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    Where’s the Media Coverage?

    By Mark Evans | October 30, 2008

    You know what’s mysteriously missing from the Nortel landscape these days? It’s solid newspaper and/or magazine coverage of what’s happening and could happen?

    This is a story chock-a-block with drama - major strategic decisions on the horizon, the potential sale of a multi-billion asset, thousand of possible job cuts, and a crumbling stock.

    You would expect an enterprising reporter would have lots of material to write a story offering insight and perspective about what’s going and what’s next for Nortel.

    Where are the stories examining Mike Zafirovski’s three-year tenure as CEO, and whether he’s done a good job under the circumstances, or destroyed Nortel? Where are the stories examining Nortel’s strategic options, and whether a focus on enterprise, services and software can be Nortel’s salvation?

    The only reason that none of this coverage exists yet is there may be a case of Nortel fatigue, or perhaps everyone’s waiting until Nortel announces something definitive.

    Update: It was brought to my attention that Canadian Business’ Andrew Wahl has a story looking at Nortel in the Nov. 10th edition.

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    Viewing 28 Comments

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      Nortel is reorganizing itself into "bite size pieces" at this time. It is grouping each business with related functions like R&D, product management, sales, marketing, accounting. This will allow other companies to buy businesses individually. In doing this, many people will be shown the door. Nortel as we knew it is history.
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      Zeroman has zero strategic view and he pushed away the "old" Nortel guys that were giving him advice to where to take the company forward, instead he relied on people whose experience were building washing machines and light bulbs. That is why Nortel failed to make any significant acquisitions in 3 years or even divest business. The UMTS sell and the Router company acquisition done during the first 12 months were decisions taken by the previous administration, who he delayed for 8 months once on board. The failed acquisition of 3Com, Avaya and Siemens Ent are also a demonstration of inability to make a strategic decision to bulk up the enterprise business t compensate the downsize of the CDMA business which was the cash fuel of the firm.

      While all this was happening, the cost cutting measures of sending people overseas have resulted in a disaster, it might have lowered the costs but the quality and customer satisfaction went to the floor.

      Six Sigma was brought as the miracle pill, an antidote that would cure everything, but on the contrary it had delayed key critical decisions that had to be made, as well as developed so many black belts who are working on silly projects with meaningless contributions. It killed the creativity of the company, the innovation engine.

      It is a very sad story that in less than 8 months will be forgotten or probably recalled in some business books as a lesson learn of Don'ts.

      Why do we have to believe that the key decisions made or to be made in the past 30 days / next 30 days will dramatically change the fate of the company when having 36 months all the decisions take took this company to this actual situation, plus what aggravates it more is that to believe that the same leadership team will make the miracle happen?

      Unfortunately NT is brain dead and the clock started ticking tic-toc-tic-toc... only 180 days of life remaining.
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      The Left Behind,

      You have hit the nail on the head. Mike Z has killed this company. It needed fixing, but not the heart taken out. Mike Z is a major moron!!!
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      Roese is in empire building mode. anyone, is this true?
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      Roese is a pompous moron who has never done anything but talk. Unfortunately Mike Z actually listens to him because he tells him what he wants to hear. ie. We can be number 1 in LTE and Wimax.
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      An empire requires an emperor. Is Roese an emperor? Perhaps. Nero was also an emperor.
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      of cards
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      About three years ago, when Zeroman came on board and employee asked him at a townhall when the cost cutting would end with a focus on profitability and growth. His response was it will happen as part of his turnaround plan.

      Three years later we are still waiting to see a great play out of a GE / Motorola playbook. Nothing yet. Maybe the style of play has changed, or its not as effective or the team cannot do what their coach ask them to do.

      I dont think its fair to blame everything on past management. Ownes got it to a point where the scandals were taken care off, set the timeline for sareholder lawsuits and got the books back to respectability. After that it has been Z's undoing.

