The remark, made at the launch of Cisco's Converged Mobility centre in Sydney today, highlights the government's sensitivity to suggestions the policy environment for information and communications technology (ICT) in Australia is inadequate.
Senator Richard Alston told reporters following the launch "Ericsson is moving out because they are in very serious trouble as an organisation," saying that local market conditions were not to blame for the decision.
Ericsson announced in October last year plans to shut down the AsiaPacificLab research facility over six to nine months, costing 450 research and development engineers in Sydney and Melbourne their jobs.
The company, which has recorded losses for nine straight quarters, has named a new chief executive to help guide it back to profit, which is forecast for the end of this year. It has undergone a rigorous cost-cutting program to cope with falling demand from telecommunications companies themselves fighting a massive debt load as an industry.
Senator Alston's comments are a far cry from the plaudits heaped by the government on the company before its announcement of the closure.
"Ericsson is to be congratulated for its significant investment in research and development in Australia, such that it's AsiaPacificLab is the largest private sector ICT research lab in Australia," the government said in a statement issued in March 2002.
Senator Alston has over recent months reacted harshly to any remarks indicating the Australian ICT environment is lacking and has blasted the Australian Computer Society's release of figures claiming unemployment in the sector vastly exceeds the all-industries average.
Alston also told reporters that Telstra, which today announced a 44 percent drop in first-half net profit, was in "good shape" relative to the "diabolical circumstances" of telecommunications players such as BT and Deutsche Telekom.
