jimomura@lsuc.uucp (Jim Omura) (12/31/87)
I posted the following earlier today on BIX, but I thought
it would be of interest to Netters as well. I have not really
taken sides on the Free Trade issue (this posting may make
people think otherwise, but it's true). And I would like to
hear opinions on the matters addressed.
TITLE: McDonnell Douglas Strike, Foreign Ownership, Free Trade
These 3 things are weighing heavily on my mind lately. Let's
skip "free trade" in itself for a moment. Foreign ownership is
the real issue of the day.
The McD-D strike stands out in my mind because the US takeover
of McD-D was hotly opposed by the Liberals and NDP. The Tory
government made the expected noises that it was in "out benefit".
Actually, both sides made "expected noises" I guess. :-) There's
no doubt that being a big company, McD-D is probably *more* cautious
than other US takeover parties. Yet, there seems some indication
already that they may be siphoning off jobs to the US. Certainly
if the takeover never occurred, there'd have been no issue. It's
not clear whether the strike would have been as bitter or long
(or any strike at all) except for foreign ownership. Oh, it could
have been worse, but one doubts whether production would have been
moved to the US during the strike except for the takeover.
Note that the problem is not specific to "foreign" ownership,
but one common to all big company/little company takeovers. It's
just that in this case it's effect is on a national level. It
is probably made worse by international politics. If the head
office is in the US, then local US politicians have more weight
to push the management to swing the plum jobs outside of Canada.
Having the clout of 10 times the market and other political
resources is also a factor.
I expect that demographically, we on BIX are probably not
that worried about "factory work" level jobs, but what about R & D?
We did quite a bit here in Canada. I would expect that those jobs
could also be siphoned off to the US. Also, it's possible that
the type of R & D that McD-D was doing may be dropped as not being
profitable. Low volume areas are often lopped off by big companies.
In the field of magazines, I'm still stinging from the collapse
of Creative Computing -- one of the most *successful* magazines
in the computer field, until it was taken over by a large publisher.
In the computer field, it's hard to know exactly what to
expect. Batteries Included is dead and gone. I have no idea if
that is because of bad management (hard to believe) or just that
the companies buying them out were "corporate raiders" that stripped
the assets and ran. Exceltronix is also gone, and I have no idea
what happened to their R & D. In both cases the assets have ended
up in US hands. In the case of BI, it's *clear* that Canadian
jobs were lost.
Now, back to this "free trade" deal. I *still* have not
got a copy of it to read for myself. I'm hoping to do so over
the next week. It is clear though, that it is related to freeing
up of foreign ownership. It worries me.
--
Jim Omura, 2A King George's Drive, Toronto, (416) 652-3880
ihnp4!utzoo!lsuc!jimomura
Byte Information eXchange: jimomurabrad@looking.UUCP (Brad Templeton) (01/05/88)
In article <1987Dec31.122642.19862@lsuc.uucp> jimomura@lsuc.UUCP (Jim Omura) writes: >In the case of [Batteries Included], it's *clear* that Canadian >jobs were lost. I'm not sure I understand this. Batteries Included was bought by a Canadian public company, and afterwards it collapsed. After everything was ruined, Electronic Arts came in and purchased the assets, preserving the contracts with most of the developers. Certainly jobs were lost, as in any company failure. But the job loss had nothing to do with international matters. In fact, the US company helped preserve income for some folks, at least for a while. Of course, not for long, since the Atari ST never turned into a major machine the way people wanted. -- Brad Templeton, Looking Glass Software Ltd. - Waterloo, Ontario 519/884-7473
jimomura@lsuc.uucp (Jim Omura) (01/06/88)
In article <1276@looking.UUCP> brad@looking.UUCP (Brad Templeton) writes: >In article <1987Dec31.122642.19862@lsuc.uucp> jimomura@lsuc.UUCP (Jim Omura) writes: >>In the case of [Batteries Included], it's *clear* that Canadian >>jobs were lost. > >I'm not sure I understand this. Batteries Included was bought by a Canadian >public company, and afterwards it collapsed. You're right. In fact, I had mashed the story a bit in my mind while I was writing this piece. Most of what I know about the Batteries Included story is rumour anyway, so I'd appreciate it if anybody who knows the facts better could tell me what really happenned. In fact, They were an Ontario corp. bought out by a western company. It is unclear why the purchase occurred, but I recall that I heard for a while before the collapse occurred, that the running of the company and development was going to move west. There seemed to be some "bailing out" by programmers, and then sometime later BI was gone. I was mixing up a "foreign" takeover in the sense that it was outside the Province of origin with the fact that the assets seem to have wound up in US hands in the end. Nonetheless, the speed with which it happens makes one suspicious that the whole thing was a "strip the assets and run" buyout rather than a serious attempt at expanding the company and running it for increased profitability. Let it be noted that clearly *any* buyout of a company can be for either reason and it need not be that "foreign" takeovers will necessarily be worse in that respect than any other. However, I think it's clear that the presures are such that sucking the bought out company dry is more likely to happen, and in a more detrimental way, when the buyer is foreign. There's the fact that it's harder for the employees of the bought out company to move to the new head office, or factory, or the fact that you can move production across the border to your "home" territory to placate "local politicians" and simply shut down the "foreign" branch completely. Goodyear in New Toronto did that within the last year. They argued that the New Toronto plant was not economically competitive. That belies the fact that it's a company's choice where they put updated technology to *keep* a plant economically competitive. > >After everything was ruined, Electronic Arts came in and purchased the >assets, preserving the contracts with most of the developers. > >Certainly jobs were lost, as in any company failure. But the job loss >had nothing to do with international matters. In fact, the US company helped >preserve income for some folks, at least for a while. Of course, not for >long, since the Atari ST never turned into a major machine the way people >wanted. Brad, just because your company's product for the ST isn't selling well doesn't mean nobody is making money in the ST world. Quite the opposite. I know some programmers who are doing *very* well programming for the Amiga and the Atari ST both. It *is* a "major" machine. Alice is nice, and I've given it mention on BIX. Heck, it's more than nice. It's *wonderful*! But the market right now is mainly C in terms of languages, and for whatever reason, outside of C, Modula-2 is growing and among Pascals, OSS is selling, but nowhere near the level of the various C compilers. I would not translate your sales into a generality. Beyond that there's the fact that BI wasn't just selling ST products. They were riding mainly off Commodore 64 sales I'd expect, and had work being done in the PC area. Furthermore, they were not, as far as I know, paying advances on the development contracts, so that their development expenses were kept fairly minimal. I had been to their offices and the offices were fairly new, and very large. It could be that they overdid expansion, but if you look at the history of the company, I have doubts about that kind of mistake. They seemed very cautious -- having had their store down on Queen St. for quite a while before making the decision to become strickly a software company. -- Jim Omura, 2A King George's Drive, Toronto, (416) 652-3880 ihnp4!utzoo!lsuc!jimomura Byte Information eXchange: jimomura