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Canada Blocks Sale of Space Tech Company To US

Posted by kdawson on Sat Apr 12, 2008 03:00 PM
from the no-dice-eh dept.
Space Government News Technology
Dave Knott writes "The Canadian federal government has blocked the $1.3-billion sale of the space technology division of MacDonald, Dettwiler and Associates to Alliant Techsystems, a major US defense contractor. Industry Minister Jim Prentice is quoted as saying he is 'not satisfied' the sale will be a net benefit for Canada. MDA is Canada's leading developer of space-based technology, including the famous CanadArm and the recently installed space station robot Dextre."
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Frizzled writes "Part of the space shuttle crew's scheduled mission for this week is to assemble a massive robot which will 'rise like Frankenstein' from the shuttle's cargo bay. The robot, named Dextre, has 11-foot arms, a shoulder span of nearly 8 feet, a height of 12 feet, and was built by the Canadian Space Agency. 'Dextre can pivot at the waist, and has seven joints per arm. Its hands, or grippers, have built-in socket wrenches, cameras and lights. Only one arm is designed to move at a time to keep the robot stable and avoid a two-arm collision. The robot has no face or legs, and with its long arms certainly doesn't look human.'"
Submission: Canada Blocks Sale of Space Tech Company to U.S. by Anonymous Coward
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  • Suckers!

    Now we have maple syrup, caribou, ice hockey AND SPACE TECHNOLOGY!!

    • Re: (Score:2, Funny)

      by Anonymous Coward
      I say the Canadian Gov should use CanadArm brand new finger to show what they think of the deal to the US.

    • Re:Ha ha ha! (Score:5, Funny)

      by evil agent (918566) on Saturday April 12 2008, @03:16PM (#23048750)

      Damnit, why didn't you guys try this hard to keep Celine Dion, too?

      Oh, wait, I know why...

    • and the semiconductor and integrated defense are not far off!

      • Ok (Score:2, Insightful)

        by hey! (33014)
        Why?

        Why does Canada need to maintain sovereignty over a private company, in an era of free trade? Why not let the owners cash their chips in?

        The US doesn't block this kind of thing on sovereignty grounds -- although to be fair it may be because the current administration doesn't understand that US sovereignty has any geographic limits...

        • The US doesn't block this kind of thing on sovereignty grounds

          s/sovereignty/national security/

          The US blocks a hell of a lot more than you think.

        • Re:Ok (Score:5, Informative)

          by theshowmecanuck (703852) on Saturday April 12 2008, @05:49PM (#23049778) Journal

          The US doesn't block this kind of thing on sovereignty grounds -- although to be fair it may be because the current administration doesn't understand that US sovereignty has any geographic limits...

          I call bullshit. See what would happen if Lockheed Martin tried to build their new fighter planes in a different country. Or sell off their satellite division to another country. It would go over like a lead balloon in a wind storm. Of course that wouldn't happen, the U.S. would never let companies sell off that kind of technology to another country.

          Note that there is a historic sensitivity in Canada to selling off to other countries or otherwise dismantling high tech companies [wikipedia.org]. Especially when said companies that could place the country in a very competitive place, economically and in a technical sense. Canada severely shot itself in the foot before... the pain just subsided over the past decade or so.

            • Yeah and contrary to what a lot of folks in the U.S. think, Canada lost more jobs to the U.S. than the U.S. did to Canada when free trade came in. Jobs that moved to states like South Carolina and Arkansas, where the labour laws are more lax and the pay way less. Then they lost the jobs to Mexico. Mind you some jobs skipped going to America and went right to Mexico. And Canada lost a lot of control over their own oil and natural gas supply. So let Obama or Clinton cancel NAFTA if they get elected. Can

        • Re:Ok (Score:4, Informative)

          by gobbo (567674) <wrewrite@gmail . c om> on Saturday April 12 2008, @09:54PM (#23051228) Journal
          It`s not just about sovereignty, first of all, and it isn`t a strictly private company: the canadian taxpayer subsidized this program, something like a billion dollars (real numbers are unclear). We just don`t want to be ripped off.

