The New Nortel

All Conjecture here.
Let's totally forget about the past debacles and start from scratch given the current conditions at NT and in the economy.

Here is what Nortel Should Do-------->>>
Sell off CDMA
Cull management so there is only one manager per 100 people.
The rest of the middle management and management roles that are basically only there for show and to attend meetings--->>>>Gone.
Delegated Team Leaders assume group control.
They lead the team but they also work with the team so they know exactly how things are done, what to expect and the reality of what makes their LOB succeed and fail. People will work harder for people they really know in the trenches (example is the military) rather than for people they don't trust or don't "really know".
Team Leader reports directly to manager.
If all you can do is manage, you're gone.
No more secretaries or admininstration control for management.
Manager does it him or herself or somebody in the trenches does it.
Employees and Groups working on a project that isn't being funded enough, or funding will be cut back and or is not currently making revenue and has poor short term potential---->>> Gone ----> Except LTE.
No more CTO.
Negotiate hard with the Canadian government and "make them" see no other option but to work with NT subsidy wise, tax wise and investment wise.
Get rid of John Manley. Wasn't he there to help?
Increase marketing and sales expectations and put these people on a quota. You miss your quota or underperform----> Gone.
No bonuses for ANYBODY until company is out of debt.
This is how you compete and win in todays cut throat world of competition when the playing field is so uneventy stacked to begin with.

What NT will do----->
Keep their failed enterprise vision.
Keep shuffling managers around for the sake of keeping their job.
No news on the sale front.
3K to 5k layoffs between now and end of 09. Can't do more because they don't expect to have the money.
Keep sick sigma six and other programs that accomplish diddly squat.
Basically pretty well do the opposite of everything I listed that they should do.
Same old Nortel.
Same old Results.
Prove me Wrong.

I don’t agree with selling off the CDMA. If Nortel sells CDMA division they won't get any LTE business with Verizon.
Because of the installed CDMA network, Nortel is well positioned with Verizon for LTE. The switch to LTE won't happen overnight, Verizon will have to use current CDMA infrastructure and slowly upgrade it to LTE.

no wonder you are an ex-executive. well positioned means nothing. switch to LTE not overnight. ok when you are in a fight for your life, whay would you wait for something that may not even go your way and even if it does, it happens slowly.

this is life and death. all the long term planning should have been done with execution but since its not, its last until the next round or get knocked out now.

It will be anticlimatic and nothing earth shattering will be announced on Monday.
Most of the call will be focussed on Q3 result with Z blaming the slow enconomy.

- MEN can't be sold, Carrier Ethernet will be pushed to Enterprise and the rest merge into Carrier LOB. VP of MEN is gone to the waste side. Hackney continues to expand his empire.

- Laying off 10%-15% of workforce mostly in Services and Supports. Continue with the outsourcing strategy into Turkey, India and Mexico.

- Consodilate the labs in Ottawa to save cost.

Mike Z will find his last match and spark the last fire on the prairie.

Interesting that Nortel isn't scheduled (at least that I saw) for VoiceCon in SF, when Kaiser CIO (Nortel infrustructure) and Microsoft UC rep is going to be there? Seems odd, I know cost cutting is important but there are local folks (marketing and sales folks in San Jose) that could at least man a booth or talk to people.

And in reading the comments below, that they make take some drastic measures, I highly doubt they will if anything they just like to pick at the scab vs. make real change at least IMHO. I do think they will do the 3 to 5k layoffs but those will just be workers who's work will pile on to others that will be asked to work harder because "the real change is coming".

"...great continuing posts, from a sympathetic but clear-headed and realistic perspective."

Not sure that's really the case. Sounds more like bitter pessimism to me...most of the time anyway.

Just Iike those two bitter old geezer hatas on the Muppet Show, Waldorf and Statler.

http://www.youtube.com/watch?v=aH7j3nwfFqc&feat...

Hm. Exactly 30 years old, that. Objectively speaking I'd say its all part of that secular circular cyclical bear market.

This really proves that the GE formula didn't work and coming into a company making everyone believe that the existing employees were a bunch of monkeys and they were the gods.... proves them wrong... now the only piece of business (Enterprise) that has at least some type of potential will be destroyed by the "light bulb" expert. The last / remaining GE virus.

less than 6 months of life remaining.. tic tac

company to be split into 2 companies (carrier and enterprise) - Joel "Rocky" Hackney to run the Enterprise enterprise.

CTO, CSO, CMO, Chief of Sales, Services pres to step down (By the way all of them had been hired in the last 24-30 months)

much less number of layoffs as the whole number cant be afford in current fiscal year.

Mike Z to step down and CFO to be named CEO focused.

All execs to be given 24 months severance despite short tenure. What about pensions of 25 year employees.

