A Troubling Communications Gap

Here's an idea — send more Z-mails filled to the brim with bullzhit and buzzwords like “world class, lean-and-mean, low-cost-center, and return to profitability” peppered between nonsense gibberish filler fodder.

Moral of the story: don't trust anyone. Especially Nortel management.

I'll bet theres not a day that goes by there without yet another by now all too familiar rumor of imminent layoffs wandering the halls.

Not even the (formerly) reliable sources should have much of a clue as to whats going to happen in the coming weeks, days, even hours to come because the brass is likley huddliing around the corporate dictionary looking for any last buzzwords they'd overlooked thus far.

Six months ago this would've been a more symbolic gesture to make, but with cash running out their salaries are starting add up to real money.

But what to do with it? Acquire a startup? Keep the paying customers happy? Times run out, taking another 18 months to “restructure” is way too long,

Its highly probable that MZ is not a part of the plan (from the creditors POV) for the rebuilding process. It would be unwise to not change leadership at this time.

The BOD will probably be dissolved as well, as they have no purpose (with no equity stake). It would be interesting to see the list of creditors (at least major) and find out what they want to do with us.

The grounding of the corporate jet probably had more to do with a change of who is in charge. If Mike is sitting in Chicago at his home now, chances are he is not part of any plan going forward. He might be CEO on paper but I’m guessing bond holders along with private equity (i.e. Blackstone) will start cleaning up the company before its pieced off for sale. The problem is in this market Nortel won’t even get 50 cents on the dollar. Customers, suppliers and vendors will manage their risk of dealing with Nortel as well. This won’t bode well for anyone who wants to buy the assets since many companies were after Nortel’s channel and global footprint. Basically the value for any buyer keeps declining as Nortel keeps losing customers. At this point, the only thing that may be worth buying are any patents or intellectual property. What a fine mess.

where can we read about the melon bank's similar past deals? could you post a link?

thanks

Wake up Mike – you are losing employee's confidence even faster than the cash. Alot of us are walking around like zombies right now. We are trying to continue contributing in our daily jobs and to make this work, but it is hard to stay focused not knowing what next week will hold. Ripping away severance has made many people panic. Alot of people are agonizing over their personal plan B instead of doing their job for Nortel. If you re-instate severance, you will get many people back on-board.

You also need to allow the business units to start talking realistically to the employees about the next month, quarter, year, and what we are going to do going forward. If you have a plan for each area – share it. If you don't – then tell us that. If you plan to leave staffing alone in certain areas – then tell us that, so we can keep going and concrentrate on doing our Nortel jobs. If you expect major cuts in certain areas, then be honest and tell us that too.

Enterprise voice customers are going to disappear at an incredible rate if we do not show them the future direction of the organization. This doubt will single-handedly kill our voice business better than anything our competitors could do to us.

Right now the silence is deafening….

this bailout issue must have been talked before bankruptcy announcement between Nortel and the Government, considering its close ties. I think the bailout duty is given Melon Bank, cause if it doesn't, the bank will get nothing from Nortel. I am not sure butmay be the Melon bank and Government can act together.

This is a good survey for ANN. “if you are an employee, are you actively looking for employment elsewhere? “

This is absolutely bang on. Meridian, I have no idea who you are or where you work, but it's amazing that people in different countries, in different business units, different demographics can all share the exact same sentiment.

True LEADERSHIP shows itself, shines and perseveres when the going gets really tough and it involves total communication transparency with its Rank ‘n File. Sadly, Nortel has been both leaderless and rudderless during the past decade, even more so during the past 3 years…–bb

The list of creditors and associated amounts owing are listed in docket #2 (PDF page #12) on the epiq systems website. Docket #3 lists all of the First Day Motions. There is a lot of information on this site that can help explain what is happening.

http://chapter11.epiqsystems.com/docket/docketl…

Google “Mellon Bank Bankruptcy”. You'll find at least a few cases of Mellon Bank debtors filing for bankruptcy. Mellon Bank does a lot of calculated risk commercial lending. This is their market niche. So although its unfortunate for them to have a borrower go bankrupt and is certainly not their plan A, they understand that its a risk of their business and they're accustomed to executing plan B to attempt to get their money repaid .

thank you very much.

My guess is that Mikey is groveling to keep his job, or to get a big fat golden parachute for himself or KEIP bonus or some combination thereof. As a secondary objective he's likely calculting how many thousands of rank and file to fire now that he no longer has to worry about severance packages.

I'm not surprised that there is limited information being shared since the Plan of Reorganization (a milestone of CCAA and CH11 proceedings) has not yet been completed. I believe there is a 60 day window to file that plan, and we're at Day 9 as of today. It would be unwise for the corporation to comment on that direction prior to making the court filing, nor am I sure if it would even be allowed.

It's understandable that there are tons of questions and hopefully Nortel Managers are able to field the questions and provide answers from what they know. It's also understandable at a business level that priority #1 is the customer and having clear communications with them on sustained delivery and support.

It certainly is interesting to read some of the court filings. It's amazing how many legal firms are involved and no doubt a lot of money is going to be made by them throughout the proceedings.

I don't think think ch 7 would be the reason. The problem with NT isn't that it doesn't sell but it has too many liabilities and debt. Without having to pay a lot of debt, NT can actually be profitable… at least that's the idea

Our company, Teledynamic Communications has been a Nortel dealer since 1985. Since the bankruptcy announcement we have not received any communication from Nortel. NOTHING. On the other hand, we've heard from pretty much all of their competitors asking for our business.

