Nortel’s Margins Expected to Improve

TiC,

Nothing wrong with Roese, only the position he holds. A CTO needs to be an informed and well-rounded Evangelist, which he is not (due to his lack of both Wireless and Telecom experience). He’s also too hardware-centric and talks-the-talk but hasn’t walked-the-walk on software. His insistence on MIMO-only WiMax may have potentially cost Nortel billions in revenues. That is exactly what happens when the
uninitiated rule. Sadly, we may never know what the number might have been (billions) but we definitely know what it will be – zero!

The right Software Architect would understand the concept of ‘Telecom Virtualization’ and create an architecture that both supports the many platforms and abstracts users from their inherent complexities. These guys are out there and I know a couple of great ones.

bb

Tired,

You don’t work for the National Security Agency so STOP listening and START implementing!!!! Btw, I’m pretty Tired too of seeing a once-great company and the only hope the market had against Borg being decimated by processes instead of creativity. I hate Cisco, and you should too, so do something about it!

--bb

"Where do you work New Blue?
Are you and your team patenting cold fusion or how the human brain can transmit viewable images to a monitor?"

Ex-Nortel. Had enough and left. And your quoted commentary is an excellent example of the mindset that is bringing Nortel down: Innovation? Don't need it. Vision? Can't sell vision.

Nortel should begin looking into cold fusion -- telecomm cold fusion. Instead, Nortel is still smacking steel and Clint...er, flint to get a spark. Meanwhile, the rest of the telecomm industry is looking to deliver the future. Clint and Nortel are stuck in the ancient past.

Take your pom-poms and exit stage left, Clint.

BB - I'm listening, and thanks for offering critical commentary and intelligent suggestions while staying above the fray. It's appreciated by myself and I'm sure many silent others.

I've been hearing from guys at my former location of employ that, while the site long ago met its official quota of layoffs, theres really not enough work coming down the pipe now, today, for management to justify retaining all of them through the fourth quarter.

A bunch of contractors are supposedly getting the boot. The good folks training their IBM colleagues to replace them are next - all pretty much off the record.

Clint appears to believe that the legacy equipment Nortel shipped abroad will come back because the foreigners suck at it, and the fresh, young, new blue hires all full of vim and vigor will set it right back up.

So,again, if i were sitting here with extra cash begat from a generous severance package and looking to invest it, would I trust MIke Z's prophecies, the analysts' words, the word on the street or all of the above, you know: "Trust. But verify".

ANW

My comments about Hackney and Riedel (related) to his boss; word for word:

“Unfortunately and somewhat unfairly, Mr. Hackney’s parking lot experience will precede him wherever he goes and, as such, he will not be taken as a credible leader nor would he make an effective Nortel ambassador. Besides, I think he is much better suited as a supply-chain guy (processes/inbound) as opposed to a product line guy (customers/outbound).”

"And while we are at it let’s give credit for the strength in the enterprise business where it really belongs: George Riedel. Nortel had no viable enterprise business or strategy before his arrival. That was one of your better hires. Too bad he is not paired up with an enterprise rock star; if he were you may even see triple digit growth in that space."

See, it's not ALL negative :) but still no one is listening...-- bb

So many clowns on here..so full of S**T.
We have yes4appl..a noted nortel basher, predicting 3k to 5k in layoffs this year.
Mark my words he says..mark him with a bullseye maybe.
This known nortel basher fails to mention nortel is always hiring new grads and they outpace the departures of people laid off.
Sure North America isn't growing like india, china, mexico, or turkey. But those places are falling on their faces fast and there will be a rebound effect.
Then we have New Blue.
Where do you work New Blue?
Are you and your team patenting cold fusion or how the human brain can transmit viewable images to a monitor?
Give me a break.
With friends like him, who needs enemies.
Another Crock.
Unless any of you suckups have a vested interest in nortel or work there your opinion really means diddly. If you left or got sacked, move on and do something useful.
At least admit your past involvement, current involvment or what is to be gained by your
B.S.
This is just a board for ranting.
The title said Nortel Margins expected to improve and most of the posts below are from crybabies.
If you want to slam the place at least give a reason why.
I know I would.
Talk is cheap, but unsubstantiated talk that is just intent on bashing is even cheaper.
Speak from a personal experience or STFU.
You bore me.

BB - Nine excellent suggestions. i can't get behind #3 because Morin is needed where he is and his expertise - although broader than Roese's - is not broad enough for a CTO role. I think John Roese would make a nice Senior Manager of R&D somewhere. I don't see the track record or leadership skills that equate to VP. But I'm on the outside... maybe people inside would like to comment.

As for your list...

