No Paycheck for You…Yet

Mike Z, after all the years you sucked undeserved bonuses and and outrageous salary...you have the nuts to pursue Nortel for 12 million. Wow while everyone else not sucking your you know waht got no bonus and no salary increase. I think you would sell your mom for a dollar...but chances are she knows you are a dick and would not come anywhere near you. Do yourself a favor, drop the law suit...once thing is for sure, no one will ever hire a turn coat like you. Take your money and shove it up your a$$.

Payroll in January included a completely seperate check for commisions just before filing...not sure why they had to do that or the reasons you would do that before filing...anyone know why?

They wanted to retain the loyalty of the sales force. Recall that throughout Nortel's tribulations, the sales force always got their commisions and "circle of excellence" trips and bonuses. The rest of the staff got no or partial bonuses in 2002, 2003, 2005.

What unprecedented "glitch" delayed their good employee's pay so soon after bankruptcy? What happened? Was it a software glitch, or a glitch with the bank? Was management's pay delayed as well?

With Nortel it is always worrying about what we do not know about and I question if they would have hit rock bottom had they been more forthcoming all along.

This high tech company seems to be plagued with low tech accounting problems.

Now. they are using the cash they have left to wind down run-away train operations that include payroll. One might indeed think provisions should have been prepared for well in advance as you say as their greatest priority.

They knew they would fold in September contrary to downplaying bankruptcy to fold a week later . Also claiming to have up to a year cash when they would have run out this Spring? No wonder CEO reiterated so many times he would not comment on 2009. We can almost bet on Chapter 7 where I question what severances will be paid.

Can you imagine all their employees walking out on them during this sensitive transition. Lets hope next weeks pay will arrive in a timely fashion.

Shareholder and Employee interests sure have suffered as management can do what ever it wants until inevitable consequence.

Bungling pay in their last days sounds so bad too.

Perhaps its a who cares attitude right across the board now than business as usual as they claimed. And then their are supplier amendments to be addressed by the 28th...

The obvious is overwhelming isn't it?.

As the spouse of a [still hangin' in there] Nortel employee, I have to say I'm speechless over this whole debacle. Granted, I'm but a lowly [local] government employee, who is serving the public rather than some good 'ole boy club's bottom line. . .but even I can see through this corporate double-speak.

What I'm seeing and hearing, both at home and all over the 'net, is a total lack of leadership - lots and lots of "management" but absolutely zero leadership. Examples?
- Joel Hackney, period. His after-hours antics alone, not to mention the fact that his "incident" occurred just after the rank and file had the infamous "ethics" crap rammed down their throats; they were actually told that if they didn't sign the ethics document, they'd be fired. Phhhffffft. His next act of heroic leadership? When asked if remaining employees should be looking for employment elsewhere, he responded with this gem: "If you're looking for another job, you're not doing what I need you to do, you're not focusing on what needs to be done, and if you're caught looking for another job, you'll be fired." Phhhffttt. And then he went on to play BS Bingo and basically told the remaining employees that if Nortel is going to emerge from this Chap 11, THEY (the employees, of course) had to step up and make it happen. Phhhhft, again.
- The whole severance package deception. 15 years of law enforcement and 50 years of life experience have confirmed that, most of the time, there's no such thing as a coincidence. Coincidence was it, that laid-off employees were told their severance pay would engage after 60 days - and the company filed for protection on the 59th day? Hmmmm - Phhhffft, yet again.

Bottom line - another instance of the confusion between "managing" and "Leading". You Lead people; you manage "things". Glad I'm just a lowly public servant who happens to work for a great organization who operates under the fundamentals of servant leadership. Hope to heck my spouse gets the hell out of Nortel and moves on to something more meaningful.

OzSkeptic, sounds like you are in law enforcement? I hope you work from the Attorney General, and report these crimes. (Or I hope someone has?) As you said, there are no accidents. These criminals willfully decided to use the employees' retirement savings and severances to pay for their incompetency and mistakes. The ZMan and the BOD need to pay for their crimes. The Canadaian government should pursue this like the US did with Enron and Worldcom.

I only wish I was - I think it would be interesting if someone knowledgeable in such matters researched the BOD's of Nortel, Enron, Worldcom, Sprint, GM, and any other entity whining about needing government handouts. One post I read summed it up nicely - if your senior management/BOD's ask for handouts, then they need to be fired. Isn't that what free enterprise is all about? Accountability, albeit fiscal accountability, for your actions? Screw up and you go broke - and I don't see it happenin' for the VP's and up. It's nice working for the tax payers instead of stock holders.