Even in this desperate time they remain aloof and arrogant. Obviously they don't care about preserving customers and employees. This is a strong signal that they aren't much interested in preserving the company's intangible assets. It's a sell off in my opinion. Mike Z is another John Thain.

R

sad to hear that. but this is another clear evidence that this bankruptcy situation should not last longer. other wise Nortel's already declining sales will rock bottom and creditors of Nortel will get nothing.

So much for the lies they have told us about “continually engaging customers and key stakeholders”.

Although this doesn't surprise many. Many “key stakeholders” – shareholders, employees – have already been abandoned. Abandoning customers is just an extension of that doctrine.

With the extra silence comes the distinct possibility that they are preparing for Chapter 7. While we have no direct evidence of this, the LACK of opposing evidence is more than enough. Look back to December when the Nortel PR-opaganda machine was actively denying all “rumors” of bankruptcy. We all know how that turned out!

This is what they don't mention. This is what they don't want you to know. The truth, the facts, however bad, MUST BE KNOWN by all employees so that they can make the best decision for themselves and their families now that it has been made known that the company simply does not care for them.

Instead, the executive management team is concentrating hard to keep the employees ignorant and out of the loop. The less you know, the better.

I can tell you every time I hear a fellow employee say “I've had enough, I just tune out the news, tune out the negative media and ignore all of the bad stuff because I can't take it”, a minion up in the PR department cracks an evil smile. The best solution here is not apathy to the situation, no matter how painful, but instead the judicious application of critical thinking!

At the bottom of this post is one snippet of the recent Zmail….

Mike — so one critical point that I think you miss that is important to many Nortel employees about severance is that it was our safety-net should we be let go.

Most of us want to be here at Nortel by choice and still pour our life's effort and passion into. For me, severance was not something that tied me here like the lure of stock options or big bonuses was meant to in the 2000 era. What it did do was allow me to concentrate on my Nortel duty knowing that if things did go south, I could still recover without serious consequences to my family.

Many of us live paycheck to paycheck and do not have anything to fall back on. If we are suddenly let go with no warning and nothing to carry us for a few months we are in serious trouble. Until the recent Bankruptcy filing, the severance was Ontario labour law so there was confidence that it would be there. While you indicate severance might still be considered as an unsecured creditor, whatever might be gained from that would be a year too late.

The way I read things in the law – Nortel did have the choice to file for protection requesting the option to still provide severance to employees being let go. You elected to not do that. That showed what you really feel about your valued employees.

So while most of us still want to work at Nortel and make this succeed, I think you have damaged severely the morale and work output that you will receive from us over the next year which will seal the future by itself.

Re-instate the severance. Even re-instate it at 50% if you must show movement for the creditors. Give us something to know that you do give a damn about us, and we will return the favour by doing our best to help Nortel survive.

———

Mike Z email snippet:

First, as difficult as it is, the impact of this decision on former and many current employees is significant. Severance and pension are among the key areas impacted by companies filing for creditor protection. Severance for former employees and current employees restructured as part of this process generally become unsecured claims. This is typically at a percentage of the initial claim, all of which would be based on the eventual outcome once the go-forward plan is fully implemented. In terms of potential pension impacts, I'd like to refer you to the GIS sessions Elena King held in Canada and the U.S. I am also open to taking more questions on this important area in the coming days and weeks.

Is it possible that the CEO is not really aware of what is happening? Is it possible that the major creditors are now (have been) in control? The lack of information might be real, in the sense that there really is nothing to say because nothing has been decided (that, or everyone is working on the paperwork). The continued “encouragement” to focus on current operations, without any motivators, is unfortunate. As so many have indicated, without knowing in which direction to go, the alternative is to turn around in circles until someone says “that way”. At least before there was a carrot attached to the stick. Now there is just a stick.

DJ,
They are so out of touch it is pathetic. While the world is moving towards “Yes We Can” their management mantra is “No, We Won’t”…–bb

I wish Mike Z would simply go away as he has become IR-RELEVANT. Nothing he can *say* will ever bring confidence, motivation, inspiration, belief or hope so long as he is CEO.

He has zero credibility with employees, and likely as little with customers or suppliers. Would you trust a person that has as recently as December perpetuated the longevity of the company and its cash position, only knowing that a Chapter 11 filing was “imminent”? Or Richard Lowe's rhetoric that Nortel is “no shrinking violet”? Trust has been lost on mere words, rhetorical spin and fluff, half-truths and outright deception and deceit.

One of Mike's cornerstones of sales conference in 2008 was to make (keep) Nortel relevant. Ironically, yet, not surprisingly in reflection, it is Mike Z who has become IR-RELEVANT. Unfortunately, it is his leadership – or lack thereof – that has increasingly burdened Nortel with eroded market share, lost market cap and devalued brand.

Mike Z, his “cabinet” and the BoD are IRRELEVANT. They should be replaced IMMEDIATELY to re-establish “solid footing” and a foundation of trust, truth and hope. The longer Mike Z is at the helm, the lesser probability Nortel has in emerging from Chapter 11, and Canada restoring this 116-year-old company, its brand and any hope for a future. Remove Mike Z!