No bailout for Nortel, industry minister says
CTV.ca News Staff
Published Thursday, June 18, 2009 9:43PM EDT
Ottawa says there is no hope for an auto sector-like bailout for Nortel Networks, the once mighty tech giant.
Industry Minister Tony Clement said "there is no role for government" in sorting out Nortel's significant financial problems.
Nortel Networks CEO Mike Zafirovski, appearing before the Commons finance committee in Ottawa Thursday, admitted under questioning that he asked the government to intervene last year to keep them out of bankruptcy proceedings.
Zafirovski says he was so certain that the high-tech giant was on the rebound that he even invested his own money in the company.
Zafirovski said his family invested about $500,000 in Nortel because he was certain the company would recover.
He said some of the money he invested was to pay college tuitions for his three sons.
Zafirovski said the tech firm will be making an announcement within two weeks to announce plans to deal with Nortel's financial troubles.
During his testimony, Zafirovski said he's confident Nortel's plan moving forward will save the maximum number of Canadian jobs.
Zafirovski wouldn't provide details on the plan but said it could involve the sale of assets.
The committee is hearing complaints about Nortel's treatment of former employees after the fallen technology giant sought court protection from creditors last January.
Zafirovski said as the "world turned upside down" with the global financial crisis, Nortel "hit a wall."
"Frankly, we hit a wall and the global financial crisis and recession compounded our challenges and impacted our ability to complete our transformation," Zafirovski said.
Former Nortel employees are among witnesses set to appear before the committee.
Zafirovski, on the advice of Nortel lawyers, originally rejected the offer to appear before the committee. It is unclear why he changed his mind.
Last year, Nortel shares were worth $10 each, now they're worth about 20 cents.
The NDP plans to introduce a motion on Friday to call for emergency changes that would move pensioners and employees to the top of the list for creditors.
"Nortel is the AVRO Arrow of the 21st Century. It is a colossal mistake to let this company go," said NDP deputy leader Thomas Mulcair.
The NDP motion will be introduced on the last day the House of Commons sits before the summer break.
With files from CTV Ottawa and The Canadian Press