Should Ottawa Save Nortel?

Nortel to my knowledge still invests heavily in R&D in Canada and this loss alone could stifle future inovation and technological growth in Canada. Canada needs to invest more heavily in technology and high tech instead of relying mainly on natural resources. Any company in Canada providing this much employment will be difficult to recover and should be given a hand under these crazy times.

Canada would rather concentrate, focus and spend their money on putting up duplicate signs in french for every sign in english in keeping with our official bilingualism policy. It doesn't matter if 7 or 8 of every ten who see the signs can't make out the one in french and only understand the english one.
That's true canadian innovation at its finest.
LoL.

Ottawa save Nortel....as an employee, I would not feel right if they did. The position we are currently in (I think they call it the event horizon) is due to soooo many factors that it is best to let it die - naturally. If amputation can occur to the point where a viable piece is left - great - go at it.
BTW - no small thanks to the back-stabbing/praise-toting/2 faced Canadian media over the past 9 years. I am sure that there will journalism courses focused on Nortel coverage from 1990 to 2010 some day.

I can hear the final headlines now...."Nortel, beleaguered by accounting scandals and the depressed Global economy finally passed away this week....."

BeenThereDunnThat,

As someone who used to report on Nortel, your comment about the media is arguably over the top. Yes, it was overly-bullish during the telecom boom but you'd be hard-pressed to find anyone writing any negative stories during that period about any company.

As for the "back-stabbing", explain what you mean. Nortel has been easy to criticize in recent years because it's been struggling strategically and financially. As far as I can tell, the media has just reported the facts.

As far as journalism courses, what about one looking at coverage on Nortel, Enron, Wall St. analysts, etc.? Now, that would be interesting.

Mark

Mark - in rethinking my post, I would change the phrase "back-stabbing" to "manic". The Canadian media accelerated Nortel's climb and fall - did not cause it, but clearly assisted it. You know as well as I do that news and rumors move the market.

As a Canadian employee, the media coverage over the past 10 years has been substantial...family members comment on the "new contract" one day, then ask if the announced layoffs are going to affect me the next.

My American (and assuming global) counterparts have lived through the same hell, but the media involvement was drastically reduced. You can call the Canadian media coverage factual if you want, because it was based on Nortel releases and analysts opinions....you get my point.
As for a course on Nortel, Enron, Wall St. analysts....you bet...I hope that newbie MBAs around the world learn from the mistakes made. I hope that Joe Public sees through the crap next time as well.

Eli - thanks for you comment. As an employee, what would I benefit from a government bail-out? A couple years of further employment? What would the media coverage be like...."Nortel posts a 1 cent per share profit this quarter. After adjustment for the government bailout it is.negative..." We would be tagged with the bail-out moniker for the next 10 year period. The government did not cause this situation, and as a taxpayer as well, should not bail it out. Can't we blame this on the American economy and bad financial practices? Shouldn't the American banking system bail us out? Does not make sense.

I want the company to succeed...on its own...by good decisions and direction....not a hand-out.

Let's remember this about the media.
They are basically left wing.
That in itself has alot of connotations.

Yes, that is true.

Remember, reality has a well-known liberal bias.

How could an employee of Nortel NOT want the government to bail them out.
That is the stupidest thing I've read on here and there is alot of far out unrealistic B.S on this blog.

Maybe because they are using their head, i.e. reason and logic.
Maybe they think the bailout is wrong because it's giving money to management that doesn't deserve it. But at the same time they have a conflict of interest because it would directly benefit them as well.
Maybe because they have a conscious.

Contrary to what you say it is not the "stupidest thing" ever posted on this blog, especially since your comment has graced it

Like "Still Rootin" I too do not consider Nortel a technology leader in the SMB phone system space. Their products like the BCM50 and BCM450 do not offer features and functionality like mobile twinning, built-in VPN's, carrier SIP trunking compatibility, and simple things like simultaneous caller ID name and number on the display of the telephone set.

Nortel also burnt a lot of bridges with Canada by stating under Roth and Dunn that they would leave Canada for the US due to taxes.

Burned bridges in Canada??
Are you kidding me.
We are talking about the Canadian Government here.
They will give a terrorist (arar) 10 million bucks.
They will import all kinds of undocumented illegal immigrants and give them refugee and welfare status.
They will waste billions on official bilingualism, multiculturalism, special interest groups and what have you.
And you say Dunn and Roth burned bridges?
LoL.
Another lame comment.
****ing unbelievable.

The only thing burning is the flame war you are trying to ignite.

Go away, troll. There are no bridges to hide under here.

