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## sags (May 15, 2010)

Is there any reason Canada couldn't build communication satellites to provide low cost wireless coverage across Canada for consumers ?

Everything can be transmitted by satellite these days............television, radio, internet.

High tech jobs and lower consumer costs..............win/win.


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## fraser (May 15, 2010)

I spent many years in the IT sector. During that time I saw thousands of jobs leave Canada. Lots of call centre jobs, lots of software development jobs. Hardware manufacturing jobs, etc.

Much of it was driven by customers. Customers want more for less. So they offshore their call centres. Then they outsource operations to the lowest bidder who happens to be a company that is offshore. 

Not so many years ago I was involved in a multi man year bid for the development of software. We used our India based sub for most of the work. Why? The math was straightforward. An Indian resource had a fully loaded cost of 20K per man year of labour. The equivilant in Canada/US was $100K. You can imagine what those types of numbers did to the bid price....to the winning bid price. Project managed in Canada, delivered in Canada, with labour from India. The customer drove this bus based upon what their selection of best value.

Now India has become a little expensive. Database expertise is coming from Ukraine. Other services from China. Call centres from Costa Rica and Panama. One large ATM manufacturer sold off their manufacturing arm. They outsourced to a factory in Hungary.

Vancouver is having a challenge at the moment because of housing prices. Loosing people to areas like Portland because employees with a family can actually buy a home and have a better life for their families. 

There are lots of factors at play in this puzzle.


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## james4beach (Nov 15, 2012)

carverman said:


> Pipe dreams. Where are the markets to justify this kind of investment?
> Secondly, you never want ANY gov't running a business. Too many screwups due to policy changes, funding cuts
> and other geo-political issues that crop up.
> 
> ...


The government should not run it themselves. They should provide R&D funding. The US does huge amounts of this in the military space -- billions in annual funding.

If it works in the USA, home to capitalism & the free markets, why on earth would it not work in Canada?


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## carverman (Nov 8, 2010)

fraser said:


> I spent many years in the IT sector. During that time I saw thousands of jobs leave Canada. Lots of call centre jobs, lots of software development jobs. Hardware manufacturing jobs, etc. p


All good points you raised. Loss of manufacturing due to high labour costs + benefits is one reason. There are other reasons as well as local taxes on the facilities, high cost of insurance, and energy costs.

Ontario is pricing itself out of the manufacturing market for these reasons. The cost of electricity going up every few months is one factor, there are other factors that make it more attractive to do the manufacturing offshore, and do only the necessary R&D here because of the universities like Waterloo etc.

In today's global markets where the price point is everything, it's not hard to imagine that once gone, things never return
to the way they were before. 
Years ago, RFT employees that could be guaranteed employment for 15-25 years was the norm with Defined Benefit pensions and other benefits. 

Today it's mostly part time with contract work. Employees are hired for the duration of the contract, then
when the contract is over, they are out of a job. Others are strictly on part time basis so that the employers don't have to
pay them benefits or vacation day. 



> There are lots of factors at play in this puzzle.


Many factors mostly economic. However, infrastructure is one thing (at least for now), that gov'ts and municipalities can't farm out (at least not yet) to foreign sources. This may happen someday though...maybe that new road or bridge built could have Chinese, Japanese or even Russian equipment on site with contracted foreign construction workers as part of the deal to operate it because that piece of infrastructure can be built on a cheaper bid.

During the building of the transcontinental railroad in the 1800s, Chinese workers were imported to provide the labour because they could work so much cheaper than domestic. Don't think that this couldn't happen again.


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## Eclectic12 (Oct 20, 2010)

carverman said:


> ... Years ago, RFT employees that could be guaranteed employment for 15-25 years was *the norm with Defined Benefit pensions*
> and other benefits.


I am not sure this as as wide spread as people think. 

Some here have posted that the 80's were a hey day for DB pensions where the numbers I recall from Stats Canada listed only 47% to 43% or so of employees being covered by registered pensions in total (i.e. including DB and DC). It seems the DB pension are about 9% lower to be something like 38% through 35%. 


