Mark Evans writes that “Canada Needs to Save RIM” which begs a few questions, like “what” and “how”? What help from the government does RIM need? How would the government help?
Whatever tools at the federal government’s disposal should be used to make sure RIM stays vibrant as an independent company or division of another company with a strong Canadian presence.
As much as I’m not a big believer in government intervention economically, RIM is a special situation because it plays a crucial role within the Canadian economy – not only as a large employer but a company that spins off many start-ups by ex-RIM employees who want to use their expertise and wealth.
If the Canadian government, however, decides not to pro-actively help RIM, it risks having another Nortel on its hands. This is not to suggest RIM is going to seek bankruptcy protection but it may need the government’s help.
RIM is hardly a Nortel bankruptcy situation. Last quarter, the Blackberry maker had revenues of nearly $5B and net income of just shy of $700M. As Jim Balsillie said at the time of the earnings release,
RIM’s business is profitable and remains solid overall with growing market share in numerous markets around the world and a strong balance sheet with almost $3 billion in cash.
So, our government’s cash isn’t needed. The government isn’t really known for its marketing prowess to help out on that side. Should we have special tax credits for Canadians using Blackberry devices? That may run afoul of various free trade agreements.
There is no question that RIM is an important, if not integral part of Canada’s high tech landscape. But what can Ottawa do? What should Ottawa do?