          Considering that it`s the little friendly nation next door with a small military and tons of resources, yer damn right we should be worried about our sovereignty; we`re subject to a flood of media, business purchases, and political pressure by the elephant to the south. USA farts, we notice.

          One of the biggest threats to our sovereignty right now is surveillance by your institutional conspiracy theorists, the spooks. Selling off our surveillance tech won`t help.

  • Net benefit? (Score:4, Insightful)

    by Xelios (822510) on Saturday April 12 2008, @03:11PM (#23048706)
    How is the sale of a Canadian company to US interests ever a net benefit for Canada? I've lost track of the companies that used to be Canadian owned, even a part of Canada's national identity (Tim Hortons), that have been sold off to make a penny.

    • Re:Net benefit? (Score:5, Insightful)

      by ScrewMaster (602015) on Saturday April 12 2008, @03:21PM (#23048774)
      How is the sale of a Canadian company to US interests ever a net benefit for Canada? I've lost track of the companies that used to be Canadian owned, even a part of Canada's national identity (Tim Hortons), that have been sold off to make a penny.

      Don't feel bad. We can make the same claim, like this:

      How is the sale of an American company to Chinese interests ever a net benefit for the U.S.? I've lost track of the companies that used to be U.S.-owned, even a part of America's national identity, that have been sold off to make a penny.

      • Re: (Score:2, Insightful)

        by mysidia (191772)

        One possible reason: because they paid a lot of money to US shareholders for that wasn't worth that much? I.E. Net inflow of cash exceeds the value of what was purchased.

        Now the proceeds from the sale can be used to invest in other interests.

        Or in the case of mergers: the merging was presumably done because it was in the companies' shareholders best interests.

        There are shareholders are in the US. Increased profits to shareholders is a benefit to the US-based shareholders. And to the US govern

        • Or in the case of mergers: the merging was presumably done because it was in the companies' shareholders best interests.

          ... or in the personal best interests of the board of directors and their buddies at the banks and underwriters doing the deal, leaving the shareholders with a cropper ...

    • Re:Net benefit? (Score:5, Informative)

      by Ctrl-Z (28806) <tim@timcolema n . c om> on Saturday April 12 2008, @03:50PM (#23048958) Homepage Journal

      ...even a part of Canada's national identity (Tim Hortons)...
      Huh? [wikipedia.org]

    • Re: (Score:3, Interesting)

      by FooAtWFU (699187)

      How is the sale of a Canadian company to US interests ever a net benefit for Canada?

      Why exactly should it have to be a net benefit for anyone except McDonald, Dettwiler, and their associates (i.e. whoever the owners of the company may happen to be)? What right exactly does the government have to stop a sale like that? Is "ownership" one of those American concepts like "free speech" that the Canadians don't care for these days?

      • Re: (Score:2, Informative)

        by Anonymous Coward

        I believe federal regulations require any sale about $295mil to foreign entities be approved. A similar mechanism is likely in place south of the border (e.g., IBM sale to Lenovo, US ports sale to Dubai Inc(?)). It would be foolish to not analyse very large sales to foreign countries.

        MDA was/is heavily subsidized by the government.

        MDA owns/controls RADARSAT II which surveys the north which is a contentious issue. Transferring ownership could have massive future implications for land or waterway claims esp

          • Re: (Score:3, Informative)

            by pokerdad (1124121)

            Please tell me you have your tongue planted firmly in your cheek when you say that a beer brewery, a donut shop chain and a hockey team are part of Canada's national identity.

            I wish that were true, especially in light of the fact that some of the companies I mentioned became part of our "national identity" basically through telling us that they were. Here's a break down...