Ozskeptic, your spouse leaving NT WILL be the best thing that ever happens to him/her, careerwise.......true "leadership" departed NT over 15 years ago, and it has been a circus ever since.

I remember when I hired on with Northern Telecom in 1987 we got paid weekly well the funny thing was they lost my first 4 checks. Yes I know all about direct deposit but back then it was not a big thing and I was young. When I finally got a check it was huge or I thought it was since I started out at $7.50 an hour. It did not bother me to much but I owed everybody when I finally got a check. I feel got the folks now especially the ones living pay check to pay check.

I urge all employees to read the following story:
http://www.thestar.com/Business/article/571953

I quote the most relevant detail:
"Judge Geoffrey Morawetz of the Ontario Superior Court of Justice ordered that the company "shall be entitled but not required to pay" wages, salaries and employee benefits, as well as current service and special payments to pension plans."

"Shall be entitled but not required to pay???" We all know what that means. Even when this executive team has been obliged to tell the truth they have failed. Now they are not even required to pay anything to any employees! But of course I am sure they will continue to pay themselves large amounts!

This payroll delay was no glitch.

I got my paycheck !

Oh, sure go right ahead and buy some Cissyco stock with it. ;p

Appendix A of the E&Y 1st Monitor report listing of Forefast Cash Flow has a list of explanations for each expense. Item 5 (Payroll) explanation is as follows:
"Payroll disbursements consists of wages, vacation pay, source deductions, and sales commissions. Payroll costs have been ADJUSTED TO REFLECT ANTICIPATED WORKFORCE REDUCTIONS during the forecast period."

Ok, now we have it from the experts as reported to the bankruptcy court, that they anticipate massive layoff sometime between January 31st and Feb 7th payroll period.

Could it be that they may be divesting MEN or carrier thereby reducing their workforce ? Anyway you slice it, Nortel is a CF.

Help_Me - Most likely the uptick to $14.5M for payroll period Feb 8-14th include sales commissions that are paid once per month. Looking at the data as represented by E&Y, seems to me there is going to be massive lay-off between January 31st and Feb 7th.

The $7M payroll payment has 2 weeks period,not once per month.

Yes, that's why it's evident there will be some massive lay-offs or selling off of divisions soon. To go from a two week payroll of $24M in January to $7M for the same two weeks in February highlights the magnitude of the headcount cutback. I sincerely hope it's selling off of divisions to other companies so employees can keep a job and maybe the rest of us creditors can hopefully get a few cents on the dollar.

I think it is more valid to look at cash for payroll on a monthly basis rather than week-by-week. The numbers are:

Jan/09 - 47.8 Million
Feb/09 - 43.1 Million
Mar/09 - 40.9 Million

Clearly there are going to be headcount changes, but the major changes won't happen until the Plan of Reorganization is filed and approved by the courts.

If you look at the January numbers in Appendix A, you will see they only show 3 weeks in January, rather than the full 4 weeks. If they assigned zero to the week January 4 - 10 in the same way they assigned zero to the week January 18 -24, then your analysis is correct. But it begs the question what event leads them to accounting for half their payroll twice in January, but a 1/6 - 1/3 - 1/6 - 1/3 pattern in February and March??? Anybody know?

FYI, if you're recenlty laid off in the US, you'll likely find that Nortel hasn't determined what your termination date is. Whatever the termination date was in the severance package they gave you is no longer applicable, but they haven't figured out yet what the new termination date should be.

This has bearing on your 401K. You have to wait until 30 days after your termination date before you can roll your 401K into something else, e.g. an IRA, or maybe liquidate part of it for emergency cash.

Actually these management people are cold and cunny. The executives realized that the only thing holding most people in place was the severance package. There were also the challenges of a payment coming due and approximately $2 B shortage in the pension plan. The question was probably raise "how can we preserve the remaining cash for the executive parachutes and break up fees while avoiding our external obligations (little things like paying current employees, pension plans and severance packages)?" My suggestion to the remaining survivors is getting your resumes in places, get your network re-established, and start the interviewing process since the pension plan will be frozen until BK is resolved and you can bet Mike and the executive staff are not going to give out any more serverance packages. I wish you luck in the upcoming time.
Remember Mike and his henchmen (henchpeople?) have shown their true colors on how they value the employee (or should I say the "little people"). As an ex-Nortel employee I can tell you the outside is 2000% better then the environment you are currently in. There really are companies out there that do care about the employee (even in the current economic environment). From here on in while you serve your sentence at Nortel, do like the executives, give as little as possible and take as much as you can (legally - don't sink to Joel and Mike's level).
From my experience and what I saw, the employees from senior manager on down are some of the best in the business, unfortunately you didn't have executive management support that was of the same caliber.

