Thursday, July 23, 2009

Nortel isn't the Arrow

Months after Nortel declared bankruptcy, the company was returned to the spotlight after a last-minute attempt by RIM to acquire Nortel’s wireless division. The Star is comparing this to the demise of another Canadian legend, the Avro Arrow.

A quick Canadian history lesson: soon after the Second World War Canada set out to build a long-range, supersonic fighter to defend the northern frontier from Soviet bombers. This was thought to be impossible: jet engines were too primitive, materials were too heavy, and too little was known about supersonic flight. Defying the odds, Fred Smye led a team at Avro Canada to build and test a beautiful plane that would have achieved all this and more - the Arrow ( video ).

Soon after, Prime Minister John Diefenbaker canceled the program putting 50,000 Canadians out of work. The received history is that Diefenbaker canceled the program under pressure from the United States. At the time, he simply claimed that it was a waste of money. Whatever his reasons, this decision put Diefenbaker into the pantheon of hated Canadian leaders. The program remains a sad reminder to many Canadians of what might have been had Canada pushed on and maintained a more independent defense policy.

Avro was a national project that developed world-leading technologies against impossible odds. Nortel, at the end was a mediocre hardware company destroyed by bad technology bets (CDMA) and terrible accounting. Avro employed engineers with highly specialized skills that weren’t readily used outside of cutting edge aerospace. Many of them went on to work on the Apollo program. Nortel employs software, hardware, and product professionals whose skills can be used all across the economy. Funding Avro would have pushed the frontier of science. Rescuing Nortel would have just thrown good money after bad. We've done enough of that already.

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