            • Laura Secord - a chocolate company; its sale to the US was largely considered an outrage because the founder choose to name his company after the girl whose actions saved (the british colonies of) Canada from invasion by the US in 1812.
            • Molson - a beer company; there are some legitamate reasons why it mi
    • Lately, with the crash of the US Dollar, Canadians are buying up US companies. So it was surprising that this deal was still on the table. Of course, being aerospace/defence related, it is heavily 'subsidized' by government contracts, so selling an asset that was built up with tax payer money to the US would be rather silly for Canada.
    • The benefit is in the money paid for them, as well as the fact that ability to run a company is not dependent on where you live. Americans can run companies just as well as Canadians, and this deal would have benefited Canada to the tune of 1.3 billion minus the summation of future revenues of the company divided by (1+r)^t
    • I think Hudson's Bay Company would have been a better example than Tim Hortons ... :)

      • Re:Net benefit? (Score:5, Funny)

        by tomhudson (43916) <hudson@nOspAM.videotron.ca> on Saturday April 12 2008, @04:13PM (#23049128) Homepage Journal

        Well, this is the Harper government. They would probably consider the sale of entire provinces to be a net benefit for Canada simply because it might make the US happy.

        Depends on the province. The ROC (Rest of Canada) would probably vote to sell Quebec to the US, but the US already has too many people who "refuse to speak english like God intended them to." Besides, Americans are still pissed off about our tricking them into taking Celine Dion.

  • Real Reason (Score:5, Insightful)

    by ArIck (203) on Saturday April 12 2008, @03:21PM (#23048780)
    This was the 'real' reason for lack of sale:

    We at Canada have a policy of selling any weapons to rogue states. That is why when everyone was busy selling arms to states at war we Canada stayed at the fringes. Now, we believe the actions of the US government and its policies are detrimental to the democratic progress. We believe they could either lead to external aggression (most likely) and internal repression. Thus the Canadian government has decided not to sell the space technology to the United States.

    P.S: US please dont take this seriously, we still love you, eh.
    • Would a rogue state has a cache of nuclear weapons at its disposal? Would they have a leader who acquired his mantle against the will of the people and assumes all power, all the while actual elected officials are powerless to stop? Do rogue states invade soverign countries for no particular reason and overthrow their government?

      You show me a country with those qualifications and I'll show you a rogue state!

      -1 flamebait, +2 insightful, +1 funny... take that mod!

    • Re:Real Reason (Score:5, Funny)

      by shma (863063) on Saturday April 12 2008, @04:06PM (#23049080)
      Just think of the damage the US could do with the Canadarm. That's right... GIANT WEDGIES FROM SPACE!

    • I would say the regulatory folks in Canada are afraid of losing something of irreplacable tactical value to the country. A company developing valuable space technology.

      Canadians' fears are probably well-founded that they may lose both the company and access to the technology if they allow the company to sell itself. The company's HQ will probably move to the US, their technology will be made secret/classified, and their target market will become: the US government, instead of the former market wh

  • Well, they had a tin ear for public relations... (Score:5, Insightful)

    by rbrander (73222) on Saturday April 12 2008, @03:27PM (#23048798) Homepage
    Except for the one valid complaint that the government had helped this company along with a lot of support, I don't think anybody's even pretending that this is a justified intervention in the free market. (Whether Canadians have ever bought a US company that previously received lots of US government grants, contracts and other support, would be interesting; I'd be surprised if it *hadn't* happened, though).

    But alas, it was tin-eared in the extreme to announce this just as Dextre was being installed and everybody's nationalistic pride in the company was at a peak. We've been smiling with pride every time a shuttle image showed the flag and name on the CanadArm for 20 years or so; and Dextre, another order of magnitude more impressive a technology, had us all rubbing our hands with pride and glee.

    Then the owners do their best to give everybody an image of them saying "Thanks for the free help, suckers! We're selling out and off to Brazil with your cash!" This result was then predictable.

    If they'd waited a year or two, perhaps couched it in terms of allowing the company to go on to greater achievements through partnering, maybe tossed out a few promises of continued location in Canada and all Canadian jobs totally safe (promises you can always break a few years later, it's not like PR is legally binding), they could have gotten away with it.

    Now, they can't wait a few years and try again because the issue's been raised and the media will hype it up again unless they wait at least 10 years. And this was, by the way, our *Conservative*, pro-business party. Any chance of a future Liberal government allowing this one is much dimmer still.

    • Re:Well, they had a tin ear for public relations.. (Score:5, Insightful)

      by Anonymous Coward on Saturday April 12 2008, @03:53PM (#23048980)
      The issue is not with Dextre or the CanadArm. The issue is with Radarsat 2, which contains sensitive technology which is used by the Government of Canada to monitor and assert our claims of sovereignty over the Arctic.