Cheers


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## Jaberwock (Aug 22, 2012)

The type of "high-tech" jobs you are talking about create very little spin-off of middle income jobs because all of the associated manufacturing is done off-shore, so all the "high-tech" IT engineer creates in this country is a well paid job for himself. And that job is in danger because it can be done by engineers in India or China and lower cost.

Compare that with a team of equally well trained geologists, mining engineers and metallurgists developing a resource. They spin-off enough well paid jobs to support a small town and those are jobs which have to stay where the resources are.

Canada would be better served if its governments recognized that fact, and spent its money supporting our resource industries instead of subsidizing so called high tech industries.


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## andrewf (Mar 1, 2010)

sags said:


> Is there any reason Canada couldn't build communication satellites to provide low cost wireless coverage across Canada for consumers ?
> 
> Everything can be transmitted by satellite these days............television, radio, internet.
> 
> High tech jobs and lower consumer costs..............win/win.


Let Google/SpaceX do it. They will do it for a fraction of the cost, without taxpayer subsidy and make it available before a government initiative could event get it off the drawing board.


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## james4beach (Nov 15, 2012)

Except you're wrong about that, SpaceX gets tons of US government money.

$5 billion in government subsidies for Space-X
http://www.latimes.com/business/la-fi-hy-musk-subsidies-20150531-story.html

NASA (i.e. the US government) has a contract with Space-X for $2.6 billion
http://qz.com/281619/what-it-took-f...frog-nasa-and-become-a-serious-space-company/

Those NASA contracts are government funding. They are not paying Space-X a "free market determined" fee ... this is public funding.

Canada has to get over this idea that government funding is anti-capitalist or bad for business. The USA beats our pants in government funding for industry and R&D. DARPA is close to a $3 billion budget, the cross-agency SBIR program is close to $3 billion, and there's even more pumped into Military and aerospace. And then there's funding of solar businesses. Then there's the US national labs... this is not small beans.

Personally I see most of these as contributing to American economic strength. It builds scientific expertise, becomes a hub for world experts, etc.

Great example: *I'm* in the US, contributing my technical expertise and brain power, due to project(s) that are mostly government funded. Wouldn't you say that the government-funded research helped the USA?


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## james4beach (Nov 15, 2012)

sags said:


> Is there any reason Canada couldn't build communication satellites to provide low cost wireless coverage across Canada for consumers ?


We had some satellite expertise growing in the Kitchener/Waterloo/Cambridge region: COM DEV. I have friends who work there.

Which was just acquired by Honeywell, a US conglomerate
http://www.therecord.com/news-story...urchase-of-cambridge-s-com-dev-international/

Maybe the critical thing we need to do is stop US acquisitions. Like with other examples in this region... DALSA for example... the US giant will gut the company.


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## carverman (Nov 8, 2010)

sags said:


> *Is there any reason Canada couldn't build communication satellites to provide low cost wireless coverage across Canada for consumers *?
> 
> Everything can be transmitted by satellite these days............television, radio, internet.
> 
> High tech jobs and lower consumer costs..............win/win.


I missed this post SAGS. 

Years ago, I used to work for Telesat Canada (early 1970s) before digital communications in Nortel. Back in 1970, Anik I and II, we didn't have the R&D expertise to put together a satellite to provide reliable service for 6-7 years in a space environment. Besides the spacecraft(s) themselves, the GCE, (ground control equipment and computers)had to be assembled in a system and verified they would work with EACH specific satellite.
Each satellite while similar in construction was unique where one was a BACKUP to the other, in case of unrecoverable
system failure. 
Hughes Aircraft in California was selected from tender to build the first two satellites as nobody in Canada, except those that worked on the Alloutte project had any real experience back then. 



> With no experience in building satellites, the progress of the DRTE team was slow and riddled with engineering problems. However, new technologies, such as transistors and solar cells became available during this period and helped make it possible to build a small, reliable spacecraft.
> 
> Contractors such as RCA and Spar Aerospace Limited produced their first space hardware products during Alouette's construction. Spar, for instance, developed a new "roll-up" antenna for the Canadian satellite, a product that was later used in many variations for American satellites.