Potential scenario on Monday:

- 3,000 to 5,000 layoffs accrued in 2008, Second wave of 3,000 in 2009. 2,000 jobs to be shipped overseas
- 50% of 2nd level executives roles will be eliminated
- MZ Cabinet members to step down: Head of Sales, CMO, Services President, CSO, CTO, Operations to be split in 2, dramatic reduction in finance, HR and other support functions (i.e.: Six Sigma/quality)
- Creation of two business divisions, Enterprise and Carrier. Each of them as independent business units, including sales, operations, services and R&D.
- Sales Regions to be combined, existing some countries
- 10% - 15% sales force reduction in NA
- MEN, Wireless and Carrier wireline for sale.
- Nortel Government Solutions for sale.
-2008 outlook: revenue down by 10% compared to 2007.
- Book to bill ratio: 0.5
- Cash position very weak....$2.0B+
- Carrier R&D reduced to maintenance level only. No new products/development.

Lets see which ones I've got right.

1,500 Layoffs, want 3,500 but don't have cash. CMO, Services President and CTO are gone. Enterprise and Carrier business units. Major cuts to sales and operations teams.

Eric Krapf has never demonstrated a grasp of the networking business.

As for the new Nortel, not a single executive at Nortel has a clue about what Nortel's future business strategy, model, structure, or business plan implementation must incorporate. There won't be a new Nortel until it goes into bankruptcy.

Monday will just be an announcement of more layoffs with more meaningless platitudes about new directions. No only will there not be any meaningful announcements, the Executive management team won't even cut their salaries and refuse any bonuses and restricted stock grants. Mike Z will simply downsize until there is no more cash on hand to pay his salary. Nortel is definitely demonstrating what happens when a company finds itself six sigma from the norm in terms of the effects of bad management.

Krapf's comment about John Roese's brilliance was quite humorous. The one time Cabletron SE has demolished Nortel's ability to fund, develop and release products, but he is able to parrot the word 'Hyperconnectivity" on demand.

You are probably one hundred percent right.
Bloated, overpaid management at all levels, admin, SG&A, (and all the clowns who stay in their particular untouchable cliques by doing such things as priming the volunteer position at charity events and entering trycycle reghattas), will keep their jobs while in reality they contribute nothing. The ones who do the real work will have their pay frozen, while the shell game of anxiety continues for them and remain unappreciated. Nothing will change at Nortel on Monday. I would like to be wrong. I doubt I will be wrong.

LOL exnt... I laughed.

"On the other hand, as this columnist notes, the Metro Ethernet business was a crown jewel of the Nortel portfolio, while Enterprise faces a crowded, consolidating field dominated by two monster players--Cisco and Microsoft--that look to dominate the core business of enterprise communications for the foreseeable future."

"If Nortel ends up being sold off in pieces, the enterprise business could do worse than going the way of Avaya--winding up in the hands of private equity and embarking on a rigorous program of cost-cutting and refocusing. Up against the likes of Cisco and Microsoft, Avaya isn't guaranteed success or even survival, and Nortel wouldn't be, either."

___________________________________________________________


It was polite not to emphasize the low margins Nortel's Enterprise business generates as is.

Mr. Roese was praised and I am sure Nortel has many, many, many incredibly great people working for this incredibly, incredibly, incredibly bad company. =) How many have left or are leaving is also disheartening. Great thoughts on a taxpayer bailout here too as an empirical no go. Notrhing mentioned on their very sustainability but I guess that wasn't the point albeit exponentially more pressing I would imagine.

So......if enterprise won't save them, what's next? Would it have been better to sell Enterprise than MENs as one analyst preferred seeing?

How about inventing fast and huge computer optical storage devices with their slush or idle R&D hobby farm. Solar powered cars? Maybe an antigravity machine using compressing gases with all their hot air on hyperconactivity =) Enron boasted broadband demand too, investment to losses in India, picked the interior colors of their private jets, another had coffee budget issues too, but Nortel is the first using a green screen, is this the best they can do now. =)

I dunno, maybe they should have taken all that cash they printed and bought McDonalds franchises or invested their pensions into government bonds than equities..

What can or will Nortel do now it its very best light. What can they possibly do, for debate sake as core business crumbles around them ? Or is this another make me a prophet and I will makes us a profit scenario yet again in the abyss of the unknown, in anticipartion of Nortel's next plan, ...wait, what plan.... =)

The message Im hearing from management is "dont expect too many changes" which is a real worry. I think those at the top arent interested in running a small shop and will continue to run Nortel as they do today but with less and less staff.

if they do head down this road its bad news as we are already spread thin.


Oh....and something else, lets hope they get rid of those moron blackbelts, they are a waste of space

Eric Krapf: "In recent years, one of the real contributions Nortel has made in advancing the conversation about communications has been its framing of the issue of "hyperconnectivity," which was most powerfully advocated by the company's brilliant CTO, John Roese."

Credibility gone!

Ditto! I was reading and agreeing with the author until he got to "brilliant" then all the bullshit buzzers in my brain went off.

I agree. Has this person seen Roese speak? Nevertheless, "hyperconnectivity" is nothing more than a mere buzzword, spouted off by the same PR/marketing types who like to say that we sell "solutions" and not "products". Well what the heck is a solution if it is not a product?

The article itself was going along fine, but the one line about the brilliance of the CTO causes it to derail into a horrible crash of credibility, turning it into more of a sidelining cheerleader disaster.