More Time, Please!

By Mark Evans | Published: February 5, 2009

According to Canadian Press, Nortel wants another three months to deal with its restructuring process.

The company now wants the the court to extend the stay period until May 1 because it is “necessary to provide stability to Nortel’s business while the company works to prepare a restructuring plan to see it emerge as a more focused and competitive company.”

One question: why the need for the extension given Nortel appeared to have spent a lot of time planning for the bankruptcy filing before it actually pulled the trigger on Jan. 14?

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  • scalpcutter

    This figures.
    Three more months to keep the employees in the dark.
    Three more months to keep useless managers on the payroll.
    Three more months of not telling the people they want to keep with notification and saying goodbye to the unfortunates they can't afford to keep.
    Three more months of psychological torture.
    Three more months of Z mails, the BOD, hackney, six sigma ninja turtle black belts.
    Three more months to ensure the death spiral succeeds.
    What a F***king crock.
    Bankruptcies, Alcoholism, Divorce, Swearing all increase in Canada.
    Thanks John, Dalton and Mr Harper, the BOD, you great execs and fine superior managers in the trenches making snap, frugal, logical decisions.
    But most of all Thank you John R, Dunn, Captain Cornelius and most of all michael rowed the boat ashore.
    So does this mean they are postponing layoffs again?
    A job well done.

  • drinking_the_koolaid

    No strategy, completely clueless.

    Nortel is heading no where but Chapter 7.

    Mike Z – Let is go man. You have already given a bad name to GE and now you can't even manage the bankruptcy.

  • ExNtrl

    Z and Hackney can't do TTM (Time to Market), how do you expect them to do TTC (Time To Court). Think how many times the Z crew had to restate the filings and ask yourself the question, “if they can't do those filing on time, how do you expect them to accomplish this timeline?”

  • StillatNT

    Perhaps the plan they had was not accepted by the creditor representatives and their going back to the drawing board?

  • Anonymous

    To be honest, this is quite normal behaviour for companies that file for bankruptcy protection. They keep asking for stays month after month and the courts always give them. In this case Nortel asked for Three.
    AAN wouldn’t tell you that though.

  • less

    Courts don't yet have 100G capability to hyperconnect with the numbers LSS Photoshopped via web.alive from centers of much excellence abroad.

  • TongueInCheek

    From the very beginning of the CCAA/CH11 proceedings, it has been suggested as a 12 to 18 month process. So here we are not even at the 1 month mark and already there is whining about the process time. Also interesting is that there continues even to today, filings being made in the US courts for claims against Nortel, yet somehow Nortel requesting additional time to define their Plan of Reorganization is somehow seen as being bad.

  • FlyOnWall

    drinking_the_koolaid, based on our comments, you are an angry ex-employee and your hatred speaks volumes to your current situation. If you are such a clairvoyant on all business matters, how do you manage to write so mant hateful comments when you have millions of dollars to count?

  • less

    I hear Nortel is moving its HQ to the Yukon to take advantage of the free midnight sun at the top of the world. This will allow them to work longer hours on the Turnaround.

    Everyone, please ignore the long winters and (hyuk, polar) bear with them as they ride out the secular bear.
    Unless, of course, global warming melts their igloo campii first, cuz then they'll need another 2-3 years to rebuild. And it will be someone elses fault as always.

    Behold the centers of excellence on the horizon – Resolute, Nuvaut – Fairer Banks, Alaska – Ownage, AlaZski

  • less

    Its also quite normal for Joe Schmoe to have thousands in credit card debt because he feels like it. His friends wouldn't say its bad cuz they're oft the ones who put him up to it.

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

    You are correct. 12-18 months has always been suggested from the start.

    What I don't understand is, what is the “stay period”? And why does it need to be extended? Given this management's track record on being forthcoming, it does raise some eyebrows as to what they're exactly planning.

  • drinking_the_koolaid

    Flyonthewall – You seem like a PLM guy who has a massive ego with your mindless powerpoint slides and incoherent business plans and strategies that make no sense. My comments are for people in the driver seat, not for Nortel.

