The Facts About Nortel

By Mark Evans | Published: January 15, 2009

Network World put together a good FAQ that answers some of the obvious questions about what the bankruptcy filing means.

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  • Cataractus

    I have grave doubts that Nortel will ever emerge out of Chapter 11. The problems are more profound than excessive debt. The Zeroman and his toadies have not pursued (or at least competently pursued) any business development since they took over the company. Zafirovski and crew have rarely stepped beyond their Lean Six Sigma/cost cutting/centers of excellence comforrt zone. As a result Nortel's portfolio, e.g. CDMA, is becoming increasingly obselete and irrelevant. Nortel has a real problem with nothing coming down the pipe to replace a rapidly aging product portfolio.

  • Casual_Observer

    Great point. As an employee, I always felt this was the critical issue. It became a battle of growth versus cost control and in the GE management style, cost control always won. The bankruptcy filing is another form of controlling cost GE style. Nortel probably won't emerge from chapter 11 unless they can change their management style and get back to growth over cost control. Given the state of the economy, and further issues of the banking crisis that are only now starting to come to the surface, I'd say its highly unlikely Nortel will survive unless they get a bailout from the Canadian government. From what I've seen, the bankruptcy filing looks like a way to hold the Canadian government and Ottawa hostage.

  • NortelMania

    On a side note, Ernst and Young have recommended to keep AIP (annual incentive plan) and a new Key Employee Incentive Plan (KEIP) which would be used to fill executive's pockets and the deserving employee gets peanuts. Another of day light robbery from the “Top Management”

  • Still_waiting

    Link Please.

  • http://nortelinsider.wordpress.com/ Desk Jockey

    Is this true? Can you provide a source? Not that I don't doubt you – the GEniuses have robbed Nortel while simultaneously driving it into the ground. Shame on them, except this seems to be something they're incapable of, just like managing.

  • Cataractus

    No suprise here. Only a couple of weeks ago I didn't believe that Zeroman and Hacker would risk their bloated pay packages on bankruptcy proceedings. But obviously I calculated this the wrong way. As it turns out they figured that premature bankruptcy was best way to ensure that the absolute maximum amount of Nortel's remaining 2.5 billion will find its way into executive pay and perks. Even after stiffing employees out of their meager severance pay, I wouldn't put it past them to wrangle an excellent golden parachute package from these post bankruptcy AIPs and KEIPs.

  • Still_waiting

    Found the link – http://documentcentre.eycan.com/Pages/Overview…. .
    This site contains public documents related to the Canadian CCAA proceedings of Nortel. It is buried under Public documents then under the Monitor Report.

  • NortelTragedy

    Hackney – the guy running Enterprise who slapped the young girl in the parking lot after a NC basketball game in 2007 – is under 40. He has no experience in building and maintaining a customer or channel base. He's a manager – and not a very good one at that – not a leader. Lowe, Mike Z, they're all the same. Wanna-be leaders. They didn't build the build, only tore it down.

    Executive management needs to go. And no parachutes. They need to be fired with no severance like the thousands of employees and their families are experiencing right now.

  • hangingin

    With Nortel bankrupt and laid off employees losing their life savings and homes how is Zafirovski still allowed to use the expensive corporate jet to commute back and forth from his home in Chicago and Toronto? This is the ultimate in arrogance and greed. Check out http://www.flightaware.com tail number CFNNT.

  • felixmk

    You forgot his frequent flights to his alma mater, Edinboro University. Check it out.

  • felixmk

    Good catch. This KEIP mentioned in the bankruptcy docs is definitely a “line the pockets of MikeZ and cronies” plan. Meanwhile, the people who built this company are denied severance, pension, and benefits.

  • Another_Nortel_Watcher

    Ok, now I'm REALLY disgusted with this guy and with the board for not firing him. This is as bad as the heads of failed financial institutions using bailout money to award themselves bonuses. This is WORSE than the auto execs flying to D.C. to ask for help (worse because Nortel has already failed).

    To all of you who 'believe', do you 'believe' it's a good thing for this incompetent CEO to spend YOUR severance packages and YOUR pensions to fly himself to and from work in a corporate jet? Why do you not object? Why do we not see protests on the news?

  • underling

    The preliminary report filed by Ernst & Young on Jan 14/09 recommended the establishment of a Key Employee Incentive Plan (KEIP), as well as the retention of ongoing Annual Incentive Plans (AIP). The report subsequently filed on February 5, 2009 by E&Y confirms that Nortel intends to continue with its AIP, but does not mention the KEIP. Does anyone know if the KEIP was approved, and if so, what the criteria are for being considered a “Key” employee?

  • underling

    The preliminary report filed by Ernst & Young on Jan 14/09 recommended the establishment of a Key Employee Incentive Plan (KEIP), as well as the retention of ongoing Annual Incentive Plans (AIP). The report subsequently filed on February 5, 2009 by E&Y confirms that Nortel intends to continue with its AIP, but does not mention the KEIP. Does anyone know if the KEIP was approved, and if so, what the criteria are for being considered a “Key” employee?

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