The first two Hughes manufactured satellites (two axis - despun com antenna) lasted about 7 years until the batteries got weak and the hydraszine fuel (used for attitude corrections) ran out. By that time in the late 70s, RCA won the contract for the second generation 3 axis stabilized satellitellites with more power and more channels available. The contract was given to RCA in Montreal. While innovative,the RCA satellites had their own set of problems.

Telesat employs their own engineers and has always been innovative in ensuring that the next generation of communication satellites meet their needs and their customers needs.

*Next generation satellites (2016) LEO (Low Earth Orbit)*


> Telesat has contracted with Space Systems Loral (SSL) of Palo Alto, California, and Surrey Satellite Technology Limited (SSTL), an independent British company within the Airbus Defence & Space group, for the procurement of the prototypes. By drawing on the advanced technologies and expertise of these leading manufacturers, Telesat will test and demonstrate two distinct spacecraft in LEO, a key step in optimizing the design and performance of Telesat’s contemplated LEO constellation.





> “Telesat is proud of our long and distinguished record of satellite innovation, including technical breakthroughs that have enabled our customers to realize significant gains in broadband performance,” said Dave Wendling, Telesat’s Chief Technical Officer. “Our Anik F2 satellite was the first to provide Ka-band high throughput satellite capacity. We are now developing a global constellation of advanced, high throughput LEO satellites operating in Ka-band, which we believe will offer a number of important advantages for the global delivery of high capacity broadband services. The Telesat team looks forward to working with SSL and SSTL to validate and demonstrate key parameters of our contemplated next generation satellite network as well as with other technology partners as we move forward with our plans.”


So as you can read, SAGS, Canada does have some expertise to help with the engineering (Canadian Space Agency, Telesat and others) but production of these new generations is always a risky business,and it seems we prefer to have somebody else do the construction who can absorb any risks, and we help in the verification of "all systems go" before launch date.


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## Eclectic12 (Oct 20, 2010)

carverman said:


> ... I would like to say that is one of the biggest gov't screwups in the history of Canada ...
> True, that Avro did have some problems with the totally redesigned Orenda engine with the 30,000 lb thrust needed from the afterburner (to get it to Mach 2+ (as per gov't specs at the time), but the bugs were being worked out when the funding was cut by "Dief the Chief" who didn't understand nor care about the impact to Canada's aircraft technology and instead opted for buying the piece of "cr*p" Bomarc interceptor missiles that were not very successful in the far north.


Agreed it was a bad decision ... but the impact of US gov't actions as well as Dief being naive played large roles. The USAF wanted to order two squadrons of Arrows, which looked like the order would go through. Problem was Dief won where the US figured they could get everything for song. They were in the loop due to consultations at the gov't level. In addition, the technical data was known to the US as NASA as well as the USAF were called in several times to respond to disagreements between Avro and Canadian groups that were objecting based on old knowledge.

As for the "opted" to buy the missiles - I don't see how either gov't would have had a choice. When the Canadian gov't did not seem interested, the US pointed out that this would mean the missiles as well as SAGE stations would be along the Canadian border. Should a nuclear missile be shot down ... instead of the far North, any nuclear material would likely be falling on populated centers. The irony is that the Arrow had mostly fixed their issues where the missiles never did. Fuel could only be loaded something like twenty minutes before firing or the corrosive fuel would destroy the missile.

It also didn't help that that the Army, Navy chief of staff as well as the defense minister George Pearkes wanted it canceled (Pearkes was turned down several times). When it as cancelled, he would say the ballistic missile was the greater threat, and Canada purchased Bomarc "in lieu of more airplanes". Minutes from meetings two years later with the US where the US told Pearkes Canada would have to buy fighters to protect the West record how upset he was to realise what had been thrown away. 

There is also the strange attitude of the RCMP that there was no need to ferret out spies as manned fighter planes were obsolete. Meanwhile, the East German air force was getting weekly updates from the spies.




carverman said:


> ... The elite of the Avro project were offered employment with Boeing and McDonnell-Douglas, Lockheed and some even went with NASA.


From the descriptions as well as the drastic drop in the Canadian aerospace industry - it was far more than the elite.




carverman said:


> ... Unlike the 80s, when rotary dial was being replaced by digi-tone and then cell phones fuelling tremendous growth..these days with smart phones from Samsung/Apple and a host of other offshore companies offering their wares, it is a lot harder to break into these markets.
> 
> The best we can do is find another niche market...like the local Ottawa e-commerce "Shopify" and others.