  • itsPOSSIBLE

    Knock Z all you want, Z is the first to start making the hard decisions that were required many years ago, and he started making these decisions long before the company was in trouble. If anyone should go it’s the BoD.

    The BoD had an opportunity when the 2 Gary's were brought in to clean house, but the BoD failed; they were not supportive of the 2 Gary's plans and got rid of the 2 Gary’s. This was the beginning of the downfall.

    This means the BoD failed to sell UMTS, they failed to ensure Nortel was involved in a major merger (like Nokia/Siemens & Alcatel/Lucent and many others), and ultimately the BoD failed to prepare for tough times, like the current recession that affects many companies, not just Nortel.

    Anyone who owned Nortel stock and voted on their proxies for the current BoD (or did not vote, which also ensured keeping the current BOD) must also be blamed, for they all had the opportunity to get rid of this BoD, but did not.

    The only thing Z is truly guilty of is being paid an exorbitant salary; In 2007 he received $10.1m!!! Of course the BoD also is at fault here for approving this salary.

    All execs (not just at Nortel) should see a cap of 250k and then be paid a performance based bonus. ($500k like Obama has proposed for execs is way too much, especially for a company in bailout). These guys are all being paid rock star/star athlete salaries, yet are far from attracting a similar following, making them unworthy of this level of pay.

  • itsPOSSIBLE

    Here is a complete list of the BoD http://www.nortel.com/corporate/exec/board.html
    hmmmm i wonder how much they are paid?
    whatever it is… its too much!

    Although Mike is also a member of the current BoD, he was not a member of the BoD that positioned Nortel for this colapse.

  • NortelGal

    Yes, what I want to know is if this means there will be no layoffs for the next three months. They have been holding off on “leftover” layoffs from last year due to being in a restructuring mode. I guess the one silver lining in this delay is that it may postpone so many good folks (and I am referring to the common working peons here, like myself, NOT the execs) continuing to have an income for the next three months before being thrown out on our collective a**ses without severance or medical benefits.

  • lurkymcgee

    I don't think this about the date by which the Plan of Reorganization needs to be filed. That day that the Ch11 papers were filed, an “Automatic Stay” was triggered. The stay means that vendors and suppliers MUST continue to provide service to Nortel so long as they are properly paid for any service rendered/product delivered after the filing date. Essentially makes sure that the vendor can't threaten to discontinue current service due to monies owed prefiling.

    The automatic stay is… automatic… and is intended to provide the protection only until the debtor can get into court and file specifically for a stay. And they'll probably have to continue to do it throughout the Ch11. process.

  • felixmk

    Nortel is always late, ask any customer. I guess 6-Sigma did not change anything.

  • wasthere

    This is unacceptable. You don't use people as hostages(people just fired with 0 severance and pensioners)then ask the government to leave you alone with no counts to render for months, years, whatever …. If you want time, release your hostages first !

  • Still_waiting

    The Automatic Stay (via google search)
    The automatic stay stops all collection activities, foreclosures, and repossessions on any debt or claim that arose before the filing of the bankruptcy petition. The stay automatically goes into effect when the petition is filed. The stay provides a breathing spell so negotiations can take place to try to resolve the debtor's financial difficulties.

    In certain circumstances, a creditor may move to lift or modify the stay. For example, if there is no equity in a particular property, and the property is not necessary for reorganization, the creditor can request an order granting relief from the automatic stay to foreclose on the property.

    There is no specific time limit for filing a plan; however, the debtor has a 120-day exclusive period to file a plan. This period may be extended or reduced by the court. After the exclusive period expires, a creditor or the case trustee, if one is appointed, may file a competing plan. The U.S. Trustee may not file a plan.

    The right to file a competing plan is an incentive for debtor to file a plan within the exclusive period. In addition, a creditor or the U.S. trustee may move to dismiss, convert to a chapter 7, or appoint a trustee to take control of the debtor's business if the case does not move forward.