On Ernst & Young's site, Monitor's Reports on the bottom of the 1st Report document, Appendix A shows the Nortel forecast payroll cash flow for the next 3 months:
http://documentcentre.eycan.com/Pages/Main.aspx...

I'm wondering why after 31-Jan-09 it changes from bi-weekly payments of about 24-23 to about 14 million plus about 7 million in between?

Help_me! Great observation on payroll projections. I am certain the bump up for Feb 8-14th includes commissions that are paid once per month. I think they are due to be paid on Feb 13th so my take is that there is going to be massive lay offs between Jan 31 and Feb 7th since Nortel pays up to date.

My guess is that it's related to the madcap firing spree the Z-boys intend to carry out within the next month now that they're no longer encumbered by severance packages for the rank and file.

Paragraph 115 of the same document also contains an interesting, but not unexpected, clause:

Notel has inciated that it believes a Key Employee Incentive Plan ("KEIP") should be established to retain key employees...Nortel also intends to develop a KEIP and seek approval of this Honorable Court of the proposed KEIP.

What a shock! What a surprise!

As I have said in earlier posts this chapter 11 filing - while Nortel still has $2.5 billion in the bank - reeks to high heaven as a criminal fraud perpetrated by the Z-boys to save their bloated pay packages while shafting stockholders, customers, bondholders and employees.

Just think of it. All the Z-boys now have between themselves and $2.5 billion are a few judges who probably know little, if anything, about telecom and can be easily bamboozled. Before chapter 11, at least in theory, they were beholding to bondholders, stockholders, customers, suppliers, the BOD, severance contracts, etc. Heck, they could probably care less about customers ripping out Nortel equipment, support calls being unanswered, etc., so long as they can keep this huge pot of money for doling out bonuses to themselves.

Thank you for this finding. The criminal desires of this executive have been exposed, once and for all, as UNDENIABLE FACTS as part of the Monitor's/Court documents.

This is not hearsay. These are not rumors. These are OFFICIALLY DOCUMENTED facts that the Nortel executive seeks to profit as much as possible off the downfall of the company!

While employees such as myself have had our contractually-promised severances removed due to the devious maneuvering of upper management in their bid to bring the company into bankruptcy, we see here that they FULLY INTEND to keep their outrageous pay and bonus at the expense of the hard working and loyal employees that they have abused and continue to mistreat.

Stand up people! Fight for your rights! Let the management team know that we will not stand idly by as they fleece Nortel of its remaining cash in order to enrich themselves, all while destroying the futures of thousands of employees that they have little to no care for!

Do you think it would be contractors? Two third of the total payroll?

the only explanation I can think of is that some areas of the company will switch to weekly payroll

Could it be in case of replacing regular full-time workers with contractors? Does it make sense?

Just highlights to me that the Executive management are totally incompetent. I dread to think whats next.

I'm sure all those employees who haven't been paid yet "Believed" they would get paid on time!!

Late Friday Nr. Ethics, Mike Z said although it was a technical glitch beyond Nortel's control, he takes full responsibility. That's it suckers, move on. He then blathers on about keeping focused and how he has spoke with all the vendors who are on his side. His message was that not a single vendor was concerned. Yah right. These Companies have to much on the line to buy into this BS. Everyone can guess what the CEO of say Verizon said after he hung up on him.

Not once to he apoloigize or mention the 1300 hundred people he screwed. This guy has no compassion along with no vision.
Personally I can't believe the USA people did not get paid? People's Motagage payments or whatever come out automatically. What a kick in the whatever.

I strongly suggest anyone still there that is not part of the clique, start looking for work before the economy totally tanks. This asshole is not looking out for you. He will screw you over without a blink of the eye.

Perhaps the restructuring only allows for ‘Five Sigma’? …-- bb

When will Nortel's board get tired of MikeZaf's empty assurances and put the bum out with his entire management team? These men are as inept at management as Dunn was corrupt!

Lean Six gizmos are indeed effective tools to silence dissenting opinions. If your numbers don't quite add up you need to shut up and work harder first, smarter second (pending approval), and let the charts work the magic.

