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Canada Blocks Sale of Space Tech Company To US 230

Posted by kdawson
from the no-dice-eh dept.
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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Canada Blocks Sale of Space Tech Company To US

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  • Ha ha ha! (Score:5, Funny)

    by Van Cutter Romney (973766) <sriram DOT venka ... geemail DOT com> on Saturday April 12, 2008 @04:04PM (#23048652)
    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.
    • by evil agent (918566) on Saturday April 12, 2008 @04:16PM (#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!
  • Net benefit? (Score:4, Insightful)

    by Xelios (822510) on Saturday April 12, 2008 @04:11PM (#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 @04:21PM (#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

        • by tomhudson (43916)

          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 ...

          • 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 ...

            How is that relevant. Why should it matter what someone with a 1% stake in the company thinks? If enough people have controlling shares of the company and they vote to do something, that's what gets done. Kinda like our elections. The candidate with the most votes gets elected. (Yeah, queue Bush jokes and Florida jokes).

            What business
            • by tomhudson (43916)

              The directors are supposed to act in the best interests of ALL the shareholders, not just their buddies who stand to make money from all sorts of fees.

              • The directors are supposed to act in the best interests of ALL the shareholders, not just their buddies who stand to make money from all sorts of fees.

                Put two people in a room and eventually you'll have a disagreement. When a lot of people disagree, the board holds vote--and people vote with their shares. People vote with how much money they have invested in the company. Then the board goes with whatever the majority of stockholders wants.

                Now that's not how it always works--but if you feel you've be
                • It's a cultural thing...

                  Put a box on the counter with candy bars and a sign "take a candy bar, leave a dollar". It works fine-- the candy bars are cheaper-- someone doesn't have to be physically present to sell them-- until the culture breaks down.

                  Once people think it is okay to steal the candy bars then they are $1.50, you can only buy them when someone is there (or the machine is full).

                  Boards of directors are like that. The board and the executive class in general used to take care of everyone to some e
    • Re:Net benefit? (Score:5, Informative)

      by Ctrl-Z (28806) <`tim' `at' `timcoleman.com'> on Saturday April 12, 2008 @04:50PM (#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
      • by pokerdad (1124121)

        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?

        Sorry to disappoint you, but the rights of our government are not limited by the American Constitution.

        First of all, "free speech" in the American sense of the word has never existed here. Second, the Canadian government, being much more socialist than the American, has long taken an active hand in influencing the economy, and despite your retorical question, it has every right to do so.

        I realize to you these are likely huge reasons to think Canada is an awful place, but we are a democracy and its wha

        • by SkyDude (919251)

          there have been companys sold the the US in the past decade and a half that through either their history or targeted marketing had become part of our national identity; Molson....Tim Hortons and the Montreal Canadians are just a few of them.

          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.

          If it weren't for the XM radio comedy channel that features recordings from Canadian comedy clubs, I'd never know that Tim Horton's was a donut chain - that is until one opened up about fifteen miles from my home.

          • 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.
    • by HUADPE (903765)
      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
    • by B3ryllium (571199)
      I think Hudson's Bay Company would have been a better example than Tim Hortons ... :)
    • True free trade is generally a net benefit to both parties. Of course, we're nowhere near true free trade and the U.S. federal and state governments seem to have no problem with protectionist policies when it suits there needs (political, defense, or otherwise).
    • by icepick72 (834363)
      Ya, if we had kept full control of Tim Hortons we would now have space donuts. If we get rid of the space division of MacDonald, Dettwiler and Associates we'll have space nothing.
  • Real Reason (Score:5, Insightful)

    by ArIck (203) on Saturday April 12, 2008 @04:21PM (#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!
    • by shma (863063) on Saturday April 12, 2008 @05:06PM (#23049080)
      Just think of the damage the US could do with the Canadarm. That's right... GIANT WEDGIES FROM SPACE!
    • by mysidia (191772)

      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

  • by rbrander (73222) on Saturday April 12, 2008 @04:27PM (#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.
    • by Anonymous Coward on Saturday April 12, 2008 @04:53PM (#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.
      • by JohnWiney (656829) on Saturday April 12, 2008 @05:35PM (#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.
      • by wigaloo (897600) on Saturday April 12, 2008 @07:06PM (#23049884)
        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.

    • 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

    • by anon mouse-cow-aard (443646) on Saturday April 12, 2008 @05:06PM (#23049078) Journal
      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.

  • by drfrog (145882) on Saturday April 12, 2008 @04:28PM (#23048816) Homepage
    no doubt aboot it
  • by sokoban (142301) on Saturday April 12, 2008 @04:44PM (#23048916) Homepage
    They're not our fwiends, buddy.

  • by anon mouse-cow-aard (443646) on Saturday April 12, 2008 @05:00PM (#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.
    • by Pig Hogger (10379)

      We can't afford to build nuclear submarines...

      Oh yes we can buy some... 20 years ago, Canada went shopping for nuclear subs. Trouble is, the only possible choices were american, with strings attached (every US-made weapon system comes with strings attached), british (US license with US strings attached) and french, the latest without any strings attached (every french-made weapon system comes with no strings attached, hence the extreme popularity of french weapons. Ask the Royal Navy how the like Exocet

      • given how english Canada hates the french, it would have been political suicide to buy french submarines

        You have got to be kidding me. The British have a long history of hating the French; the Americans seem to think that even speaking the language a mark against a candidate for president. But Canadians? Meh. Rude jokes about French manliness, courage, etc. don't fly here they way they do in other English-speaking countries. We don't care a whole lot about France one way or the other. (That inclu

        • by Pig Hogger (10379)
          So said by a starry-eyed british-columbian (you're from there, right?) who has **NO IDEA** of the continuous constitutional encroachment by the federal government, who doesn't have a foreign language, foreign laws, foreign customs shoved down his throat constantly, who doesn't have his economic interests quashed in favour of english canada, and so on, and so on...
      • by Sara Chan (138144)

        Ask the Royal Navy how the[y] like Exocet missiles after the Falklands war...

        You appear to be misinformed. The Exocet missiles took out a British ship. Thatcher then called up Mitterrand and asked for the electronic "keys" to disable the Exocets. Mitterrand at first refused. Thatcher replied that Britain was going to win the war, and without the keys, the only way would be to go nuclear. Mitterrand had a choice: give Britain the keys or have Britain use nuclear weapons....

        That is why the Exocets n

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

    by hyades1 (1149581) <hyades1@hotmail.com> on Saturday April 12, 2008 @05:48PM (#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.
    • Not really. It's been under review and mentioned repeatedly in the house over the last month. The deadline for response by the Industry Minister (there were earlier review phases) was at earliest next week, I believe -- and the early answer suggests that Alliant's bid isn't even close to being satisfactory.

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