11. Offer Richard Lowe a retirement package. He doesn't know his market, he can't attract high caliber people, and his business is tanking. He's the George Bush of Nortel.

12. If you must keep him, get Hackney back into an operations role - quick! He may be able to go toe-to-toe with any generic plant manager (or young woman) on the planet, but he cannot go toe-to-toe with his equivalents in Cisco. And you can bet that Charlie Giancarlo is cleaning house at Avaya and installing execs who know the enterprise business. Strong personalities in positions of leadership who don't know the business tend to drive away the people the business needs the most. Mike Z / Joel H = John Scully.

August 18, 2008

What's the next big technology decision [John Roese]?

""The next big one isn't about plumbing.
I joke that the converged market is a trillion dollars and let's say, conservatively, only 5 per cent of that market is spent on communications enabling the application experience.."

Thats funny how?

From the November 20-December 3, 2006 issue of Canadian Business magazine

"For now, though, it looks like the damage control worked. Several analyst reports the morning after, including one from Umiastowski, struck a more positive tone. Maybe it was the Mike Z. charm. As the event wound down, Zafirovski grew weary of sparring with analysts and joked, "So are we ready for happy hour?" Analysts and investors would likely respond heartily, "Any time now." "

"Mike joked about Nortels future?"
"He's American, dear."

"Mike Z accused - is twisted and lacks basic human integrity. . False accusations, malicious, fabricated stories should not have a place here."

Its called gallows humor, and it fits perfectly into the sad situation many people still working at Nortel are experiencing daily.

But, shoot, "humor" rhymes with "tumor". Ick.

There were lots of wise advices on this blog but somehow some comments become useless. However, this is the only outlet for the investor community (along with Nortel BuzzBoard). There is justified frustration with the current management ability to turn NT around. Come on, 18 World class leaders with 3 years chances and still Nortel is in trouble. These execs are not cutting any slack for their own employees with more layoffs, why not we treat them the same way. 3 years, isn't it enough?

BB: I would never reccomend Morin for a CTO. Isn't his skills and experience only focused on Long Haul Optical market (despite his revival of the Metro Business)?. Wasn't he part of the long delays in transitioning fund from the ailing LH market to Metro ( after he spent 100s of Mills on HDX) ?. Despite his attempts to catch up, I think he too did got his chances. However, I agree, relative to all his peers, he looks the best.

TOC, you made a lot of sense. Some filtering is needed in this blog (just like John Roes's)

"when Mike Z gets directly accused of setting off a sprinkler system so that he can put his employees in direct harm and so that he can fire more of them, is twisted and lacks basic human integrity"

Does this include: Americans repeatedly tricked Canadians into hiring them and in 3 years ruined what took Canadians 100 years to build and nurture. Americans don't know from culture.

Nah.

Posting suggestions are a good idea but this blog has had several great suggestions from many of its insightful readers but, to date none have been implemented. As per Tired’s and TIC's suggestion here are a few that were presented to Nortel’s CEO in a yet unpublished ‘Open Letter’ format. I assure it will not change anything:

1. Make peace with Riedel – Obviously, he is still MiA, so admit that either one of you or both of you made a mistake. George is the only true strategist Nortel has had during the past decade but is too much of a team payer. A strategist needs to be a lot more forceful to be effective (‘my way or the highway’). Cisco won because Listwin wasn’t putting up with no-sayers, including Chambers.
2. Move John Roese into a VP/R&D; as a CTO he is making everyone at Nortel out of touch w/reality. In addition, his only previous experience was a 14-year span at an enterprise company that managed to end-up with two names: Cabletron and Enterasys. The mini stint at Broadcom isn’t even enough to measure as background radiation. Move him into a position he can help you with!
3. Make Phillip Morin CTO; he has Telco/carrier experience and is still sticking by you.
4. Break the little bank you have a hire a top software architect out Google, Apple, MSFT or even IBM. The way to Cisco’s heels is software (theirs sucks) and not some ‘Global Campaign du Jour’.
5. Stop using 80s lingo (‘world-class’; ‘high-impact’; ‘forcefully-optimistic’, etc.); it makes you sound out of touch and transparent. Use your own words and not the canned ones that require water…
6. Spend some time with Nolle, Dzubeck, Passmore, etc. They can back up their egos, your boys can’t. And you will find out what you don’t know from folks that are not afraid to tell you the truth. Yours are!
7. Stop using Orwellian lingo (lower-cost geographies) and call it what it is! We understand it has to be done but not at the expense of out intelligence and/or your integrity. Remember, your OWN words.
8. Hire marketing people that know more than the marketing process; folks that would help you develop a badly-missing vision. And stop putting out meaningless press releases, no one reads them. Get all that on video, the only positive thing I have seen lately (probably suggested by a young developer, I am certain).
9. Stop focusing on the pennies while missing the dollars. But, if you insist, start travelling coach – you like to say that you lead by example.
10. Have balls and sell the wireless unit to a private equity firm - WiMax, LTE, 4G, etc.; too little too late.