*shrug* ... that's always been the justification. As long as no one is willing to try plus the gov't does nothing to help - it is a self-fulfilling prophecy that will limit what is done. 


Cheers


*PS*

If niche markets are all that is possible ... why are some proposing a redesigned Arrow instead of the F-35 Stealth Fighter?
http://news.nationalpost.com/news/c...d-as-alternative-to-f-35-stealth-fighter-jets
http://www.cbc.ca/news/politics/ottawa-accused-of-axing-avro-arrow-revival-too-soon-1.1233462


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## kcowan (Jul 1, 2010)

The most we can hope for are temporary leads in niche markets. Nortel is probably the biggest lesson. Many lessons in fact. But being viewed as an American company was an amazing factor in the demise of Nortel. 

RIM is more of management without vision (actually incorrect vision) hanging on too long.

Woulda shoulda coulda.


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## andrewf (Mar 1, 2010)

james4beach said:


> Except you're wrong about that, SpaceX gets tons of US government money.
> 
> $5 billion in government subsidies for Space-X
> http://www.latimes.com/business/la-fi-hy-musk-subsidies-20150531-story.html
> ...


SpaceX is the low cost provider of launch services. I guess you can argue that any time the government purchases goods or services it is a form of subsidy, but I think that is too broad. A subsidy is better defined as paying more than necessary (not the best price/value bid) for a good or service, or more than the utility obtained by the good/service.

Now, if SpaceX/Google launch a LEO satellite constellation to provide wireless internet, this would not be through government subsidies. It's not for nothing that Google bought a $1 billion stake in SpaceX.


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## Eclectic12 (Oct 20, 2010)

kcowan said:


> The most we can hope for are temporary leads in niche markets.


Only when we limit ourselves to it.




kcowan said:


> ... Nortel is probably the biggest lesson. Many lessons in fact. But being viewed as an American company was an amazing factor in the demise of Nortel.


How so?

From those I talked to ... overpaying on the hope to find a future tech that would give top spot was part of the problem. Having five groups working on essentially the same thing as competitive units instead of co-operation didn't help either.

Never mind the "who cares what is happening to the rest of our industry ... nothing will change for our orders" mentality.




kcowan said:


> ... RIM is more of management without vision (actually incorrect vision) hanging on too long.


They both seemed to be sure no one could erode their lead, all evidence to the contrary.


Cheers


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## carverman (Nov 8, 2010)

Eclectic12 said:


> Agreed it was a bad decision ... but the impact of US gov't actions as well as Dief being naive played large roles. The USAF wanted to order two squadrons of Arrows, which looked like the order would go through.
> 
> As for the "opted" to buy the missiles - I don't see how either gov't would have had a choice. When the Canadian gov't did not seem interested, the US pointed out that this would mean the missiles as well as SAGE stations would be along the Canadian border. Should a nuclear missile be shot down ... instead of the far North, any nuclear material would likely be falling on populated centers. The irony is that *the Arrow had mostly fixed their issues where the missiles never did. * Fuel could only be loaded something like twenty minutes before firing or the corrosive fuel would destroy the missile.


When I was still with Telesat in 1972 (Allan Park Ont , near Hanover) their tracking statiion, I remember working with a engineer who came from Churchill Mb, and had worked with the Bomarc Missle project. He described the numerous problems they encountered with missile launch, taking on board liquid fuel was just one of them. 

The biggest problem was their poor reliability..due to extreme cold experienced up there..
something that the designers (Boeing) of the onboard missile control systems engineers in California never considered.

and by the time these Bomarcs were deployed in the far north stations..the Soviet nuclear bomber threat had changed to ICBMs and the Bomarc was totally ineffective against these...obsolete..another big waste of gov't and taxpayers money!

