Ciao, Calgary

In Nortel, facilities get closed if there is no important ELT (read executive) present. Calgary had no heavy hitter exec, so it's gone. Other facilities are harder to close. RTP has Madman Hackney, Ottawa has Blowhard Roese, Dallas has Lowe, Toronto has the Z-man (or is his home base Chicago?). So what location could be next? Belleville, Santa Clara, Chateaufort - maybe?

Things change, nothing stays the same, life goes on, etc..

The monumental waste of yore was basically "monkey see, monkey do" from the top down - marble plaques made up for the "winners" of some "team builder, color-coordinated staplers and hole punches ordered, reams upon reams of countless varieties of expensive printer papers and labels stashed everywhere, then left to gather dust when a printer's ink ran out, right next to slick Nortel ad glossies that went nowhere, every conceivable phone gizmo cluttering desks and workspace ,all to help things get finished..... Labs fared no differently.

With every facility closure one might "walk the mile" of deserted cubicles and labs and behold the once fancy staplers and cables one more time, Indeed "finished". Garbage, like the very "trash" it was all supposed to replace.

It never got easier for me to see it go that way. It was kInda like a cancerous growth that came back time and aagain. Last time I stopped in to check out the old haunts some old faces were gone, a few new ones come, slick new ad glossies were stacked about, but the cubes were empty, and, sure enough, ancient papers remained stacked amongst obsolete cables, the halls now filled with outbound palettes.

The new guys appeared to be guests from the outside and even abroad, learning the ropes, or cables, in order to apply them back home. Transients.

Its sturdy and even considered new-fangled in some places but someday Nortels legacy equipment will inevitably go the way of the floppy drive

Have you ever frequented a nice cosy restaurant, which after time, decides to expand - or even worse - goes franchise? The quality starts to suffer, so business starts to dwindle. Those every-so-often new menu creations stop coming. Eventually you stop going because it just doesn't work for you. The business starts shutting down and along the way the employees, especially those at the old locations, become very demoralised.

This is very similar - what was once a cozy relationship, for the most part confined to Bell and on a smaller scale MTS, AGT, Sasktel, NBTEL - outgrew it's own succuss and the business decided to go global in a big way. At some point Bell realized its majority ownership was impeding global success, so NT went 'on the market' . Global expansion happened, primarily in the US and Europe but with sales offices in every rinky dinky little country on the planet. (Those same tiny sites usually bringing with them negative margin.) Eventually quality and innovation started to drop, so old and new customers started to look elsewhere, and with shrinking budgets they started tightening the purse strings. So NT had no choice but to reduce costs, which meant even less innovation and quality, which meant even less business - you get the picture.

The Calgary presence, at one time a large manufacturing facility, was clearly established as a form of political payback when AGT was buying all those SP-1's and then later many more green and brown DMS thing-a-ma-jigs. The volume of business that made investment in some of the Canadian locations no longer exists, so surprise look what gets chopped. I don't think anything is certain anymore, even Ottawa.

Where to from here? Is Nortel setting up shop in India or China or Turkey? Not really - they are in all three countries, but primarily via outsourced partners or JV's - Wipro, Infosys, TCS, GDNT, NETAS. I think Nortel took a look at a R&D facility in India - but they couldn't afford the facility.

Who's in the kitchen?

Chop, chop, chop till you drop. Montreal's next. People go home or go away.

out sourcing is the desired method of reducing costs, right? lets out source the executive team to the cheapest country we can find. that would mean less cost to them and that would mean a lower salary requirement from them.. or we could say, like i heard mant times,''you are over paid for your area', so you get less pay...

CS,

I haven't a clue what you are trying to say.

Interesting thread. Nortel still has a ways to go but they will get there one way or another. Remember, engineering is just one part of a company. I think Nortel's issue has not been designing good products, its been weak marketing and not building products with the right features and investing in the sales and marketing channels to exploit all the potential applications of a given product. I like the relationships with IBM and Microsoft because they will open channels that Nortel never had access to in their battle "at the table" with Cisco. Nortel is properly positioning itself from a cost structure standpoint, not to compete against the Cisco's of the world but the Huawei's of the future.

From a market standpoint, all competitors appear to be avoiding consolidation at all costs. I believe this may eventually change in 2008 and 2009. We live in interesting times.

With the closure of the Calgary plant does anyone have any idea what that means for the rest of the Canadian plants -- Specifically Montreal, which has seen significant downsizing over the past 8 years. Anyone heard any rumors, truths?

Mike Z is a good guy and a smart leader and he's hired some reasonably talented folks too....but those guys have hired some distinctly average (and over confident) people. And if you look at the people that level have hired, well that's where you find the real duds. The company is in more of a spin than it's ever been....the level of change is so great there's pieces of the chassis falling off all over the place. In a years time, the dust might have settled and hopefully the company will have found it's feet and be making real money again. But from where I sit, I see a real danger that it's going to crash and burn and this time next year, what used to be Nortel will be in three or more separate fragments.

actually Zero-man is a fine president. out of his league as a C-level.