  • TongueInCheek

    Thanks for the information, very useful.

    Today is Day #23 so patience is warranted even though it can be frustrating. It is interesting to see how many documents are being filed on the US Docket. Clearly there is strict process involved.

  • Jimbo_Jones

    I guess they couldn't pass their own Define tollgate.

  • Should_have_Sold_in_Feb_2004

    Question, why is Globeinvestor.com rating Nortel a 2.13 out of 5 (Buy)? The rating 7 days ago was 3.44. Zacks Investment Research provides the reports for Globeinvestor.com (Globe & Mail). Note this 2.13 rating is based on only 4 brokers.

    I'm waiting for the stock to rise…might get something back out of $27K loss so far.

  • protosphere

    Master of deceit and delay since their restating a restatement deadlines that only had to be restated yet again anyways, always buying time to no where. Why now?

    Three to five years, what's another 3 months if it weren't for the greater amounts of money burned every month and every day that could better go towards paying severances or creditors than lining their “crazy level's” pockets as they wind down run away train operations.

    Did these master of loopholes and delay with their enormous legal power miss forecasting yet again to require another extension only because they could.

    Seems they will try anything they can, like trying to dismiss lawsuits on jurisdictional grounds or printing billions in Nortel paper listing their largest pension shortfall as a mere footnote . Besides closed loopholes like these, are any other precedents being set to prevent half the stunts these guys pull.

    There is no restructuring plan! The math is blatantly obvious! How can they take advantage of the legal process under the guise of miraculously rising from the ashes or dead.

    In three months, they will only to file for chapter 7 at the rate they are losing business. What plan?

    What 3 months? Why? …because they can, that's why! Taking advantage of all avenues from downplaying folding to severing severances… If they could get away with even more, you can bet they would. Strikes me as shameless and unrepentant. =) This is Nortel for ya, disgraced and proverbially contradicting.

    Are their numbers the SEC is finally monitoring even reliable yet by the way? $100M insurance for legal fees sure sounds like they are bracing for lawsuits of the century, what is going on here? 3 months? heh… if only the judge could tell them to stick it in their ear at this point and pay the employees instead.

    So much for a management partisan system of heavy duty contacts that appears jump on the bandwagon of open season the the investors and employee. If only the bankruptcy judge could leer an evil grin their powerful legal might clout without his hands tied, like their proverbial loophole and delay fiascoes only because they can. This is well beyond when is enough, enough already, stop it, you're killing me, my ribs hurt, the profound punchlines never cease.

  • broadbandbill

    Hard decisions are easy to make; it is the right decisions that are hard! Everyone on the planet told him to divest CDMA and focus on growth. What did he do? Kill dreams while he lined his pockets with BLOOD money. Here’s a hard decision: let’s see him give his bonus money back. You think he’s up to it?…–bb

  • tryn2makealivin

    “Hard decisions are easy to make; it is the right decisions that are hard!”

    That says it all….

  • less

    Heres a reason to stall and ” save” – gotta finance that Prestige:

    Financially strapped Nortel Networks may well end up honouring its 2010 Olympic sponsorship deal, but the company's plight should make Vanoc officials wary of other Games sponsorship arrangements.

    That was the assessment from Sauder School of Business professor James Brander after Nortel sought court protection Wednesday from creditors in the U.S. and Canada.

    “Nobody knows how many more sponsors will go into bankruptcy and how much wiggle room there is on their 2010 commitments,” Brander said. “But there is not a lot of extra money going around now, and there's reason to be nervous.”

    Nortel is an official supplier to the 2010 Olympic Games, with a mandate to supply communications equipment for a network to be created by Bell Canada.

    Vanoc said Nortel has reaffirmed its commitment to its 2010 sponsorship — worth from $3 million to $15 million — and noted most of Nortel's equipment will be delivered by May.

    Anywhere from 10 to 15 Nortel workers are expected in Vancouver to help with the communications network during the Games.