Cheers -- bb

BB - thanks for your 10 suggestions as now we can have a realistic discussion/debate. I have a few general comments on your notes:

I personally like John Roese and the Evangelist role he plays. The Evangelist role is important and I'm OK with the CTO holding that function. Work he has done to consolidate R&D so that various development efforts can be re-used across multiple products is good. Where I have concern is the next level down at the Product Management group. I question if they are working together or working in silos with different agendas. For instance, I think Nortel has far too many voice platforms to be really effective in the next phase of communications being based on Unified Communications and Communications Enabled Applications.

I fundamentally agree with your suggestion to hire a top notch Software Architect/Leader. Nortel has done reasonably well with technical software embedded in machines. However, I am concerned on if they can translate that into effective software used across many users on their desktops for day-to-day functions.

On the Press Releases, one constant of late is to have customer quotes as part of the Press Release. I'm OK with this however I think they can improve on how they get these messages out to other interested businesses so that they can hear directly from their peers in their respective industries.

BB - my original post was not specifically aimed at you only, but yes, you were in my scope. My frustration is based on many comments from many different threads I've read on this board, and I truly do believe that there are many people here who absolutely would dance all over Nortel's ashes if they could (see the thread about why Nortel's doing video as an example). So I respectfully disagree with you on that point. However, I do agree with just about everything else you said in your last comment. I intend no disrespect to you as an individual, or to anyone else, I just would like to see comments stay above the level of childish rants, which I believe that many people can't seem to help but hurl over the wall. Cheers.

More to what Tired said ...

I enjoy reading ewll thought out posts about Nortel even if they challenge Nortel's current direction. It would be great to see some of these posts to also include suggestions on what else could be done, rather than taking the normal posture of - it's Nortel, therefore it must be wrong.

What frustrates me the most are the clearly fabricated stories that lead to false accusations against Nortel people. Sure some of posts of this nature are intended to by funny but when Mike Z gets directly accused of setting off a sprinkler system so that he can put his employees in direct harm and so that he can fire more of them, is twisted and lacks basic human integrity. Do you honestly think a CEO would do something so malicious to potentially cause harm to the company's employees?

When we have thee kinds of posts on this blog it decreases the value of the blog. False accusations should not have a place here.

Tired,

As long as I have been reading and posting on this blog I have never gotten the impression that anyone here want s Nortel to fail. I think you have failed to appreciate that when there are negative references about Nortel, they are directed at the management team and not Nortel - the company - and its many talented and hard-working employees.

No one wants to see anyone fail but success requires more than just ‘hopes’; it requires solid vision, first rate go-to-market strategy and flawless execution none of which have been demonstrated by the current world-classers. And trust me when I say this: some of us have tried extremely hard to help them but their GE-bunker mentality has no room for anything that did not originate at GE. So, as annoying as the truth is, perhaps changing the truth should take precedence over silencing the critics, which they themselves created. When leadership fails it needs to hone-up to it! These are rookie mistakes and it doesn’t take an ‘all seeing telecom prophet’ to point them out, but thanks for the complement anyway. -- bb

OK...I for one would like to see Nortel start their rise from the ashes. I admit it. I have friends who still work there and I'd like to see them succeed.

Having said that, how is that going to happen? What's the plan? More Six Sigma? More Karate exp...um, excuse me...black belts? More outsourcing and trimming of the NA work force?

Unless something changes in the way Nortel does business in the telecomm industry, and so far nothing of any real substance has changed, Nortel is going to bounce along the bottom of the barrel and never rise to be a dependable, solid investment.

There is no vision -- there simply isn't! It's all more of the same, just more and more -- of the same! It's all the same guys making all the same decisions. Someone with a real telecomm business acumen needs to take the helm from "Z", throw out all of "Z"'s cronies and put in place some real telecomm execs (especially in the CTO's office), put the architects back to work and hold them accountable, and get back to the business of building innovative solutions, not for today's networking infrastructure, but for tomorrow's.

There's a saying about doing the same thing over and over but expecting a different outcome each time...it might be one of the definitions for insanity.

And so again begins more near-childish comments from people who can't make a rational statement without inserting some school-bully style insult into their speech. I'm not commenting here about whether which analysts are right and which are wrong, or whether Nortel can succeed or not. I'm just commenting that some of you folks (and we all know who you are) have such a clear anti-Nortel agenda that no matter what the news, it cannot be good, simply because you're the all-seeing telecom prophet. I, at least for one, sincerely hope that Nortel can begin to deliver on its promises and hopes, despite failing to do so for so many years in the past. After all, these are real jobs and real people at Nortel we're talking about folks, and real businesses with real people behind them that depend on Nortel and other companies like it.