      Claims which the Government of the U.S. doesn't recognize. The fear is that if the technology and control of the tech is sold to a U.S. company, the U.S. government will be able to control what the Canadian Government sees - allowing, for instance, U.S. warships to use the Northwest Passage without informing the Government of Canada.

      It has very little to do with nationalistic pride, and more to do with national security. Ask yourself, would the U.S. Government allow a company that developed and operates the spy-satelite network to be sold to a foreign power? It would never happen. Hell, you can't even export anything that uses encryption in the U.S. - which you can do in Canada.

      • Re:Well, they had a tin ear for public relations.. (Score:5, Interesting)

        by JohnWiney (656829) on Saturday April 12 2008, @04:35PM (#23049298)
        There is a bunch more to this, which never seems to make the press coverage. Radarsat2 was originally to have been a US-Canada partnership. But then the US realized that it would provide the kind of coverage of the US that the US now has of other countries - something it decided was unacceptable. The US withdrew, refused to supply some key components, and refused to provide the launch. The satellite was redesigned to use alternate components, and launched on a European rocket. So now the US is trying an alternate approach to recovering control of the situation.

      • Re:Well, they had a tin ear for public relations.. (Score:4, Informative)

        by tomduck (897600) on Saturday April 12 2008, @06:06PM (#23049884) Homepage
        There's more.

        The construction of Radarsat II was mostly funded by Canadian taxpayers through the Canadian Space Agency and gifted to MDA. The financial details are given at http://www.space.gc.ca/asc/eng/resources/publications/rpp-2008-annexes.asp [space.gc.ca]. It is not chump change we are talking about: $421.6M (expected).

        MDA is the 800 lb gorilla in the Canadian space industry. In addition to building the Radarsats, Canadarm and Dextre, MDA also built the MET station and lidar (laser radar) system that is on the Phoenix Mars Scout which will land on Mars this May 25. Losing MDA would be akin to the US losing Lockheed Martin. It could quite possibly destabilize the whole Canadian space industry, and so the Government was right to intervene.

        Of course, there are reasons why a sale was made in the first place. The Canadian Space Agency's budget has been stagnant for years, and this has had a big impact on MDA. Hopefully the Government steps up and reinvests in Canada's space industry again given that they prevented the sale alternative.

        • Just because US/Canadian interests have coincided for many, many years doesn't mean the will always coincide, and I wouldn't want Canadians blindly trusting in the goodwill of the United States any more than I'd want the US to trust the national defense interests of Canada. Nations do not have friends and nations do not "like." If nothing else, it introduces a whole other country outside of your control that's privy to things you don't advertise. That's something that should always be approached warily.
        • Absolutely. The U.S. disputes Canadian sovereingty in the high arctic. The U.S. also disputes Canadian sovereignty over national resources like oil and softwood lumber. Taking our raw resources without letting us cut trees into lumber or refine the oil ourselves (and the associated jobs) is not a good indication the U.S. 'likes you guys' as much as they 'like your resources'. Heck, you even want Canadian freshwater for frig's sake. Open up NAFTA. Go ahead. See what happens when you actually have to bid on that oil. Remember AVRO? Of course you don't. So here's the fear: a U.S. company gets ownership of Radarsat2, and the U.S. government prevents them from selling real-time images of the high north that show U.S. boats navigating the northwest passage or otherwise violating what Canada considers to be sovereign territory (territory, by the way, that the US also considered to Canadian-sovereign until the probability of large oil and other reserves became evident). Countries don't have friends, as we are so often told by your diplomats, they have interests. Selling Radarsat-2 is clearly not in our interest. Also, selling a finished, successfully launched and proven technology paid for by Canadian taxpayers in a finished form that is literally just coming online (and about to pay dividends) makes no sense at all.

    • rbrander wrote: Except for the one valid complaint that the government had helped this company along with a lot of support, I don't think anybody's even pretending that this is a justified intervention in the free market.

      It's far more likely they're concerned with what the said they were concerned about, the Radarsat-2. The Globe and Mail business section [reportonbusiness.com] said today In mid-March, the tide turned, and questions about whether U.S. security laws would give that country control of satellite data about Cana

    • I call b.s. This isn't just a publicity problem, this is a real-politik problem.

