Nortel - Hard to understand (or how Stephen Harper stands up for Finland.)

It's official, Nortel is done.

The Canadian tech giant has fallen, and its final gasp it balked on severance to laid-off employees and cut pensions. The shares will be de-listed, and as result, shareholders - many of whom are former employees - are unlikely to recieve a penny... but... luckily the company had $45M in loose change to ensure bonuses were paid to the executive team (one can only hope this was cash...and by cash, I mean cash, not cheques... direct deposit would be even better).

Successive executive teams have been a challenge for the company, and it was difficult to understand the CEO - who has declined any bonus beyond his $1.2M salary - who noted the bonuses were there to keep valuable employees and retain value.

Nonetheless, the hardest part to understand, was the federal government's refusal to provide loan guarrantees to the company beyond the $30M offered by EDC. If management was the problem, why not ask "WWOD?" (What Would Obama Do)

When Obama didn't like the management at a certain car company... poof - new CEO.

Still, only $30M appears to have been put on the table, and the Minister of Industry noted there were now other flagship technology entreprises in Canada, such as RIM... and Research in Motion.... and, uh, RIM. Oh, and also MITEL. Did we mention RIM?

Of course, as the Globe notes, the research investments alone from Nortel were about $1.8B a year (while RIM spends about $254M a year.) Research spending in Canada sit at about $34B a year but of that number, Canada already has among the lowest business investment in research ratios in the OECD and G7. It will likely go lower.

But the really, really, hard part to understand, was that in spite of the sizeable investment Nortel was making in Canada, the feds - who were only willing to offer $30M in short term loans to the Canadian company - have announced they will provide $300M in loan guarrantees to Nokia-Seimens to purchase $650M worth of Nortel....

In short, the feds won't help a Canadian company in trouble, but they will backstop a foriegn company to buy a Canadian company and subsidize another corporate headquarter move to outside Canada.

And before anynoe suggests the business is outdated, doomed to fail, and part of a dissappearing economy, I have two words: General Motors.

Stephen Harper, standing up for Finland.