Deferred, shemferred; who gives a flying diddle. Nortel has no growth plans; it has a prayer and a hope only. Bunch of mechanics that couldn’t drive their way out of a wet paper bag. No vision, no strategy and only miniscule execution; not the stuff to write home about…World class? Which world? Certainly not telecom’s. --bb

How many times we have heard, “Nortel’s margins expected to improve”? That song has gotten real old. The Nortel team headed by Mike Z has taken Nortel from a +$20 to a +5 stock in just a few months. Have you/we noticed how Mike Z and the team are saying nothing about this? Have you notice they never tell us why and when it is expected to improve? Mike and the team have butchered the company, driven most if not all the analysts that use to pump Nortel off or into Hold or Sell ratings. I for one think they are doing nothing but lining their pockets as they kill this company.

No one should be so stupid to believe Margins Improved;. after Q2 2008 CC.
Mike Z reported better margins, so why the loss tripled?
Answer is simple, deferred revenues improved margins.
How much deferred revenues Nortel will use in 2008?
I don't care, as Nortel is not clear about deferred revenues. No one knows what they are and where they are from? I remember that restatements pushed revenues into deferred revenue charts; as much as $3.5 bill+. Is NT improving current margins by recognizing revenues from the years 2000-2004,5?
One sure thing is that Nortel lied about single digit growth in 2008.
Yes lied. Analysts wanted Mike Z to admit that. Nope, he thinks he is smart by lying!
How Nortel business can grow if new orders decline with high speed?
In Q2 2008 new orders declined 25%
In Q3 we don't see any big orders at all. Nortel lost in China, Nortel lost in Vietnam, lets see if Nortel can get anything from BT or Verizon, or Sprint, or BSNL $7 bill contract....
Why Nortel thinks its OK to fool new investors into believing that Nortel is growing?
Just look at the job cuts!
It's been always true that NT's real revenues were in relation to employment!
100k employees and $30 bill in revenue
30 k employees and $10 bill in revenue
and the job cuts are not finished yet.
In Q4 2008 Nortel will have to cut yet another 3-5 k !
That's just simple math and simple logic.
You can mark my words.

You guys are so full of crap. Take one point: deferred revenue. I suppose NT is NEVER supposed to recognize the revenue and profit? Get real. You don't want them to recognize the revenue now and you didn't want them to recognize the revenue then...you REALLY just don't NT to be able to EVER recognize anything. You're just a bunch of whiners.

You guys are so full of crap.
Frank Burch
==========
re
Read the tread Frank Burch
It was just 3 months ago when you beliebved in single digit growth and in deferred revenues improving operational margins... that was crap not my posts!
You craped here a lot man.
Today you posted more realistic view, I would say you turned around. What about a simple apology?
btw. I said that Mike Z looked frozen long time ago. you call him a deer in the headlights.
I asked why did you pump NT stock 3 months ago. It would mislead new investors?
today you just admitted that investors are screwed.
you said today
Everybody's has gotten their way, except for the shareholders. it's been a real screw job. They hammered the shareholders so badly that now it's all coming...
What will you say today about good posts on the Bear side which you tried to bash?
i said 3 months ago
Look at new orders!
Why don't you know how to sell with profit?
What will you do next?
Ch11 and get zero for common shareholders?
Is it funny for you?
Is it funny for you to cut so many jobs?
Why Mike Z did not sell NT loong time ago with premium? It would be around $50 a share.
Why BOD does not do anything to take care of common shareholders?
I know why.
Because it's Nortel!

I don't care where the deferred revenues come from, just say so.
How much deferred revenues NT recognized from the years of restatements lately?
OH, you won't tell us. Your posts are here. Anyone can read them.
If you are so knowledgeable, why you are so wrong all the time?
I don't want to suggest here anything about you!
And just answer one simple question
If new orders declined so much how Nortel can trumpet single digit growth this year?
How?
just because deferred revenues?
Analysts rejected your approach to accounting after Q2 2008. You know that!
Look at NT stock!
Stop misleading investors, public, me, my family and my friends!
It's not funny if Nortel's fools new investors!
look at NT's chart!
Look at new orders!
Why don't you know how to sell with profit?
What will you do next?
Ch11 and get zero for common shareholders?
Is it funny for you?
Is it funny for you to cut so many jobs?
Why Mike Z did not sell NT loong time ago with premium? It would be around $50 a share.
Why BOD does not do anything to take care of common shareholders?
I know why.
Because it's Nortel!