      As Biden rhetoric about Obama 'the world will test him in 6 months'. The same can be said about Z, and he has failed Nortel, its shareholders, customers and employees miserably. A CEO is supposed to have foresight, oversee strategy, make decisions and be accountable. Blaming it on past management, economy etc. only shows Zero accountability. How can you hold layers of management accountable, when the top guy himself is not.
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      I'm not certain that anyone else at the helm would or could have played the hand that was dealt to Mike Z any differently. Many of Nortel's problems and the global economic crisis were sowed between 2001 and 2005 due to the largest amount of credit/debt creation in the history of time. They are now being , for lack of a better term, reaped. Nortel may well be the first to go down but it won't be last. My guess is they wil likely emerge as a smaller player when all is said and done.
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      I have to disagree slightly with your synopsis.
      This is North America. Canada lives beside the most powerful nation on the face of the earth. Look at America. The government gives a trillion dollar buyout and now a secondary package is coming for people who can't pay their mortgage, in one form or another, there is help coming to them. After the huge government bailout the american dollar goes through the roof. Its like all the americans have to do is print money when they want and nobody..not even chairman mao..will call them in on their debt. Here we have Canada, chock full of natural wealth, with its crown jewel called Nortel. North America should just give the middle finger to chairman mao and the rest of the world. We print how much money we want, and we take care of ourselves first. Mike and the BOD are asleep at the switch.
      You are right on one thing, they have no choice but to be a smaller player now of less than 5k without immediate intervention by the government due to what has already transpired under consecutive CEO's the BOD and lack of interest/sympathy from the canadian government.
      I think you are going to see revolts from the common people of North America sick and tired of losing their jobs and sick and tired of dumb ass executives and wall street making mindless decisions so they can line their pockets with more cash. The election of obama is the beginning of the "fighting back" from North Americans.
      If harper gets his way he will also watch out for the people of Canada first, not countries abroad. This is the way it should be.
      We need nationalism back in North America before undesireables beat us down more.
      Mark it.
      Take that to the bank.
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      the US dollar went up not because of the bailout but because the american dollar was getting pulled out globally. this led to a spike in us dollar demand which sent it up. the us dollar will go down again after a few months once commodities start rising again.

      RIM is probably the crown jewel right now. So is biotech. For natural wealth yes agreed but the bureaucrats in government are not smart enough to realize that they sell natural resources dirt cheap only to buy finished goods from it, at a much higher price. iron ore to steel. crude to gas. potash to fertilizer.

      smart governments keep the wealth within the country by getting companies setup processing, manufacturing to create jobs. one could argue its expensive. yes but not for the country producing it if it subsidizes its own taxpayers. thats what china does.

      as an analogy, you will only make pennies on a garage sale. thats how the resources are being packaged off here. otherwise which country in the world would have its citizens pay 20-30% more for gas that comes from its own soil.
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      Someone bettter warn all businesses, then, that were formed and perhaps even flourished betwen 2001 and today that it was all a fluke, basically, and that they should follow Nortel leads and go green, or go under.

      And that taking business away from others is irresponsible, even unethical, in these times of the largest debt creation in the history of time.

      I dunno, every time I read about fair play and solomonic wisdom, I wonder why professional sports teams play for points and profit anymore, and why fans would support and cheer their favs. Its so, well, mean. If anything, sports fans should look at the numbers only to rally around and support the worst teams. Right?
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      Go Green or Go under.
      It is too laugh.
      David Suzuki, Dions carbon tax plan.
      Two losers with no perception of reality.
      You are right though in that taking jobs away from North Americans to send them somewhere else is unethical and irresponsible and we're coming back to fight it.
      Sports and Hollywood. Entertainment for Suckers.
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      Excuse me? Anyone who understood the markets that Nortel plays in could have played the hand far differently. That person wouldn't have hired other cabinet members who didn't understand Nortel's business and that person would have managed a much better balance between efficiency and growth.

      Mike Z has floundered for 3 years because he's like a cab driver with the windshield painted black, He doesn't know where he's going.
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      When Mike Z came to the helm, he brought along a word that he said he would use to decide which businesses within Nortel would get invested in and which wouldn't: "Relevant". My view is that none of Nortel's businesses are relevant today. So news coverage of an irrelevant company would be, well — irrelevant.

      Beyond that, it's a sad story. It had some drama when it was sort of a Canadian Enron. It had some hope when Bill Owens injected some sorely-needed integrity. It had intrigue when "The Garys" were plotting to clean the place up and the senior Gary said that God told him he should become CEO. Hope sprung eternal in the human breast when the Jack Welch acolyte came to the rescue in 2005. Many of us just shook our head when that acolyte failed to fire Joel Hackney for unethical behavior. We didn't even have the energy to shake our head when Hackney was appointed president of Enterprise, something that had zero rational basis.