It's a shame Mike Zafiro is still there!
He is a crook!
Let me tell you that once again
a crook
Go and look for my posts in last 5 years and you will find out I was always right.
So listen to that one
Mike Z is a crook!
examples
He said single digit growth in 2008! It was a lie!
He said $20 was a gift!
it was a lie!
He said margins improved!
It was a lie!
a lie, after a lie!

Yes, Ericsson and others are pursuing Nortel customers. Even more worrying for MikeZ and his sycophant executive team: customers are soliciting proposals from vendors to get rid of the Nortel equipment before they are caught with no support. I will not name any names, but the big carriers are not going to stand by and "hope" or "believe" in Nortel, they have to find a way to keep their business going. Publicly, carriers say they want Nortel to succeed. In the background, they have to find a way to get Nortel equipment out of their networks as soon as possible, or at least find a way to support it until they have something new.

IMHO there's less than a 50-50 chance that Nortel will pull out of chapter 11 as even a shell of its former self. Other than a few knick-knacks (e.g. Radware's possible purchase of Alteon) Cisco, Avaya, Ericsson, et al are simply not interested in purchasing any of Nortel's increasingly obsolete and irrelevant portfolios, even at fire sale prices. 3 years of neglecting product and business development to focus on Lean Six Sigma nonsense and start up "Centers of Excellence" have left their mark. Instead they're going to take advantage of the confusion and insecurity surrounding chapter 11 to concentrate even harder on taking out Nortel's remaining customers and channels. Also, I can tell you from personal experience that the severance plan was the ONLY link still keeping Nortel employees from looking for jobs outside the company. On top of an expected madcap firing spree affecting several thousands of employees in the coming month we can also expect a few thousand more to leave voluntarily for employment in a more stable company. The only thing preventing ALL from quitting now is the poor state of the overall economy. Most of the remaining will be more focused on polishing up their resumes and and going on interviews instead of answering customer calls, making sales visits, etc.

Anyways I doubt that reorgization and reemergence as a leaner company were the real reasons the GEnuises filed for chapter 11 protection. Zeroman and his toadies incompetence has become so obviously there was no chance that he would be able to suck out another 10 million dollar pay package this year, as he did last year in spite of continuing losses and layoffs and an 80% drop in stock price. At best he would get "only" his 1.2 million base salary - a decline of %88! The BOD might have even fired him in spite of the difficulty of finding a replacement. But under chapter 11 its a whole new ballgame. The GEniuses will apply for, and probably receive, Key Employee Incentive Plan (KEIP) retention bonuses under chapter 11. Heck, as part of KEIP they could even be awarded big golden parachute severance clauses after shafting the rank and file out of their own packages. Chapter 11 is the GEniuses best bet to continue extracting lavish pay from Nortel's remaining $2.5 billion.

I can't believe they would screw something like this up at the worst possible time!
There have to be checks and double-checks in the system to prevent those things from happening.
How did they pay on time previously, was that just by accident?
Is there another material weakness in finance department?
If someone doesn't lose their job over this one I don't know what they'd ever fire anyone for. Oh wait, Hackney is still there, isn't he?

People will recall when Joe Flanagan from Global Ops (8000+ employees) held a GIS some time ago when some top execs were fired, he told that he would refrain in making deep changes in his organization because he wanted to "better understand what to do". And that once he had a "plan", he would report this back to Pavi and Mr.Z. Well well well. The problem then was no money to pay severance packages. So they waited (and are still waiting) for "headcount attrition". So...the more they piss and scare the employees, better off they will be in their plan to save cash (Cash is king, leave the employees behind).

LOG:

The "not making deep changes" tactic is exactly what brought down Mr. Z and his GE cronnies. Look at how long did it take Mr. Z to get rid of the old blood? In fact, Richard Lowe, etc. are all still there. The new blood he brought in recommended broad and swift actions. But Mr. Z's GE training taught him and his GE cronnies to make sloooow changes. And it just took too long. The high tech telecom business moves much faster than the kinds of business that GE normally do.

Mr. BB

Mr. BB (do you have a license to use that name?),

Deep changes mean nothing; right changes is what the ‘world-classers’ missed. Everyone from Wall Street to Silicon Alley advised Nortel to divest its CDMA cash-cow when the timing was right and focus on synergistic Enterprise/MEN units. But, the one thing they don’t train you at GE is knowing when to ‘eat your young ones’. When innovation takes a century to complete (candles-to-light bulbs) it is difficult to appreciate Internet time (think dog years). We are witnessing its disconnection.

