As company struggles, Waterloo is RIM's city of angst

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Colin Plant still remembers the time he briefly met Jim Balsillie. It was at an event three years ago in Waterloo, Ont., just before Mr. Plant's life unravelled and he ended up homeless.

"He probably wouldn't remember me," said Mr. Plant, who once worked at Research In Motion Ltd.

Today, Mr. Plant is rebuilding after he was knocked down by divorce and a spell of unemployment. And once again, RIM and Mr. Balsillie have had an impact on him: Mr. Plant now lives in a new social housing project that was built in part with donations from RIM's former co-CEO.

The housing has helped him put his life back together and he is grateful for Mr. Balsillie's support. Assessing RIM's recent misfortunes, Mr. Plant says: "It's sad. They have contributed a lot to this community."

It's hard to find anyone in Waterloo who hasn't been touched in some way by RIM, Mr. Balsillie or Mike Lazaridis, the firm's other former co-CEO – Mr. Lazaridis and Mr. Balsillie stepped down in a management shakeup Jan. 22. They dominate the city in a way probably unmatched by any business people anywhere in Canada.

RIM is the city's largest private sector employer with about 8,000 people, the largest office owner, the largest benefactors, the largest sponsor of just about everything in town and the very reason Waterloo has gained international fame as a high-tech hub.

But with RIM on the ropes, its share price tanking, and Mr. Balsillie and Mr. Lazaridis no longer running it, people across Waterloo are struggling to come to grips with a radical possibility – life without a prosperous RIM.

"It's a touchy subject," said John Lind, who works for Colliers International in Waterloo and specializes in commercial properties. "I think it's something we need to talk about. But they are just so dear to our region on so many levels."

Mr. Lind said people talk about RIM and its future in "hushed tones," afraid to be seen speaking ill of such an important player in the community. Last week, he gave a presentation on the outlook for commercial real estate in the city and joked that RIM was "the elephant in the room." Few people wanted to discuss what could happen to the local economy if things get worse for RIM, which owns or leases nearly one-third of the city's office space.

"We're all hopeful and we want to have hope and it's very dear to this region, but let's be frank. If you talk to someone from Silicon Valley or just as far away as Toronto, RIM's in trouble," Mr. Lind said. "They have the two most ferocious competitors the world has ever known," he said, referring to Apple and Google.

But many others around town simply don't accept that RIM's future is in question. "The outside world is jumping all over them, but we know here within the community that they are doing very well," said Waterloo's Mayor Brenda Halloran. "Here within the community we are very supportive, very secure in the knowledge that RIM is going to be fine."

When asked if she had any doubts about RIM's future, Ms. Halloran tersely replied: "No. That isn't even something we worry about."

That feeling is shared by many. "Maybe it's a bit of an unfair advantage," said Iain Klugman, CEO of Communitech, a local industry organization that represents about 500 high-tech companies including RIM. "I live here and I live next door to people who work at RIM and we have a much more sort of intimate understanding of the company. For us we're very excited about this next chapter for RIM."

When pressed, Mr. Klugman conceded the departure of Mr. Balsillie and Mr. Lazaridis as RIM's top executives (both will remain directors) has affected the city. "For people who live here it's a little hard to kind of get their heads around the fact that Mike and Jim aren't running the company because they always have. They've always been there. And it's kind of like, 'Oh, wow.' "

Waterloo has been through something like this before.

The city was founded in 1816 by Germans, Mennonites and British, who arrived with a multitude of skills and a spirit of entrepreneurship. Joseph Seagram was among them. He founded a distilling company in Waterloo in 1857 that eventually became one of the largest liquor businesses in the world. Much like RIM, Seagram dominated the city, sponsoring civic events and employing much of the community. But the business was eventually sold by its owners, the Bronfman family, and the local distillery shut down along with a museum dedicated to the company's exploits.

The same thing happened next door in Kitchener with Electrohome Ltd. Once a multinational maker of stereos, Electrohome employed 4,500 people in the region. But that business too faded away. Electrohome "got done in by changes in technology which is kind of foreboding when you see the concerns about RIM and changes in technology," said Ken McLaughlin, a local historian.

Mr. McLaughlin believes things are different this time and that Waterloo has diversified sufficiently to withstand any serious downturn at RIM. Companies such as Open Text Corp., Google and Sybase have expanded their operations in the city and would likely snap up laid-off RIM workers. And that is already happening. "We just hired a couple of people from RIM," said Dave Kroetsch, a former RIM employee who runs Aeryon Labs Inc., a small Waterloo-based robotics company. RIM "has generated a huge influx of talent to Waterloo."

But for now, Waterloo is full of RIM boosters like Wendi Campbell, who can't see it fading away.

"I'm a Waterloo girl," said Ms. Campbell, executive director of the Food Bank of Waterloo Region, which receives donations from many RIM employees. "I'm a BlackBerry-toting executive director who is quite confident in [RIM's] ability to get through whatever it is they need to get through. They are a big part of the work I do every day. I wouldn't survive without my BlackBerry and I think they'll figure it out."

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