The Bomarc:


> The US Army were deploying their own systems at the same time, and the two services fought constantly both in political circles and in the press. Development dragged on, and by the time it was ready for deployment in the late 1950s, the nuclear threat had moved from manned bombers to the intercontinental ballistic missile (ICBM), while the Army had successfully deployed their own system that filled any possible role in the 1960s, in spite of Air Force claims to the contrary.


http://www.thecanadianencyclopedia.ca/en/article/bomarc-missile-crisis/



> It also didn't help that that the Army, Navy chief of staff as well as the defense minister George Pearkes wanted it canceled (Pearkes was turned down several times. When it as cancelled, he would say the ballistic missile was the greater threat, and Canada purchased Bomarc "in lieu of more airplanes". Minutes from meetings two years later with the US where the US told Pearkes Canada would have to buy fighters to protect the West record how upset he was to realise what had been thrown away.





> During operational service, the Bomarcs were maintained on stand-by, on a 24-hour basis, but were never fired, a*lthough the squadron test-fired the missiles at Eglin AFB, Florida on annual winter retreats*.


The missiles seemed to work better in Florida, than in Churchill or North Bay ON. 

From the descriptions as well as the drastic drop in the Canadian aerospace industry - it was far more than the elite.
Yes, you are right. Thousands were unemployed after the Arrow project funding was cut by the Dief gov't and they also
wanted the (6 or 8 Arrow) prototypes scrapped and all drawings and tooling destroyed. 



> The decision immediately put 14,528 Avro employees, as well as nearly 15,000 other employees in the Avro supply chain of outside suppliers, out of work.[84] Declassified records show Avro management was caught unprepared by the suddenness of the announcement by the government; while executives were aware that the program was in jeopardy, they expected it to continue until the March review. It was widely believed during this lead-up to the review, the first Arrow Mk II, RL-206, would be prepared for an attempt at both world speed and altitude records



and sadly.. after MILLIONS of 1950s dollars spent..we don't even have ONE COMPLETE original ARROW to put in our avation museum in Ottawa. There is a small piece of a nose section I once saw at the Science and Technology museum, but I believe it might have been a mockup of the cockpit and there is a small scale model of one as well.



> *shrug* ... that's always been the justification. As long as no one is willing to try plus the gov't does nothing to help - it is a self-fulfilling prophecy that will limit what is done.


That is Canadian politics when it comes to military spending.


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## carverman (Nov 8, 2010)

Eclectic12 said:


> Only when we limit ourselves to it.
> 
> 
> 
> ...


I worked for Nortel from 1980 to 2002 when I retired. Nortel for a while was a great innovative company. Their digital telephony technology (for a while) was bar none, the best Canada had to offer.

In order for US Telcos to modernize their switching and outside plants (with cheap funding from the US gov't, I might add), Nortel had to set up a US subsidiary in Raleigh NC and in Richardson Texas (for cell phone base station technology).

This allowed the original Northern Telecom easier inroads into the US market..their prime markets as the Canadian market was only about 20 to 25% of their total market and at some point once Bell Canada modernized their crossbar switching offices..was the prime market for Nortel.

Unfortunately, their over expansion in the 90s as well as thrusting themselves into different market areas had a severe impact on their cash flow.

The corporate decision to assimilate Bay Networks (a second rate router company) for 9 billion USD in cash and stock trades was the* first nail in the coffin *that sealed it's end ..it was too much outlay based on a whim that US Telcos would
even be interested in that kind of router, and as the markets dried up between 1999 and 2008 (with the US recession *driving another nail in Nortel's "coffin" *for cash flow..it was too much. 

By then much of the purported 30,000? Nortel employees worldwide had been slowly purged. In Ontario alone there were division cuts with as much as 3000 employees from one division given their "walking papers in a given 3 month period, dictated by Ontario employment laws.

With no signs of economic recovery or return to profitability after 2000, the big stock sell off started, and their market cap shrank weekly.
In the end, approaching penny stock status, the Nortel stock was delisted from the TSE..once it's biggest stock traded.


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## Eclectic12 (Oct 20, 2010)

carverman said:


> ... Unfortunately, their over expansion in the 90s as well as thrusting themselves into different market areas had a severe impact on their cash flow.


Which is about management decisions and waste instead of "being an American company".
From what I recall of what the ex-Nortel manager said, three of the five groups working on the same thing were in Canada ... draining away cash that should have been available to help them adjust to the changed market.

