VANCOUVER -- MacDonald Dettwiler and Associates Ltd. has for months argued that selling its space division to an American company is essential if MDA is to land lucrative American defence contracts.
That's not necessarily the case, says the chief executive officer of the Canadian arm of giant American defence contractor Raytheon Co.
"I would not say that being owned by an American parent is a big advantage," said Joseph De Remigis, CEO of Elcan Optical Technologies, which was acquired by Raytheon in 1997 and relies on the defence sector for about 70 per cent of its annual sales.
(Raytheon does not break out subsidiaries' results but Elcan has sales of about $300-million a year, Mr. De Remigis said.)
Being owned by Raytheon provides an edge in selling to Raytheon but doesn't help when it comes to seeking business from other prospective customers, he added.
If MDA wants access to the U.S. market, he added, then "they ought to get off their duffs and go down there and sell their capability, which is what we do."
An MDA representative was not immediately available to comment.
CEO Daniel Friedmann told a parliamentary committee last month that an American partner was essential for MDA to build its export business.
"Without this partner, we can't get the work," Mr. Friedmann told the committee. "We have tried non-ownership-related partnerships and although they could satisfy shareholder return, they would not provide a long-term sustainable solution for our employees."
Mr. De Remigis also played down difficulties posed to Canadian companies by American regulations that favour companies that have operations and employees in the U.S.
Critics of the proposed sale of MDA's space division have argued that an American purchaser would shift operations to the U.S. to improve its chances of getting U.S. defence work.
And MDA executives have warned that if the sale does not go through, MDA would be forced to hire employees and expand operations in the U.S. to gain access to U.S. contracts.
Mr. De Remigis disagreed, saying there is a Canadian exemption in the International Traffic in Arms Regulations that can make it easier for Canadian companies to do U.S. defence business.
MDA announced the $1.3-billion sale of its space division to U.S. weapons and defence company Alliant Techsystems Inc. in January.
Last month, federal Industry Minister Jim Prentice rejected the sale, saying he was not satisfied that it met the "net benefit" requirements of the Investment Canada Act.
That decision is subject to a 30-day review that ends this week.
MACDONALD DETTWILER (MDA)
Close $41.67, up 32¢
