TORONTO -- A pair of spectacular stumbles by large Canadian businesses has shaken the sense of corporate pride in Canada and raised questions about the country's role in the global marketplace.
The latest example is the tailspin at train- and plane-maker Bombardier Inc., one of Canada's biggest companies and the pride of Quebec. The man recruited to save the company, Paul M. Tellier, was ousted on Dec. 13 by Bombardier's founding family. His departure prompted analysts to worry about Canada's future in the aerospace business and the government to promise to try to save the company. Bombardier's stock price has plunged in four years from nearly $25 to around $2 a share.
Problems at Bombardier, the Quebec-based aircraft and train manufacturer, trouble analysts concerned about Canada's "global footprint."
(Norm Betts -- Bloomberg News)
|
|
That comes as problems continue for Nortel Networks Ltd., the Canadian communications giant brought to its knees by the collapse of the Internet bubble in 2000. After slashing its workforce by two-thirds, the company seemed to be struggling back when it announced that its 2003 profit figure was false. Its top executives were fired, criminal investigations began and layoffs resumed.
Air Canada, the nation's icon airline, is trying to emerge from court-supervised restructuring.
"There is definitely cause for concern," said Joseph D'Cruz, professor of strategic management at the University of Toronto. "Nortel and Bombardier were national champions. We were very proud of them. They were Canadian companies with a global footprint. Their accomplishments were very important psychologically and economically. That has been really shaken."
The public failings have put the spotlight on the paucity of Canadian heavyweights in the multinational corporate arena. The list of largest Canadian companies is dominated by energy and banking concerns that keep the core of their business at home.
"We have only a few big multinationals," said Karl Moore, a management professor at McGill University in Montreal. "I think we have fallen short on the global level. But that's been a 30-year criticism in Canada."
More positive, Moore said, has been Canada's expansion in the U.S. market under the North American Free Trade Act. Many of the successes under NAFTA have been with specialized product lines marketed on both sides of the border, he said.
Some Canadian retailers succeed in the United States. Canadian drug chain Jean Coutu Group Inc. recently acquired 1,550 Eckerd drugstores in the United States. Roots Canada Ltd. has taken its apparel brand across the border. Circle K convenience stores are owned by a Quebec chain, Couche-Tard Inc. Aldo Shoes Inc. operates 180 stores in the United States and is growing.
And Canada does have some global players, although they sometimes go unnoticed, analysts said.
