1. Knightcrawler's Avatar
    Why won't the Harper Government Help BlackBerry?

    Saw this article today, and i thought it raised some interesting points. I don't agree one way or the other, mainly because i don't know how either scenario would play out, and if it'll end up being a help at all. What do you guys think? Should the Canadian Govt step in? Should they not? What makes BB so special?

    All through BlackBerry’s long, slow death spiral — for there can be little doubt now that that is what it is — the Harper government has been at pains to make clear it would not step in to save it. The Industry minister’s most recent intervention on the subject was limited to wishing it all the best while expressing the hope it can “make it on its own.”

    This is all to the good. Nothing can save BlackBerry now, and nothing should. The company had a great run in one of the world’s most competitive industries, an industry it in no small part created. But it became a victim of its own success, too complacent, too slow to innovate, too little focused on the emerging consumer market while it tended to its corporate client base.

    As of now, its market value is essentially the sum of its patents, its cash, and its inventory of unsold smartphones. The business itself is worth nothing. The best thing the government can do for its shareholders and employees is to waive the usual murky “net benefit” test and allow the company to be sold, in whole or in part, to whichever buyer, domestic or foreign, thinks they can create some value out of it.

    The reason we should wish to let BlackBerry fall, either to foreigners or to bankruptcy, is precisely to create the conditions for future BlackBerrys to rise. The companies that last — so far as any company can — are those that stick ferociously to meeting, or indeed anticipating, consumer wants. Competition and the fear of failure tend to sharpen that instinct; protection, subsidies and bailouts do the opposite. The company that created the BlackBerry didn’t emerge from some sheltered workshop of the state, but from the talents and vision of its two co-founders. By the time governments started “investing” in it, some years ago, it was probably already over.

    By and large, the public seems to get this; if the Harper government is reluctant to get involved, it may be because no one is asking them to. (Even the NDP has so far restrained itself: its response to Friday’s announcement of 4,500 job cuts worldwide was confined to a brief release calling on the government “to make sure that affected workers are helped through this difficult time.”) The kind of economic nationalism that focuses on creating a few “national champions” in “strategic sectors” seems to be waning in its appeal: witness the telcos’ failed attempt to whip up opposition to Verizon. People may still get misty-eyed over the natural resource sector, but where their own dollars, rather than someone else’s, are involved, a certain realism sets in.

    That BlackBerry is in the fabled “high-tech” sector may in fact have sealed the deal. People can see how competitive these industries are, how quickly companies rise and fall, and they can see how much the consumer has gained from this, with better products at lower prices coming on stream every year. Perhaps if the company were still on top, and an outsider proposed to buy it, the old protective impulses might have kicked in. But a failing company is more likely to be seen as deserving to, and its foreign purchaser more a saviour than a threat.

    All right, then, for whatever reason the Harper government looks unlikely to intervene. Perhaps it will even offer some explanation along the lines above: competition, consumer choice, profit and loss, may the best company win. To which the only appropriate response the rest of us can offer is: huh?

    If failing companies should be allowed to fail, if businesses should live or die based on their ability to persuade people to pay for their products, rather than to get the government to force them to pay, well, why has this government been so shy about applying this principle until now?

    This is the same government that not only bailed out the auto companies at the height of the financial crisis, but several times before and since, the most recent infusion of public cash coming just this week, at Ford’s plant in Oakville, Ont., complete with the usual glitzy ceremony.

    This is the same government that provides all sorts of special tax breaks for favoured industries, as we were reminded, again this week, with the extension of the accelerated capital cost allowance for manufacturers. This is the same government that props up failing Crown corporations like Canada Post, to no one’s benefit including Canada Post’s, as we were also reminded this week via a scalding piece by the corporation’s former CEO, Michael Warren.

    This is the same government that sends ministers fanning out across the country at regular intervals to boast of the subsidies they are handing out, whose “grants and contributions” to business fill several hundred pages of the Public Accounts each year, that seems unwilling to rest until it has underwritten every firm, industry, trade association, snowmobiling club and bar mitzvah in the country.

    This is the same government that issued a press release “reaffirming” — why yes, it was just this week, now that you mention it — it was spending $50-million on a Venture Capital Action Plan (VCAP), to “help create a vibrant private sector-led venture capital system in Canada.” That’s right: it’s official government policy to subsidize venture capital funds.

    So: why them, and not BlackBerry? What was so special about these firms that opened the treasury’s vaults to them, where it was closed to BlackBerry? Why is their inability to succeed without subsidy an argument in its favour, rather than against? What they got that BlackBerry ain’t got?

    Copyright (c) Postmedia News

    Original source article: Why won’t the Harper government help BlackBerry?
    09-22-13 11:40 AM
  2. Roo Zilla's Avatar
    How should the government help them? With a bailout? They don't need one. They have $2.6B in cash and no debt. Should they pass a law requiring every Canadian to buy BlackBerries? Should they subsidize the cost of BlackBerries similar to the way the US subsidizes farmers, pay BlackBerry to destroy phones they can't sell? Should they make trade agreements with other countries promising trade concessions if they buy more BlackBerries? Should they require the US to buy BlackBerries if they want to buy the oil? What can the government do?
    garnok and aniym like this.
    09-22-13 12:46 PM
  3. SparkyBC's Avatar
    Why should the government help them. Sure people are losing their jobs, that's how it works when a company is failing. Blackberry has never turned it around the last 3.5 years and they never will. Management got them in this mess, and it will knock them out for good. You may as well fly a plane and dump money out of it. Blackberries problem is much more deeper than any cash could ever fix!