With the constant pronouncements that their sales were immune to the slowdown - when the fall started, there was no reason for it to stop.



Cheers


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## carverman (Nov 8, 2010)

Eclectic12 said:


> Which is about management decisions and waste instead of "being an American company".
> From what I recall of what the ex-Nortel manager said, three of the five groups working on the same thing were in Canada ... draining away cash that should have been available to help them adjust to the changed market.
> 
> With the constant pronouncements that their sales were immune to the slowdown - when the fall started, there was no reason for it to stop.


There was a LOT of overlap. The new peripheral development teams were both in Raleigh and Ottawa. 
Not sure why that happened, perhaps there was no strategic planning on co-coordinating teams at the beginning development phase, so that each team knew what the other was doing. 

And usually It was during the integration testing phase when serious defects were discovered that required redesign much to the chagrin of the verification offices agreeing to use the new peripherals working off the main DMS switch and network.

The architecture hierarchy was complicated enough, but when bottlenecks introduced using the new peripherals, started to surface, by the rushed development and time to market for the Beta software loads, the new product full scale introduction was set back drastically impacting future sales.

By then the competition (Lucent/Ericksson and others) had proven workable technology, caught up, and eager to undercut if necessary on the bigger contracts, some of which Nortel lost due to the "grapevine" on their reputation for reliabilty
at that point.

Nortel was no longer in position to ...(as the CEO eluded in his many employee information sessions) " be willing to wrap each sale with dollar bills around it"..ie' deferred payments on installed equipment.

As well, their involvement in the British Telecom and Germany also drained a lot of revenue from sales to support the big development teams that were only targeting products for the EU markets.

In the end, with revenue from US sales drying up, the New PM fiasco, customers deciding not to deploy the bigger fibre optic gateways, because their current traffic did not require huge investment for the forseeable future..and just like a house of cards..it started to collapse.

Bad management decisions at CEO/boardroom level instead of listening to the frontline management that KNEW the business model resulted in the inevitable collapse.."Too big to Fail?"...well under the right economic conditions, there is no such thing as "Too big".


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## james4beach (Nov 15, 2012)

Israel is another country that heavily funds its technology sector... with apparently great results. (I believe Israeli high tech is also partially US funded)

Again I just don't see any fundamental reasons why Canada can't do the same as these other countries


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## carverman (Nov 8, 2010)

james4beach said:


> Israel is another country that heavily funds its technology sector... with apparently great results. (I believe Israeli high tech is also partially US funded)
> 
> Again I just don't see any fundamental reasons why Canada can't do the same as these other countries


Israel has a different style of gov't. A lot of high tech development (including their jet fighter) is done in Israel because they are supported partly by the US and being in the midst of hostile Arab countries, they have to take action when needed,
so a large part of their GDP is military spending.

Canada, OTOH, is more a nation of "peacekeepers" , and as you may already know, the 6 CF18's that were doing bombing missions on ISIS have since been recalled by the Trudeau gov't.
What is left is some just a few special forces personnel to train the Iraqis how to fight ISIS with some hope of success.

In Canada, the political climate negates any military spending (other than sustaining what we already have) and that prevents any new miltary technolgy 
from being developed here.
That US third generation fighter that the Conservative gov't were eager to buy is no longer on the table. Not only do we not need that kind of fighter but we simply can't afford it. 

I really can't see much high tech development expansion right now..most of it had gone to China/Korea and other places. We have some local pockets here in Ottawa, and perhaps Blackberry, but these are few and far between what we had in the nineties.


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## james4beach (Nov 15, 2012)

I didn't mean to say it has to be defence industry spending, just that government support for industries can work in general.


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## carverman (Nov 8, 2010)

james4beach said:


> I didn't mean to say it has to be defence industry spending, just that government support for industries can work in general.


You mean like Harper's Economic Action Plan? Tony Clement's million dollar gazebos in his Muskoka riding? :stupid:
I guess it got them a few votes to where it counted in their respective ridings to keep them elected.
Trudeau's Liberals aren't much better.

While there are research grants for universities to do technological research and hospital foundations to do medical research, what little gov't money is doled out is scarce, in most cases the gov't prefers to match what is collected in private donations.