Interesting points of view. Of course, I can't remember the last time I had "only" a 12 hour day myself... It must be all that offshore competition!

Oh, and by the way, I an semi-retired now, but my last position as a "VP of Sales" was for a Japanese Company. I guess someone's job over there was "outsourced" to me here in the USA.

Hehehe... so there ya go!

: )

You have to forgive me here today. I'm holding 45,000 shares of Nortel, and it's been a while since I had a $20K+ day in one position...

wow, Don, I guess 20K would make anyone smile. Then again, if you bought when MikeZ came in then I'm sure you also smile at the million plus you've seen in losses over his tenure.

It was a long time ago, on some other post, that someone mentioned MikeZ is a good COO, but a terrible CEO. He's fine with trying to trim a budget, but terrible at trying to re-invent a company. We have several markets we 'must win' in for Nortel to turn around...but I'm willing to stake that everyone of those markets will be so much smaller then Nortel forecasts (e.g wimax, umts) that even winning won't be enough.

The vision of the company, unfortunately, is NOT clear, it's all marketing speak. You're in Sales Don, so you must love such vague gradiose words to describe Nortel's business transformation....but clever marketing speak isn't enough to turn a company around.

Don, ease off on that kool-aid! ;-)

I think the majority of the investment community would classify your listed points as generalities and would want more substance before sharing your enthusiasm. For example, I only see evidence of a few Nortel value propositions and the collection of them is not enough to sustain Nortel revenues as the more mature portfolios head into decline. And although Nortel has a couple of partnerships with big enterprise players, there is never any talk about forecasted or achieved top-line benefits. There must be a reason for that. Lastly, I think if you checked you would find that Nortel's big accounts like Verizon are not all that pleased these days. Not pleased with execution or industry leadership.

Some people here have a specific axe to grind with Nortel, and it's pretty transparent when that's the case. But there are also some pretty informed posters here who simply refuse to declare victory based on buzzwords and demos. Bring on some solid execution-driven successes (big ones) and I guarantee that the axe-grinders will be drowned out by the cheers of the fans. However, I personally no longer see that as a potential outcome under the current executive regime, which is sorely lacking in segment knowledge.

I find the comments from Frank and Don interesting in their apparent "if you're not with us you're against us" tone. Frank says, "There are so many people that want NT to fail, it is strange." There may be some who would like to see Nortel fail outright. There are others, however, like myself who would love nothing more than to see Nortel succeed but believe they are going about it the wrong way.

Outsourcing is not the panacea that the Executive Leadership Team seems to think it is. There are hidden costs that seem to be ignored or poorly understood, and there's no reason to not recognize them since they've been identified and commented on in major news media for the last several years. Companies who've tried to do it have scaled back their efforts as they realize that cheap, long distance labor comes with a price that far exceeds the combined paychecks of the underpaid workers. Team interactions are virtually impossible when time zones are 10 to 12 hours off from each other. Equipment logistics are just as bad. Sharing equipment during one team's off hours looks good on paper but in reality is no where near as workable as the executives and their bean counters would like. The quality of the work isn't as good and attempts to verify it prior to acceptance are made next to impossible due to bureaucratic and/or contractual red tape (built in inefficiencies).

Don, as a VP of Sales, can feel comfortably smug and secure in his job since it's unlikely to get outsourced to India or China. If it were, and there's really no reason why it couldn't or shouldn't outside of the big guns protecting their own, I suspect he'd feel a bit different about it. I further suspect he'd respond to any suggestion regarding outsourcing his position as unlikely since it couldn't be done by an Indian or Chinese VP in India or China, which of course isn't true. Or at least it's not any more true than saying an Indian or Chinese can do my job better than I can; just cheaper.

Contracting the work force and the facilities they work in and migrating the work overseas is not going to help Nortel achieve marketplace superiority. Nor is marketing hype. Don and Frank saying so isn't going to make it so. My saying that Nortel's current efforts aren't going to succeed in the long run doesn't make it so either. Time will tell, but I feel that precedence is on my side, not theirs.

Don,

you are missing the point a tad here. Of COURSE people are emotional. This cabinet has been brought in as a "hatchet gang". They are so inept, internally we have news after news about how great they are and how we are striding forward. it utter rubbish, sure the company needed to thin out, but they have taken some monumentally bad decisions and the company now has a culture of blame, fear and "lets produce slides to prove our worth". We're not funtioning. They might as well have brought in equlity splitters and be done with it, the soul has gone anyway.

My point of view may be a bit unique, having spent 20 years of my working like in the Telecom industry, the last several which in a VP of Sales position. Although not wishing to get into a drawn out debate, I am will to share a glimpse of what I see:

1. A very strong value proposition / competitive distinction.
2. Commitment and execution of broad support/customer services initiatives.
3. Strategic partnerships with industry leaders, globally.
4. Ongoing demonstrations of state of the art products and IP
5. Strong global presence and market penetration
6. Multitudes of positive testimonials from both customers and technologists.
7. Clear forward vision for market evolution/penetration and matching product roadmaps.
8. Willingness to make the tough, yet appropriate decisions regarding work force optimization, etc...
9. Commitment to branding, advertising, market participation, training, etc... commensurate with a world-class enterprise.

