Being critical of the job that Nortel CEO Mike Zafirovski and his senior manager team have done over the past three years is an easy target, mostly because hindsight is 20/20 and it’s far easier to criticize when you’re on the outside looking in.
But after listening to Zafirovski’s speech last week to the troops, one thing that cropped up is whether all the strategizing and maneuvering is a moot point? Think about it, Nortel has come a long way in the past three years in recovering from an accounting scandal, streamlining operations, selling non-core business units, and pursuing a new strategic course.
Only time will tell if all these efforts bear fruit but Nortel’s future may also be out of the hands of Nortel’s executives and employees. No matter how many right decisions are made, the economic and competitive landscape may be difficult for Nortel to overcome.
Doing business in the telecom equipment market is tough – competition is fierce and, arguably, there’s too much of it; margins are tight, and customers are being cautious after going through a long period of being pragmatic.
To succeed, you need to be a well-oiled, focused machine with the products in the right place at the right time. That’s a tall order for any company, especially one competing in the telecom equipment market.
That said, I’m hoping Nortel survives and somehow thrives. It’s a company that has been already for more than 100 years, it has a long history of innovation, and employs thousands of Canadians, many of them within the R&D ranks.
Call me an optimist but I’m also a realist so we’ll see how things transpire.
Nortel and her JV have many talents with very good dedication, capabilities and potentials, but I feel Nortel limit them with fixed position but does not unleash them with various challenges and reward.
The process can secure the past, but only the people with vatality can strive for the future.
more
Lehman Brothers also prospered for 100+ years before being driven into bankruptcy by careless management.
Nortelhand
Guys,
The Nortel has good stuff, and really innovative people. Perhaps selling the bread and butter product line of the company could have been put off, but that is history. Now Nortel is in a crisis of confidence with its customers; Customers are afraid that Nortel will not exist in the next few years. This is very real and is a major factor in deciding who will win a contract. If the client is worried that the vendor will not exist in the coming years, they will NEVER go on a limb and purchase the product.
The best option for employees and shareholders alike is the sale of Nortel, and this needs to be engineered as soon as possible. The more Nortel continues to show losses Q after Q, the more the value of the asset is diminished. If Norte was in the hands of a company that could instill confidence in the clients, sales would pick up and the company (or division at that point) would be profitable. Nortel has the people and products, what it lacks is credibility with the clients and prospective clients.
less
I wonder: Are there any Nortel fans out there defending Nortel beyond the convenience of their cubicle desktops (that Nortel provides), perhaps emulating Europe's Rebel Clown Army (look it up) and following Frank Dunn around in their free time, chanting "Thanks, Frank" and waving their butts and farting at him?
A Close Observer
sickofAAN,
The AAN blog is a good place where the issues can be aired, and people can share their opinion on them. I've been associated with NT, in one capacity or another, for over 20 years. Most of that time has been good. But you would be less than intellectually honest if you couldn't admit that the last few years have been bad for NT.
Frank Dunn's accounting shenanigans came at almost the exact wrong moment for NT - just as the rest of the industry was consolidating. NT had to be inwardly focused during this period. By the time NT emerged from cleaning up its balance sheet, the changes had past it by, and NT was left the sick man of the industry - it doesn't have the economies of scale of Ericsson, NSN or ALU, and it doesn't have the low costs competitive capabilities of Huawei. It's caught in a vice between these two realities.
Further, NT is spread too thin. It no longer has the critical mass to effectively invest (i.e., to maintain the 1 or 2 position) in R&D in the many segments in which it participates.
Last, one can have a genuine debate about the effectiveness of Mike Z and his management regime. They were dealt a bad hand, BUT don't appear to have been effective in dealing with it. I'm a big fan of GE's management, but Z's cost-side focus of the business is only ever going to help eek out a little profitability, it won't materially impact NT's ability to innovate and grow. Given NT's size and the competitive dynamics of the industry, Mike Z's team has been slow to acknowledge that it must shrink and focus to grow. And given how long they've dallied, it's legitimate question to ask to which segment of the industry they can now refocus into and lead.
So, sickofAAN, if you're going to pick on this blog, you might as well trash all of those financial blogs/forums where frustrated NT investors (a NT investor is a frustrated investor) and employees can exchange information, thoughts and opinions.
sickofAAN
Nice to see a post that isn't COMPLETELY negative for once. If I had to pick a single person who has done the most to put Nortel down, point out its flaws, totally mock its successes and completely deflate company morale it would be you. Nice to see that occasionally you remember that there are real live people behind Nortel and the effort to keep it alive.
Well, there hasn't been an awful lot to be positive about. By the way, love the moniker.
Have a good one!
Mark
exnt2
Mark
you might want to change to something else. being associated with something negative will only make you and the blog appear negative.
as you rightly put it, there is not much positive to talk about. who cares about the negative.
yes4aapl
If I had to pick a single person who has done the most to put Nortel down, point out its flaws, totally mock its successes and completely deflate company morale it would be you.
----------
re
In my opinion it's investors who desert Nt stock and don't want to pay for a share more than 15 Cents pre split
Why don't investors hold their shares tight for the future?
Nortel used to dilute the stock each year to the tune of $500 mil to finance the business; it was just like printing new paper.
Try to do it now!
haha
Investors don't accept new shares and sell off old shares with a loss
The institutions holding NT stock lost billions on that investment in just few last years.
Analysts try to assess Nortel's value and the numbers Nortel has been reporting quarter after quarter are just disappointing.
Let's continue the blame games.
Analysts downgrade NT stock to the $2 targets
Investors sell off their investments with loss based on the downgrades.
Nortel has no access to cash because stock has no value.
So Mike Z decided to sell the best assets with discount just to continue paying salaries and bonuses for managers.
3 years of Mike Z failures and he is very proud of that.
http://www.youtube.com/watch?v=YzfWcH7rP3w that video is old but current situation at Mike Z as CEO is a hundred time worse than it was at J Roth
Tongue.In.Cheek
Careful Mark, with posts like this you will get the label of: "Stalking Multi-ID Pumper". ;-)
If Nortel chooses Unified Communications as their market focus, I am good with that but can also see that they would likely need to make some software acquisitions to round out the portfolio.
What If It’s Not Enough?
Being critical of the job that Nortel CEO Mike Zafirovski and his senior manager team have done over the past three years is an easy target, mostly because hindsight is 20/20 and it’s far easier to criticize when you’re on the outside looking in.
But after listening to Zafirovski’s speech last week to the troops, one thing that cropped up is whether all the strategizing and maneuvering is a moot point? Think about it, Nortel has come a long way in the past three years in recovering from an accounting scandal, streamlining operations, selling non-core business units, and pursuing a new strategic course.
Only time will tell if all these efforts bear fruit but Nortel’s future may also be out of the hands of Nortel’s executives and employees. No matter how many right decisions are made, the economic and competitive landscape may be difficult for Nortel to overcome.
Doing business in the telecom equipment market is tough – competition is fierce and, arguably, there’s too much of it; margins are tight, and customers are being cautious after going through a long period of being pragmatic.
To succeed, you need to be a well-oiled, focused machine with the products in the right place at the right time. That’s a tall order for any company, especially one competing in the telecom equipment market.
That said, I’m hoping Nortel survives and somehow thrives. It’s a company that has been already for more than 100 years, it has a long history of innovation, and employs thousands of Canadians, many of them within the R&D ranks.
Call me an optimist but I’m also a realist so we’ll see how things transpire.
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