      This is about arctic sovereignty and billions in future tax revenue. This isn't a political issue. No political party has ever turned down the prospect of future tax base.

      RADARSAT II, which the americans pointedly refused to launch, is what we use to patrol our artic waters. Giving the Americans, the keys, the plans, and the ability to just delay things to death is beyond stupid from a strategic perspective.

      • The intervention is entirely justified under the Investment Canada Act of 1985

        It seems that you are unable to distinguish between legality and justification.

        This intervention is a theft from the shareholders of the company in question.

        -jcr

  • canadas on strike (Score:3)

    by drfrog (145882) on Saturday April 12 2008, @03:28PM (#23048816) Homepage
    no doubt aboot it

  • So I guess that means (Score:3, Funny)

    by sokoban (142301) on Saturday April 12 2008, @03:44PM (#23048916) Homepage
    They're not our fwiends, buddy.

  • divergence of interest... (Score:5, Insightful)

    by anon mouse-cow-aard (443646) on Saturday April 12 2008, @04:00PM (#23049036) Journal
    Forget that this is precious high technology that can, and has had spin-offs in the past.
    Forget that Canada produced the world's first digital telecommunications satellite. Forget all the jobs and knowledge that will gradually melt south of the border. forget it.

    It's much more basic than that. There is a long-time border dispute with the americans, we think the waters between arctic islands are Canadian waters, the US claims they aren't. The Americans have nuclear submarines, we don't. Now with the ice melting, http://www.canada.com/montrealgazette/news/story.html?id=8df15e06-e40d-42da-b42e-61c0d0713260 [canada.com]

    there is a navigable channel shaping up that could take weeks off the time to ship from asia to europe. and there's oil up there, http://cernigsnewshog.blogspot.com/2006/01/arctic-circle-canadas-not-kidding.html [blogspot.com]
    too.

    One of the main uses of RADARSAT for Canada is to replace aerial reconnaissance for Ice forecasting. they can, I imagine, spot submarines as well, since the Americans, supposedly our closest ally, refused to launch them. So they were launched on Russian vehicles.

    http://answers.yahoo.com/question/index?qid=20071025164751AAOF6Ur [yahoo.com]

    http://www.studentsonice.com/blog/?p=79 [studentsonice.com]

    We like our arctic, it is ours. We'd like the tax revenue from any oil that is pumped out of there. we'd like the revenue from a major shipping lane, so declaring it international waters is a problem for us. We can't afford to build nuclear submarines...

    So it would be pretty @#%$@^%@ stupid to sell this company to a US arms manufacturer, which is, at the very least, clearly beholden to the US government for contracting.

  • It's not over yet (Score:5, Informative)

    by hyades1 (1149581) <hyades1@hotmail.com> on Saturday April 12 2008, @04:48PM (#23049386)
    They get to take another kick at selling out in 30 days, when they report back to the Minister. If the press hadn't got hold of this, it would already be a done deal.
    • Well, if it were that simple we'd be moving companies to every frikkin' place we see opportunity, wouldn't we? Companies need regulatory approval before they can merge. This is more strictly so if they are defense contractors because you don't want other countries knowing your military secrets.

      Heck, Google and DoubleClick needed approval from both US and EU Regulatory authorities before they could merge. That's because even though they are US based countries, they operate all around the world.

    • No, it's not the company's choice. They've received a LOT of funding from the Canadian government, as did their predecessor.

      It's the same as the sale of US ports to outsiders.

    • We don't have companies in the US that can make these?

      We did, but we sold them to the Chinese.

    • Because even the US doesn't have infinite funds, so when they went begging for help with the shuttle, Canada said, just like Americans would: sure, we'll help, but we want the economic benefits at home. so we built the arm as our contribution to the shuttle program, and now dextre as our main contribution to the space station.
    • My favourite line from the show MASH was when Hawkeye announced he was a 'reformed druid'... "I worship bushes." I don't know how it slipped past the censors of the day.... probably too sly for their narrow imagination. :D I laughed my ass off.

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