At the dawn of the 1990s, tumbling trade barriers and deregulation were opening doors for ambitious Canadian companies on the world stage. The Globe and Mail’s ROB Magazine marked the new decade by celebrating five “Conquering Canadians” – companies that were showing the way for others in this new global race.
They were: Lavalin, Bombardier, Nortel, Olympia & York and McCain.
With three decades of hindsight, it’s an unfortunate list. Nortel and O&Y would eventually go bankrupt. In 1991, ailing Lavalin was swallowed by rival SNC, which is now retreating from some global markets to relieve financial pressures and boost its flagging share price.
Of the five, only McCain is still in foreign expansion mode, announcing this week a US$300-million expansion of a French-fry factory in Othello, Wash.
Then, there is Bombardier, which on Thursday continued the consolidation of its once-promising commercial aerospace business by announcing the planned sale of its aircraft component plants in Morocco and Northern Ireland.
A key reason Bombardier earned a spot on the “Conquering Canadians” list was its surprise 1989 acquisition of the troubled Short Brothers aircraft plant in Belfast. Shorts would eventually make wings and other components for Bombardier’s CRJ regional jets, and later for its larger C-Series aircraft.
But control of the C-Series was sold to Europe’s Airbus last year, and renamed the A220. After the sale of Shorts, the wings on the A220 will no longer be made by Bombardier workers. And a chunk of the A220 assembly line is moving to Mobile, Ala., from Mirabel, Que.
Bombardier is now officially a shrinking company. Or as chief executive Alain Bellemare put it: The company is strategically zooming in “on the businesses that will create the most value for shareholders” – namely, business aircraft and rail. This and previous divestitures will leave its money-losing regional jet division a bit of a corporate orphan, pretty much ending the company’s long-held dream of greatness in commercial jets.
Bombardier’s core rail and business-jet divisions remain distinctly global, with Canada representing a relatively small share of revenues and operations.
And yet it’s hard not to see the pending sale of Shorts as a retreat from foreign markets. Belfast was a big piece of Bombardier’s global presence. Bombardier has roughly 3,600 employees there, making it Northern Ireland’s largest industrial employer. Three years ago it had 5,000.
Times have changed – for Bombardier and the global economy. When it bought Shorts, the plane and train maker was optimistically looking ahead to the creation of the European Union in 1993, seeking to enter this vast new market.
Bombardier executives have openly fretted in recent months about the uncertainty over Britain’s exit from the EU, and what that could mean for its operations in Northern Ireland.
SNC-Lavalin is similarly retrenching. The Montreal-based engineering giant said this week that it would exit 15 countries and focus more on core markets such as the United States, Canada and Australia. SNC largely blames legal troubles, including a pending trial on fraud and bribery charges related to work it did in Libya in the early 2000s, rather than an inability to compete in international markets.
Gone is the boundless promise of globalization that prevailed in the 1990s. Economic isolationism and protectionism are on the rise, making it harder than ever for companies such as SNC and Bombardier to be national flag-bearers around the world.
Coming up with a list of Canadian-based global champions in 2019 isn’t easy. Magna (car parts), Brookfield (real estate and asset management), Nutrien (fertilizer), Saputo (dairy), Thomson Reuters (media), Alimentation Couche-Tard (convenience stores) and McCain (frozen food) all boast international reach. Certainly, some of the mining companies would warrant inclusion on the list.
But the global stage is not where most Canadian companies perform these days. The Report on Business Top 1000 list is dominated by financial institutions, resource companies and businesses that mainly serve Canadians, such as telecoms and retailers.
A larger question for Canada is whether this country is still a good place from which to launch big global ventures.
Increasingly, the answer in Canadian boardrooms is, no. Chronically weak business investment suggests a lack of ambition and an aversion to risk. Dreaming big has become a rare commodity in Canada.
It’s hard to imagine that a Canadian company would dare to launch a major new commercial aircraft, or anything of that scale, today.