Which brings me to the most absurd thing of all; Jack and Suzy Welch commenting on ‘INOVATION’ (BW/CNBC). It’s like having George W talk about foreign policy. Fricking dangerously pathetic if not tragic!!!!....—The Real BB

Oh wait, Hackney is still there, isn't he?
reply edit reblog flag
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yes
You got it right!
Hackney is there
hackney will take over, the CEO!
That's is the Nortel's way!

Yeah, the management team claims it was a "glitch" and unrelated to the chapter 11 filing when they haven't had such a "glitch" in recent history.

How stupid do they think their employees and investors are???

Mark, why aren't the insiders dumping stock now? TD Waterhouse's INK Company Insider Report indicates NO insider trading. Don't you think that is strange?

There are ZERO optimists, rightfully so, on your site...so what's the point in going on. I have wasted hundreds of hours this past year, reading everything, and thinking about how to get some ROI from my Nortel shares. Analysts certainly couldn't be trusted. Chris U from TD was pumping the stock until the summer and even Mark Sue didn't become a turncoat until about a year ago. So, since the analysts were USELESS...I continued to buy...500 at $4.30 in Sep, then 1000 at $1.40...1000 at $.50 and finally another 1000 at $.31. So, I spent about another $4K to quadruple my ownership...thought if the knife could fall that fast it could also go up that fast...WRONG!!!! I wonder what the total investor Book value is that has been wiped out over the years....$50B at least...if people didn't buy at it's peak in 2000. So, maybe that's why the government needs to stimulate the economy...$50B in nortel investments EVAPORATED!!!!!!!!

Insiders aren't dumping stock because their stock is WORTHLESS! It would cost more in transaction/brokerage fees to dump this dog turd than to hang on to it.

The lack of an on time paycheck for US employees is just another example of how much the current executive team holds their employees in contempt. It's almost as if they hate them.

"Oh, you didn't get your paycheck? Don't worry, it's coming - in the mean time, keep working, and stop bothering us with meaningless questions."

It also serves as another example of how our loyalty has been continually abused. I truly feel sorry for the hard working and sincere, but misguided people who bought into this "I believe" campaign, only to see their loyalty tested yet again. Nortel is not a religion and I really wish management would stop treating their employees as if they were blind followers.

New poster here, and not sure if this is the appropriate place to post or not. I'm a current employee based in Richardson, TX (hence the nickname). Also not received my pay (although I have a paystub suitable for framing).

What's very interesting to me is that on January 8th, while rumors were circulating that Nortel would file for BK (and we were all in denial), 3 suits were walking our lab building on 2201 Lakeside Blvd going from the south 2nd floor stairwell leading up to the 3rd floor south. They were obviously business men, 2 being led by one, and I've never seen them before. One that was following said to the lead, "So, in 60 days, all of this will be open and we'll be able to see this area..." waving his hand to the offices and conference rooms immediately to the east. The one in the lead nodded and said "Yes, all of this will be..." as his voice trailed off.

Also interestingly enough, facilities and maintenance have suddenly taken to a lot of deferred maintenance, including a sometimes humorous leak from the 3rd floor to the 2nd floor into senior management offices. A leak that has persisted for close to 2 years and the solution until now has been to put a empty garbage pail under the leak and empty the pail throughout the day. I had overhead one of the maintenance guys during that same time as the suits were talking saying to another maintenace guy, "yeah, we're finally getting a roof guy to come out next week, like it matters now...".

Very curious events to be sure. Obviously given the turn of events I'm wondering if there's a plan to dispose of our facility sooner rather than later. I can't imagine the logistics short of a rapid shutdown for the Richardson campus. Of course this is all speculation and hearsay but I throw it out for what it's worth. Would be great if someone knows more about it could enlighten us all.

interesting to know... wondering if anyone else knows about this... I am sure your post got buried among the rest, specially since there have been lots of posts and this forum/blog doesn't really tell you where there are new posts nor lists them in chronological order

Nortel as the company they hate employees, they hate shareholders, they hate customers...
They don't care, they just hate!
You can search my posts in last 5 years.. they are just correct about Nortel, the biggest fraud ever, ever!
$400 bill fraud!

The biggest!

Desk Jockey - I couldnt have said it better. The worst part of the paycheck nightmare is that they pretend its "not their fault" - a total lack of taking responsibility and punishing the guilty is the status quo for NT