Canada should not save Nortel unless it makes major changes that benefit Canadian tax payers

- create and move jobs to Canada instead of offshoring
- all new research and innovation is in Canada
- investment in next generation for skills
- subsidies for Canadian corps buying Nortel similar to China and Huawei
- executive compensation is tied to company performance

Unless this happens its free money that will not change anything. It will only procastinate the inevitable and we will be right here again in a year or two.

I agree with these comments so long as it involves Nortel and not everyone else which is kind of what exnt2 is saying.

Nortel should save itself and get more helps from any regions and any governments.

Hi all, my first foray into 'allaboutnortel' discussions .....!
I find the NP article interesting in the most subtle of ways ..... While the author qualifies his 1980's innovation example with specific examples (digital pabx), he fails - very visibly - to identidy similar examples for the decades that follows, opting instead to use the very generalised, 'broadbrush' approach: '....through the 2000’s when Nortel made massive leaps in fibre optic, wireless, and data networking technologies .....'.

So here's a somewhat controversial theory ... Withouting trying to offend, or otherwise undermine, the excellent workforce (-and incredibly loyal, which goes unmentioned) that Nortel has my contention is that Nortel's oft quoted 'engine of innovation' is a myth - and therein lies its problems ....
Nortel can quite rightly point to the 1980's - and the arrival of the digital pbx - as a pivotal moment in history of telecomms. But what innovations have appeared since?
I certainly would not put 'Nortel' and 'innovation' in the same sentence when it comes to Wireless, Data - or even Fiber Optics.
The term innovation gets trivialised - particularly in the last decade - but many of the Nortel advancements in Fiber Optics were in fact incremental improvements that, if anything, leveraged the innovations of others in component technologies. Selling a box that is smaller, faster and cheaper is not neccessarily an innovation - even though in the hyper-competitive telecoms domain they were often touted as just that ....
Nortel lost the plot once thye world of 'bellheads' was reluctantly passed to the 'netheads' ... Nortel made all the right moves in terms of articulating the seismic change (remember John Roth's 'Right Hand Turn' email), and making the right acquisitions (Bay Networks) but absolutely and definitively failed when it came to making the required culture change .... Having bought Bay Networks Nortel should have ensured that the Bay 'IP Centric' culture permeated through every part of Nortel ... Instead, it was totally overwhelmed by an outdated, weary, 'voice centric' culture that absolutely refused to acknowledge the changes that were happening in the world .... Nortel were still trying to convince enterprise customers that the future was 'ATM centric' when it was blatantly obvious that ATM was on the road to oblivion ....
Nortel has been plagued with making wrong bets ... Even in recent months Nortel has shifted (I am told) R&D funds to LTE rather than WiMax; has watched PBT take a pounding - and is now opting to sell of key businesses while trying to make an impact in the enterprise space ....
Sadly, the best thing that could happen to Nortel now is for it to be acquired, and the Canadian Government would be foolish to interven if such events unfolded ...

Still Rootin'

Still Rootin'

It was "Right Angle Turn". I would also argue that nortel made a seriously wrong move acquiring bay networks. Bay was a complete mess with the former Synoptics folks (left coast) at war with the east coast Wellfleet. The only think that kept any kind of civility was David House. Bay was in shambles when nortel bought them and they did not do their homework.

I agree with you that nortel was arrogant about it's ability to manage acquisitions, but not all the acquisitions were very well vetted either.

I also agree that nortel could articulate the coming change but was woefully bad at dealing with it and managing it. I could tell you tales of wasteful spending and self servicing management boondoggles and technical arrogance that would curl your hair.

Still Rootin,

Thanks for joining the conversation. It's always good to see people offering insight and solid commentary.

Mark

If Ottawa didn't come to the rescue before when NT had a much bigger payroll, what is the point of doing it now that it is 1/3 the size it was in 2000? I say let the chips fall where they may so that NT exits this troublesome period leaner and with down-to-earth salaries for those remaining.

{/Soapbox} - [11% of the people who voted above say "May Be" - What the heck... [I have a pet peeve about the "Undecideds"] - what is up with you people? Cant you make up your mind and have an opinion? Even if it is wrong? The same "category" of folks are screwing with the US Elections... ]
{/end Soapbox}

EXNT - Please dont confuse being a Canadian company with keeping all the jobs in Canada. One glance at the global economy should tell you that having employees in "those other" countries is what makes it possible for Nortel to compete with the likes of Huawei etc and stand up to the revenue pressures.

