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article imageFinance Minister confirms RIM won't receive Canadian bailout

By Andrew Moran     May 31, 2012 in Business
Fredericton - Research in Motion, the struggling Canadian-owned BlackBerry-maker, will not receive a bailout from the federal government, confirmed Conservative Finance Minister Jim Flaherty Thursday in New Brunswick.
For months now, there has been speculation that the Canadian federal government would issue a bailout to Research in Motion Ltd., the struggling Waterloo-based BlackBerry-maker. At a media event late last year, Prime Minister Stephen Harper refused to comment about RIM and just noted the company faced both opportunities and challenges.
At an event in New Brunswick Thursday, Finance Minister Jim Flaherty confirmed RIM will not receive any aid from the federal government and stated it should undergo a complete restructuring without any assistance from the taxpayer.
“It has been a leading company for Canada in terms of research, development and innovation, but it does need to reorganize itself, and that’s something that we expect the leaders in the company to do on their own,” said Flaherty, reports Bloomberg News.
Flaherty refused to speculate on a possible foreign acquisition of RIM and said he wasn’t aware of any review of a deal as per the nation’s foreign-takeover legislation.
Many have been expecting for quite some time the government would step in since it bailed out the automotive industry.
RIM woes
RIM officials said Tuesday it will most likely face an operating loss in its first quarter, but explained that it has hired top investment bankers from J.P. Morgan and RBC Capital Markets to help them with a strategic review. RIM is looking at partnering with other companies and licensing software.
It also warned of massive layoffs this year. For the next couple of weeks, RIM will eliminate approximately 2,000 positions and could lay off as many as 6,000 employees in its marketing, sales, operations, human resources and legal departments before the year is finished.
BlackBerry is working on the launch of a new software operating system.
More about Finance Minister, Jim flaherty, Rim, Bailout, Canada
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