Canada

Business and political leaders are reacting with a surprisingly philosophical sense of calm to the final breakup of Nortel Networks, the Financial Post reported on a Canwest News story. New owners will replace old ones, they say, and there’s still opportunity for innovation and jobs, whether the employer is a century-old Canadian icon, a foreign-based multinational, or a startup run by ex-Nortel staffers. The Canadian Council of Chief Executives for its part said "a shift of ownership by itself may not be a bad thing" for Nortel, or for any company sold to a foreign firm.

Insolvent printing giant Quebecor World Inc. is a step closer to exiting from bankruptcy protection after its Canadian creditors strongly endorsed its restructuring plan yesterday, The Globe and Mail reported. The yes vote, concluded at a downtown Montreal hotel, was a positive indicator of the outcome of a similar vote by U.S. creditors. The tally of that vote was not expected until late yesterday, said Quebecor World spokesman Tony Ross.

Nokia Siemens Networks says it will hang onto about 800 Canadian employees of Nortel Networks Corp. as part of the plan to buy a major portion of the former technology giant's wireless business, The Canadian Press reported. Simon Beresford-Wylie, chief executive officer of Nokia Siemens, said Monday in a conference call that about 2,500 Nortel employees would transfer to Nokia Siemens, with about a third of them in Canada. About 500 of those jobs are expected to stay in Ottawa, where the company houses most of its Canadian operations. Most of the other jobs will be at Nortel's U.S.

Nortel Networks, once a technology giant, has decided to sell itself off in pieces rather than attempt to emerge from bankruptcy as a restructured company, the Associated Press reported. Nokia Siemens Networks agreed to buy some wireless operations of Canada's Nortel Networks Corp. in a $650 million deal as the more than century-old Nortel announced it is looking for buyers for the rest of its assets.

The federal government could have prevented the liquidation of Nortel Networks Corp. with a massive bailout, but instead Ottawa has decided that the best way to salvage something from the biggest corporate bust in Canadian history is to help fund a foreign breakup, The Globe and Mail reported. Through the Export Development Corp. (EDC), which normally helps Canadian exporters and investors expand their businesses abroad, the government will provide $300-million toward a credit facility for Nokia Siemens Networks' $650-million (U.S.) bid for Nortel's wireless assets.

Fraser Papers Inc. and its subsidiaries have initiated a court-supervised restructuring under Canada’s Companies' Creditors Arrangement Act and will seek similar relief pursuant to Chapter 15 of the U.S. Bankruptcy Code, Dow Jones Newswires reported. Fraser Papers, Toronto, said PricewaterhouseCoopers Inc. was appointed by the Ontario Superior Court of Justice as Monitor to assist the company through its restructuring process.

Nortel Networks Corp. sought financial aid from the Canadian government to avoid filing for bankruptcy protection but was refused, Nortel President and Chief Executive Mike Zafirovski told a parliamentary committee Thursday. The telecommunications-equipment company filed for protection under the Companies Creditors Arrangement Act in Canada in January, Dow Jones reported. Testifying before the House of Commons Finance Committee, Zafirovski said he had private discussions with Finance Minister Jim Flaherty and Industry Minister Tony Clement.

Air Canada has bought itself some breathing room after hammering out tentative agreements on pension funding with its employees, but observers say it still may not be enough to keep the country's largest airline out of bankruptcy protection, the Toronto Star reported. The airline reached tentative deals with its five biggest unions this week that include a moratorium on pension payments for 21 months, with four of the five unions also agreeing to wage freezes over the same period. As well, the agreements call for Air Canada to raise $600 million in financing.

The Canadian Press reports that Canwest Global Communications newspapers' unions were asked discuss concessions as the company faces restructuring to cope with debt of C$3.9 billion. In a copy of a provided to the Canadian Press by the company, Canwest Newspaper Operations President and CEO Dennis Skulsky suggested a 5% wage cut for all Canwest newspaper employees would result in $C20 million in savings a year and could help the company avoid bankruptcy.

The Grand Caravans, 300s and Chargers could be rolling off the assembly lines at Chrysler Canada plants within three weeks as the company's parent pulls away from bankruptcy protection with a new partner following a two-month shutdown, the Toronto Star reported. Although Chrysler would not confirm dates, the Canadian Auto Workers union said yesterday that company officials have suggested privately they want to reopen the minivan plant in Windsor, a car operation in Brampton and an engine casting factory in Etobicoke by June 29.