I am all for having a Canadian majority in the cabinet and board to drive Nortel to become a great company.... but any good cabinet/board will end up doing the same thing - outsource and offshore what they can to keep costs low.

Sorry bud.. that is reality of todays world.

"Maybe" doesn't mean "undecided", it means "only under certain specific conditions." I would not vote an unconditional "yes" or "no" without understanding more detail, otherwise I might be mistaken for a Nortel cabinet member.

If what you said is the reality of todays world, then let nortel face the reality to survive itself

Anger issues? Check.
Anonymity of the Internet? Check.
Sensibility? FAIL.

this from a guy with the name fuc_nt
ha

Any group that considers bailing out Nortel should ONLY consider it if it comes with some level of control so that the board can be overhauled and the cabinet flushed. Otherwise, nothing will change - it will just take longer to fail.

Nortel is run by a bunch of Americans: CEO, CTO, CMO, Chairman, Pres Enterprise, Pres Admin, VP Operations, etc. etc. These are all highly paid newcomers who ran the company into the ground. Aside from that, they moved many jobs to India, China, and Turkey to save money. The smart thing would be for the Canadian govt to wait for bankruptcy, then re-float the company as an innovative truly Canadian company with better management.

Actually exnt,

Roth and Dunn and the other fired execs - Canadians, all had a lot to do with nortels present circumstances, don't you agree?

I am not defending zafirofski and his minions, but fair is fair.

Canada should rescue Nortel. It has a lot more to lose if Nortel goes under i.e. economy of Ottawa will take a serious tank (even beyond where things are now with the credit crisis)....

Clearly a blank check is not the answer. Govt. of Canada should take 2-3 seats on the board to make sure that the cabinet and the "new direction" is scrubbed.

The company is the People. Nortel has good People and technology - just needs the right direction and leadership.

Countries such as India, Vietnam, Russia, China should save Nortel because they have more people employed at Nortel than Canadians

Good point but that would be counter to the naive, pathetic Canadian way of doing things..that is..taking care of everyone but your own!!
Ask john manley about that.

Sorry, the quality of work leaves a lot to be desired.

You get what you pay for.
India, China, Turkey, Mehico..the list goes on.

Oh Really? Look at Indian companies, they have grown ro rapidly. Do you know why? When Canadians were leaving office at 5 PM and enjoying their off days, and holidays (and there are sooooo many), Indians were working hard to reach where they are today.

Still you guys dont get it? That way, in few years either you will have to register at Indian employement exchange.... or go back to Qubec to cut wood.

Wake up guys, stop playing superiors. Go back to hard and intellegent work. If you havnt yet learnt that from Indians, it is high time you start on that.

There's a big difference between work ETHIC and work QUALITY. I think to some extent it could be argued that some IT workers in North America and Europe have a sense of entitlement to their jobs, while workers in regions like India and China work that much harder because they crave their new jobs so much. But over time, regardless of culture, there is the possibility of entitlement to creep into any employee once that sense of being given a big break falls away. But this is all rather moot, as there are many high quality output workers that may have a poor track record for "burning the midnight oil".

Sorry Gayle, but i would have to raise Clint's hand on this one. The fact that they stay in the office past 5PM doesn't have any positive effect on quality of their work. It would be negative if anything. If you consider reviewing some of their code and having to rip it all out and write it all again, well that doesn't seem to be too cost effective after all. I'm gonna go a step further and say that NT could be the way it is because its decision to outsource so much. I think it was a bad decision on the management. Working hard is great, but sometimes you need to invest to get the right resources.

Should the goverment also have a say in how or who runs Nortel then?

Throwing more money at Nortel is not the answer. This company has bigger problems. Look at the past 5 years. It wasn't money issue. Poor decision and half baked ideas are what caused Nortel to be in the position it is in.

Is Nortel really a Canadian company these days? All I see is people being laid off in Canada and jobs being created in China. The Canadian government should take a hint from Obama and only support Nortel if they stop outsourcing jobs. Why should Canadians support jobs being created in China???

NT is as Canadian as American.
It was the same situation with JDSU
Now JDSU is in US.
NT has already sold its HQ in Brampton, has it not?
What if NT chops all the wood which IBM does not want and here you go.... Mark Evans' rumor can become true!
I don't know how long it would take..
The price is low, 12 Cents pre split
When I predicted 99 cents takeover in 2004 shareholders wanted to kill me.
Today its 12 cents and they would be happy to get IBM shares.
There is not much sense in the guessing games before Nov 10
Price does not matter for any one anymore
I will stay silent to the Q3 CC
bye

"I will stay silent to the Q3 CC"

Good riddance. Until the 10th.