      It's not a story anymore. It's pathetic. The only possible story will be the further agony visited on thousands of people in November when the axe will fall yet again. The question then will be: who are the lucky ones — the ones who get fired or the ones who are selected to stay?

      Back to relevance... If Nortel were to completely close the doors tomorrow and somehow customers magically got replacement equipment, would anyone know the difference?
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      emmgee,

      Great comment - insightful, honest and insightful.

      Thanks for swinging by!

      Mark
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      Double insightful
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      And it makes me wonder, too - is it better for me to be on the list of pink slips, or is it better for me that I stay here?
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      Thanks for directing your readers to the column, Mark. Your comment re. fatigue is accurate. Everyone is waiting for real news as of the Nov. financial release, if not sooner. And on balance with all the other very bad business news out there, Nortel's long-running tale of woe seems like an old story.
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      I think most view it like the bush presidency; tragic but over.
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      Sadly, I agree.
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      If MikeZ would just start spouting "Hope" and "Change we need" I guarantee that the press will fall in love with him, and the evening news will start with his story each evening.
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      Sure that Nortel is deadly wounded but not dead yet.
      3 bill in assets is a lot of money. Nortel can use it for suing professional analysts. We on this blog post mostly for the entertainment. We are not bond by any requirement.
      We feel the freedom to speculate in any direction.
      by saying that I proud myself not to cross the line.
      example
      after Q2 CC I estimated by just simple math calculations that Nortel has to do more job cuts. As I remember I estimated 4000 new job cuts. Let me correct that number today. Knowing more about that I estimate today that Nortel needs to cut 6500 asap plus the MEN div should go. (I guess the total would be around 8500)
      So yes, Mark. You are just perfectly right that media don't talk about Nortel. Why?
      Why public does not dig into Nortel's cash or NT stock shareprice?
      Why CEO is so delusional that he predicted $20 was a gift! Why he could not predict declining revenues for 2008 or new job cuts coming? What he is able to do? What he is good for? It's a public company! NT stock lost its qualities looong time ago. I don/t even care about NT stock anymore. last $500 mill would drop in a week or 2.
      Someone will lose that, all $500 mill market cap we see today!
      What if it is just an average Joe who will lose?
      How Mike Z can increase shareholder value for Joe?
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      How would you write a story along these ideas Mark?

      I personally think the Software and Services story would be very interesting as it applies to others in the market beyond Nortel. It would draw Avaya, Cisco, Microsoft and IBM (at least) into the story especially with SOA, Web Services and Unified Communications becoming hot industry topics.

      No doubt we will see numerous stories during the week of Nov. 10.
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      I'd probably go at the story from two perspectives:

      1. What are the prospects for the new strategic direction? Will a small, more focused Nortel be more competitive and profitable? Who would its competitors be, and how big is the market opportunity?

      2. A look at Mike Z. How well has he done over the past three years? What has he done right; what has he done wrong? What does he need to do going forward to get Nortel back on the right track. Given Nortel's troubles in recent years, Mike Z. has arguably not been scrutinized too much so if would offer some perspective on whether he's done or a good or bad job.
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      Mark, you should put together an article on this, (if you have time) if not on your blog then for another site, I've seen some of your articles elsewhere.
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      Mark,

      i like #2, somebody has to stand up and put the whole story in perspective and get a final performance valuation... "the transformation will take 3 to 5 years...." we are certainly on the 3rd year... "Business Made Simple".... "BIG"... "renewed leadership team"... "Execution".... "recreate a great company".... "Forceful Optimism"... "Say/Do".... all phrases that in retrospective are beginning to sound interesting.
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      Mark, while Nortel "fatigue" may be a factor, I think most analysts are simply waiting for official word about the new direction of the company. Let's face it, most analyst views on Nortel have been wrong in past years, and when you toss in the rather unpredictable world market conditions right now, it's just a big coin flip when these folks make predictions. I think maybe they're more worried about being wrong again, and would just prefer to digest whatever the next restructuring looks like.
     
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