Industry Committee on April 1st, 2008

[Daniel Friedmann]

No. There are 1,500 employees in Canada, and a small percentage have a personal problem with this deal. I probably have the biggest personal problem with this deal. I lose my dream job--28 years. Other people have other problems.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Would you go and work with ATK?

[Daniel Friedmann]

I don't have that option, so it's a hypothetical question.

I have talked to a lot of employees. By and large, our employees understand the need for this because that is their future. It's the way for us to participate in these programs. They understand that need. We're all proud Canadians and we have our feelings. Would they understand the need? I believe the turnover due to this transaction will be minimal. We have a turnover of about 8% to 9% a year. That means about 140 people leave the company; about 30 have left since this transaction. The transaction does not register on my human resources report as a major concern. Salary is a concern. Other things are a concern.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Friedmann.

Thank you, Ms. Nash.

We'll go to Mr. Simard, please.

[Raymond Simard, Liberal, Saint Boniface, MB]

Thank you very much, Mr. Chair.

Welcome, Mr. Friedmann. I'd also like to congratulate you on the work you do. That's why we don't want to lose you.

The CSA witnesses were saying that Canada punches well above its weight. It's always nice to hear that, because it doesn't necessarily happen a lot in a country of 32 million people. They also spoke of 200 firms in the industry with 6,700 employees. When you clean all of that up and clean up the firms that are working on building planes or working on engines and those kinds of things, how many other firms are there that do what you do?

I asked Magellan the last time, which builds satellites, if they compared at all with you, and they were saying absolutely not, that nothing comes close to what MDA does.

So how unique are you with your technology?

[Daniel Friedmann]

Let me clarify two things.

I think CSA was referring to space, and not aerospace, but you'd have to ask them.

Secondly, when they said that half of their money goes to MDA, a large proportion of it leaves the back door right away to subcontractors in Canada; it doesn't stay with MDA. Well over half of our revenues flow right through to other subcontractors, to many of these 200 companies.

By the way, our international work does that too. This sale will bring that international work to Canada, and that's why some of these other companies are supporting this.

[Raymond Simard, Liberal, Saint Boniface, MB]

So are there other companies in Canada you compete with directly who do this kind of quality imaging?

[Daniel Friedmann]

There are companies in that field. I don't believe there's a company in Canada that can build satellites like we do, but apparently the government does, because they just competed the RADARSAT constellation.

[Raymond Simard, Liberal, Saint Boniface, MB]

You are the best at what you do, as far as you're concerned?

[Daniel Friedmann]

I hope I win that one, but they competed for that one.

[Raymond Simard, Liberal, Saint Boniface, MB]

You are the best at what you do.

[Daniel Friedmann]

I hope so.

[Raymond Simard, Liberal, Saint Boniface, MB]

You are very unique in terms of what you do. So once you're sold to a U.S. interest, Canada does not have a second option even to compete. There is not a second firm here that we can count on to do something similar.

[Daniel Friedmann]

No, but our firm is here.

[Raymond Simard, Liberal, Saint Boniface, MB]

Your firm is here, but there's a bit of a concern. You were indicating earlier that the reason the U.S. didn't launch our satellite was because of technical issues. We're told it was because the U.S. had some concerns about national security, because the satellite was very, very powerful, and they didn't feel they should launch it because it could be a competing satellite.

Is there any truth to that?

[Daniel Friedmann]

All I can tell you is that I'm the contractor and I had a contract with Boeing. They were going to launch our satellite; they were very upset when we said we had to go somewhere else. We were afraid of getting sued. That's all I can tell you.

[Raymond Simard, Liberal, Saint Boniface, MB]

Do you have to be a 100% U.S.-owned company to bid on U.S. space procurement technology or space contracts?

[Daniel Friedmann]

No, we have U.S. companies ourselves.

[Raymond Simard, Liberal, Saint Boniface, MB]

One of the reasons given for this proposed sale was that you were having a hard time accessing those markets. Is that correct?

[Daniel Friedmann]

Absolutely, in every industrialized nation, you have to have a presence to do space work, including Canada.

[Raymond Simard, Liberal, Saint Boniface, MB]

You don't have to be 100% U.S. owned?

[Daniel Friedmann]

No.

[Raymond Simard, Liberal, Saint Boniface, MB]

Are you planning on continuing to work with Canada, assuming the sale goes through, once you become ATK? Does ATK plan to continue working with Canada?

[Daniel Friedmann]

Absolutely.

[Raymond Simard, Liberal, Saint Boniface, MB]

If I understand correctly, you're saying that you'll be able to continue to work for Canada from the U.S., but you can't do business with the U.S. from Canada. That's not a good argument to me.