It's a different climate here..literally, and in the economic sense. Getting seed money to start a company, especially high tech sector is very difficult from the gov'ts, and trying to get any low interest/long duration start up loans from the banks.. is even more difficult as you have to be established and profitable to even approach the banks.

It's not going to happen in Canada. Unlike the US where there are plenty of investors willing to take a chance and if necessary a huge writeoff on their taxes if the startup fails, in Canada, you have to practically go on the street, cap in hand and beg for any startup money. That's why we have so many subsidiaries of multinationals..foreign capital...that kind of investment gets industry going, not the gov'ts, which kick in taxpayers money only at the point when big players employing thousands of workers, threaten to pull out or go under to economic conditions...GM and Chrysler bailout is one example. Bombardier is another one of enjoying gov't bailouts.


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## kcowan (Jul 1, 2010)

Eclectic12 said:


> How so? (Nortel the American Company)
> 
> From those I talked to ... overpaying on the hope to find a future tech that would give top spot was part of the problem. Having five groups working on essentially the same thing as competitive units instead of co-operation didn't help either.


A buddy of mine took the job as CTO in Mississauga. Pretty soon he was moving to Nashville. Then they hired a new CEO. He had a personality that made Trump look shy. When he close down Nashville and moved HQ to Washington DC, the decision-making became erratic/political.

John Roth



The Star said:


> In any case, the real force behind Nortel’s demise — the reckless conduct of the C-suite administration headed by former Nortel CEO John Roth in the late 20th century — was not on trial. Roth emerged from the wreckage with more than $100 million in stock-option proceeds.


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## Eclectic12 (Oct 20, 2010)

kcowan said:


> A buddy of mine took the job as CTO in Mississauga. Pretty soon he was moving to Nashville. Then they hired a new CEO. He had a personality that made Trump look shy. When he close down Nashville and moved HQ to Washington DC, the decision-making became erratic/political.


Sounds like bad management versus something tied to the US arm ... which Roth set the tone for (i.e. executive see, executive do).


Cheers


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## james4beach (Nov 15, 2012)

carverman said:


> Companies like JDF-Uniphase, Nortel, Mitel, and others, just didn't plan for the lean years of high tech enterprise.
> 
> Will we ever see another high tech bubble in Ottawa?...highly unlikely...the momentum and the markets have changed


Well, the bubble came roaring back and probably caught a lot of people (including me) by surprise.

The Canadian tech sector is one of the best performing market sectors in recent years. XIT has a 7.72% annual return over 15 years and a ridiculous 14.76% annual return over 10 years.

Acquisitions are happening too. Mitel was just acquired by a private equity firm that's part foreign, part domestic ownership.


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## Longtimeago (Aug 8, 2018)

When someone from a small specialized field talks about a brain drain, what does it really mean? That a general brain drain is happening? I can remember people talking about brain drains as far back as the Avro Arrow as already mentioned. There is nothing new in that at all. I remember a friend of our family who moved from Avro after they scrapped the Arrow, to Boeing in California. I myself as a Sales Manager for a Canadian subsiduary of a large US company was offered a VP position with their UK subsiduary. 

I don't see any of it as a 'brain drain', it is simply business and in today's world, there are no national boundaries on where a job might be. Does anyone really think we are going to go back to 'Made in America' or 'Made in Canada' as a norm? Waving a Canadian Flag and talking about a country, any country as if it has anything to do with business is pointless.

Blackberry had it's 'day in the sun' and I have no doubt there were plenty of US engineers, programmers etc, who would have been more than happy to be 'drained' into Canada to work for them at that time. There is no sound business reason for anyone to assume that a certain place like Kitchener-Waterloo should somehow continue to be a hot bed of business.

Today's world continues to move faster and faster. Here today, gone tomorrow is the 'new normal'. Lamenting the past is a waste of time. Take a look at Canada's fastest growing companies today and see how many (If any) names you recognize. https://www.canadianbusiness.com/profit500/2017-ranking-p500/

What that tells me is that the person who is the most flexible and NOT confined in their experience to a very small market segment is the person who is in most demand and most likely to be able to continue to live and work in Canada if that is important to them. Too much specialization simply means you gotta go where the relevant jobs are, you don't get that choice.