I can go on. I believe in an open-minded approach to the evaluation of any investment, however it appears that many of the posters here are extremely emotionally negative generalists for one reason or another., and while I realize that the recent history of Nortel and the associated stock price erosion has resulted in capital losses for many investors, the opportunity moving forward, in my opinion, is extremely compelling.

This is exactly what is wrong with this company. You have an exec here is so much removed from the engineers and does not see the day to day activities of engineer. I very much would like to see Nortel turn it around but the disconnect between the upper crust and the lowly engineer is sticking out like a sore thumb. Sorry you can not cut your cost to profitablity, never has worked and never will.
Here is what you don't see.
1. Exponential bad patches and fixes
2. 12 hours days
3. Missing family functions
4. Working holidays and Weekends
5.Conference calls too many to actually work on issues
6.Product knowledge base gone
7.Passion about Nortel disappearing
8.Knucklehead moves
9.Increase of admin time -taking time from customer issues
10. Lack of loyality from the upper crust

Don- I think you've hit the nail on the head. Turning a company...the right way...takes time. It has taken plenty of time, and now the fruits of the hard work are starting to pay off. NT has to keep executing. They can't afford ANY slip ups. There are so many people that want NT to fail, it is strange. I think there are alot of former employees on the board who lost alot of money due to the ineptitude of prior management teams. They are upset, and justifiably so. There is what I call a visceral hate. It's just another wall to climb for NT.

Maybe NT should leave Canada. The whole country seems to be negative toward them. Telus just annonced a large buy of ALU equipment...and the Ottawa paper has a big story on UC in Canada...and the company mentioned is buying equipment fromm Cisco Canada!

Don, how can you say that? On what basis? Mike Z and his new cabinet have gutted the value of Nortel and have given no roadmap for value recovery. Are you a Cisco shareholder? An ALU shareholder? PLEASE tell us why we should feel good. We'd all like to feel good with you.

The pattern is to outsource all North American jobs (and IP) to low cost centers in Asia and India...The North American worker is over priced, non productive and can be replaced for fractions of a penny. When it is all said and done the only thing that will be left in North America are the executives and their lackies.

I, for one, have to say I really like this turn around story. Mike Z. and his team should be applauded for their steadfast and driving commitment to the success of Nortel. I am completely convinced they, as a team, are wholly commited to achieving their goals and establishing this legacy for themselves and their careers.

This moves are exactly what is necessary to establish a going, successful enterprise that all who participate in it can be proud.

Mike and team, well done! Continue to keep up the good work! And finally, above all, THANK YOU for taking on this monumental challenge in the face of Nortel's history and continued criticism of all these nay-sayers!!

This executive team really needs to go. ZMAN makes all the decisions and his worker bees step on one another to prove who is better at saving pennies. The only vision is to keep cutting costs till they become profitable. Sad, really sad state of affairs.

Let's talk about the top of the food chain here...Zafirovski holds a B.A. in mathematics from Edinboro University in Pennsylvania where he also captained the intercollegiate soccer and swimming teams. In 2002, Edinboro University awarded Zafirovski with an honorary doctorate degree.

WTF! Have you even heard of a B.A. in Mathematics...is that for Retards who can't get a real degree....c'mon....then this no name so called University gives him an Honorary degree in Public Service (WTF is that?).

You get the picture....Z Man (or as put best by another blogger Mike and his Z-ombies) have the collective intellect of a FART. If you have shares worth anything (I know that's a joke) sell'em. Drive the shares down.....

The little man Richard Lowe (small brain) has continued his storied career of closing sites with this latest move. Don't believe any BS they are publishing about moving jobs to Home Based or relocated folks.....90% or more will be terminated. Escape! Get out....this people are all about rewarding incompentence (themselves)....Nortel is only recovering via layoffs and 1 time charges.

c'mon....don't folks have anything REAL to say about these scumbags?!!!??

I actually heard a rumour about Richardson being on the chop. It is amazing that Belleville is still hanging around.

hear that santa clara, rtp, montreal next.

The crosshairs, having accomplished their mission and now needing to find a new target, begin their sweep towards the next R&D facility employing less than 500 employees in some under-populated, high-cost facility situated in a high cost region of the country.

Look around folks and be objective. Are you and your colleagues in the crosshairs?

Another show of the fantastic turn around that Mike and the Z-ombies have accomplished. Maybe between the entire PV department getting outsourced and the 400 people in Calgary going away Mike will get himself a 30% raise next year instead of the pathetic 21.5% he got this year. Good job!

The closure of Nortel in Calgary shouldn't come as a surprise to anyone who works there. Talk of closure has been out there for years. This was not a question of if, it was only a question of when.