    Incompetent management, over staffed, a brand name that is tarnished for good. The last statement "tarnished brand name" is the nail in the coffin.
    09-22-13 12:51 PM
  4. canuckvoip's Avatar
    How should the government help them? With a bailout? They don't need one. They have $2.6B in cash and no debt. Should they pass a law requiring every Canadian to buy BlackBerries? Should they subsidize the cost of BlackBerries similar to the way the US subsidizes farmers, pay BlackBerry to destroy phones they can't sell? Should they make trade agreements with other countries promising trade concessions if they buy more BlackBerries? Should they require the US to buy BlackBerries if they want to buy the oil? What can the government do?
    I'm not suggesting they should or shouldn't but are you forgetting or unaware of the American car companies and banks? Here's a 700 Billion dollar list for you...

    Bailout List: Banks, Auto Companies, and More | Eye on the Bailout | ProPublica
    09-22-13 12:55 PM
  5. canuckvoip's Avatar
    Why should the government help them. Sure people are losing their jobs, that's how it works when a company is failing. Blackberry has never turned it around the last 3.5 years and they never will. Management got them in this mess, and it will knock them out for good. You may as well fly a plane and dump money out of it. Blackberries problem is much more deeper than any cash could ever fix!

    Incompetent management, over staffed, a brand name that is tarnished for good. The last statement "tarnished brand name" is the nail in the coffin.
    Sunshine, lollipops and rainbows... Awesome! :>)
    09-22-13 12:57 PM
  6. Roo Zilla's Avatar
    I'm not suggesting they should or shouldn't but are you forgetting or unaware of the American car companies and banks? Here's a 700 Billion dollar list for you...

    Bailout List: Banks, Auto Companies, and More | Eye on the Bailout | ProPublica
    Those companies needed the bailout for multiple reasons including teetering on the brink of bankruptcy.. BlackBerry has $2.6 billion in cash and no debt. So again? Why do they need a bailout?

    Also, don't forget, companies that were determined not necessary to the economy were allowed to go under. Lehman was one.
    09-22-13 12:57 PM
  7. canuckvoip's Avatar
    Those companies needed the bailout for multiple reasons including teetering on the brink of bankruptcy.. BlackBerry has $2.6 billion in cash and no debt. So again? Why do they need a bailout?

    Also, don't forget, companies that were determined not necessary to the economy were allowed to go under. Lehman was one.
    Not arguing with you. Like I said, I'm not suggesting it happen. If BB puts itself in that position I'm just illustrating what "could" be a possibility.
    09-22-13 01:03 PM
  8. bradu1's Avatar
    Those companies needed the bailout for multiple reasons including teetering on the brink of bankruptcy.. BlackBerry has $2.6 billion in cash and no debt. So again? Why do they need a bailout?

    Also, don't forget, companies that were determined not necessary to the economy were allowed to go under. Lehman was one.
    The car company bail outs are still a controversy over here. But why would BlackBerry need a bailout? Simple. So consumers would know BlackBerry wasn't going anywhere. They don't need the cash, what they need is stability. The only argument I hear against buying a BlackBerry that I fully understand is when people say, "but what if they shut down?" I think with the updates and new apps coming everyday, if it was known that BlackBerry would be stable and still in business, their marketshare would grow. Enough to be number one or two? Not for a long time, if ever. But enough to be profitable. Finding a partner, or what Microsoft was to Apple, would have the same effect, and probably a more desirable one since people would see another company having faith in BlackBerry.

    Posted via CB10
    09-22-13 01:23 PM
  9. Troy Tiscareno's Avatar
    Even though I disagreed with the car company bailouts, the fact is that the car companies still had plenty of people buying their cars. The main reason they needed a bailout was because they were in a credit crunch, due to the lack of funds available for loans during the financial crisis, which would have caused them not to be able to fund the next batches of cars, starting a chain reaction to destruction. By the government loaning them money, they kept the production lines rolling, their customers kept buying cars, and they were able to repay the loans (or, at least, much of the loans).

    BB is in a VERY different situation. BB isn't in need of money to meet consumer demand, BB is in need of CONSUMER DEMAND. A government bailout isn't going to change that. If BB's problem was that they couldn't afford to make enough BB10 phones to meet sales demands, a bailout would make sense, but that's the opposite of the situation here.
    jfmtl87 and notfanboy like this.
    09-22-13 10:23 PM
  10. incongruent's Avatar
    Best they could hope for is some kind of special status to acquire new talent (something akin to the programs that send doctors to remote areas of canada)... but instead, create some incentive to send marketing gurus and technology geniuses to BB.

    Or some kind of special tax status to incentivize Canadian customers at least such as bb products and bes10 service consultant fees exempt from sales taxes or something. There's not much government of Canada or Ontario can do to incentivize international or US customers without changing nafta and customs.

    I think these things would do little to change the course of the corp culture or change consumer opinion much at this time.

    I think Heins actually has the right idea. Shoot for the next opportunity. The long term opportunity. Keep or sell off parts of the declining cellphone line just to fund the future opportunity. Consumers will wake up one day 10 years from now surprised to find qnx and privatized blackberry are powering everything around them from their cars to their electricity grid. Investors will be itching for an ipo.

    Posted via CB10
    09-22-13 10:44 PM

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