One name on the list of the current fastest growing Canadian companies that I do recognize is Canada Goose. They make winter parkas if anyone hasn't heard of them. Their claim to fame? Being fashionable. by ignoring fashion. So of course, 'anyone who is anyone', has to have one. Now just how specialized do you think any of their people really needs to be? And how big do they need to be to be thriving? The days of the large corporations with thousands of employees are in the past. 

Canada ranks 2nd in Entrepreneurship in the world. Does that sound to anyone like we have a 'brain drain' going on? Or are our 'brainy' people simply living in today's world, not yesterday's world. https://www.cbc.ca/news/business/entrepreneurship-in-canada-ranks-2nd-in-world-report-says-1.3093290

As for MBAs 'destroying a perfectly good industry' james4beach, that's amusing. What makes any industry a 'perfectly good' one? If the world has passed it by and it is no longer profitable, it is no longer a perfectly good anything. It's a has been. ie. Blackberry, etc.


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## humble_pie (Jun 7, 2009)

Longtimeago said:


> When someone from a small specialized field talks about a brain drain, what does it really mean? ...
> 
> https://www.cbc.ca/news/business/entrepreneurship-in-canada-ranks-2nd-in-world-report-says-1.3093290




thankx for the post LTA & special thanks for the canadianbusiness list of the fab five hundred. The 500 fastest-growing profitable companies in canada.

all investors could benefit from perusing this list. Not for specific investment vehicles per se, but to get an idea of how the future looks.

the fab 500 list shows ontario still leading as successful enterprise incubator, quebec & BC following after. Prairie provinces, maritimes are lagging a bit though.

my takeaway from this list:

1. canada is clearly specializing in technology, light manufacturing & management services. This helps to drive home the reality that most heavy manufacturing - iron foundries, aluminum smelting - has long since moved to Asia. Fair enough. The world can get along sharing a business plan like that. 

2. the city of Detroit should send the above memo to donald trump. Detroit in its rebirth has gotten the message: heavy mfg is not coming back to the rust belt states. But trump is still stuck in 1960.

3. quebec's economy is booming. Philippe couillard's liberal government accelerated a switch into informaton tech, lite mfg & management services on a scale broad enough to erase the provincial deficit, in return for which stunning performance quebecers voted him out of office only 2 months ago.

i was tickled to see "Ferme Onésime Pouliot" of ile d'Orléans qc proudly occupying the No. 395 position on canada's most successful businesses list, with no less than 209 employees. What, i wondered, is an industrial or IT company doing in the middle of ile d'Orléans, arguably quebec's most picturesque, most historic & most bucolic farm region?

but it turns out that Pouliot Inc really is a farm. They grow & sell the famous ile d'orléans strawberries, raspberries & blueberries, whose exceptional & extra-sweet northern flavour can be attributed in part to intensely cold winters followed by brief, hot, sun-filled summers. 

how pouliot manages to pay 209 employees i do not know. Some may be seasonal harvesters. The business may include a packing/shipping service for other growers on the remote island. Possible related business divisions could include jam & frozen berry processing. All of these would require industrial buildings on the ancestral pouliot farm property ("we are the 7th generation of pouliot on this land" say the current scions of the clan) Certainly top restaurants as far away as new york city are willing to pay a premium for the fragile, delicious red berries orleannaises.

i'm aware of many other high-quality agriculturalists in quebec whose businesses are thriving; but for a farm to make it onto the list of canada's 500 most profitable growing businesses is amazing.


.


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## Eclectic12 (Oct 20, 2010)

Longtimeago said:


> ... As for MBAs 'destroying a perfectly good industry' james4beach, that's amusing. What makes any industry a 'perfectly good' one? If the world has passed it by and it is no longer profitable, it is no longer a perfectly good anything. It's a has been. ie. Blackberry, etc.


If the world has passed it by where it is no longer profitable - one wonders why the foreign owners decided to shut the plant down, skipping severance or any sort of payouts then the customers banded together to pay the employees to keep making the product. Not profitable should have meant they simply switched to a new supplier, right?


Cheers


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