    Nortel is also a Tier One sponsor for the 2012 Summer Olympics in London, with a $73-million deal to provide infrastructure for British Telecom's communications network for those Games.

    Other Vanoc sponsors struggling with the slowing economy include automaker General Motors and mining giant Teck Cominco. Brander said it's encouraging that all sponsors have maintained their commitments and none has pulled out of a sponsorship deal so far.

    “But obviously you have to be concerned about the future because by all accounts, 2009 is not going to be a good year,” he said.

    Brander said all previous business decisions have to be reconsidered when a struggling company like Nortel goes to court for protection from creditors.

    “If the money to be spent on the Olympics looks like a good marketing expenditure, then they'll still do it,” he said.

    “I think there's probably a good chance they'll go ahead with it but going to bankruptcy court essentially gives them a chance to remake that decision.”

    Nortel employees shoud be porud that their money is no longer wasted on fancy light fixtures and instant gratification, but rather invested in furthering the goodwill of all nations by mid- 2010. Patience, grasshoppers.

    Between “$3 million to $15 million” is a pretty darn broad estimate. I wouldn't hire that contractor to paint my house.

    And these “10 to 15 Nortel workers” – will they represent a cross section of the talent and diversity of Nortel, i.e. whites, blacks, males, females, gays, straights, Hindi, Muslims, and agnostics from obroad that better understand cultures?

    Or will they just get the cheapest labor available?

  • Ex_Nortel

    Nortel can continue to lay off employees – and without severance. The 'stay' provides a court enforced 'barrier' between Nortel and its creditors so that creditors can not attempt to take actions to collect monies owed. .

    Laid off employees are unsecured creditors. So the bottomline is that more folks will be laid off and no one will be paid severance.

  • Got_Out

    Its entirely possible that there was a plan going into the original filing that has now come undone (like so many others). Perhaps a planned or hoped for sale isnt going to happen (like MEN)?? Perhaps the full QIV numbers and the early Jan results are changing plans or timing.

    May also be that the plan (including divestiture) has now been struck and the actions agreed with the acquirer need to be taken (specifics on how many employees, locations, liabilities, pension liability, etc).

    Or it could be that its proving to be much harder and more complex than originally thought. That would be a repeat of what has happened many times before (WIMAX, LTE, Microsoft, IBM, etc).

    Sadly, the best predictor of the future is the past.

  • Another_Nortel_Watcher

    You mean the board that hired him, of course.

  • remote_norteller

    Just thinking off the top of my head, here.

    What if HR figured out (finally) that they're going to have to give WARN to U.S. employees as a whole?

    We're all hearing the rumors about “mass” layoffs coming mid-to-late February (to the tune of 40%), and we all heard the guy from HR (I can't remember his name) on the early GIS' talk about how there would be no WARN notification.

    Now, what I'm thinking is that there are 2 things going on simultaneously here –

    First – they're going to trigger WARN in a number of areas (at least RTP, Santa Clara, and Texas), and more than likely in remote areas due to the WARN provision that covers multiple areas.

    Second – the notification of WARN will create a “panic” in suppliers and partners, who will see a 40% staff reduction as a clear slap in the face to Mike Z's commitments (how do you support customers with 40% less staff…?)

    So…if they get an extension, they have the ability to calm customers and partners down, or at least avoid any panic “pay me now” requests, and also figure out how they're going to have to pay those employees covered by WARN for 2 more months (and, quite frankly, you can count on employee productivity going significantly down if and when WARN notices are distributed).

  • Tk910

    I do not believe that you will see the upcoming layoffs trigger the WARN act in very many locations. There are too many clauses that allow escape. Perhaps in some really small locations, yes, but unless the company decides to just do a mass closure of a major location like RTP or in Texas, it probably won't happen. And if it does happen, the affected persons still have to pursue actions through the courts. If the company goes into Chapter 7, which I do not believe will happen, then a lot of people would be pursuing actions against a company with no money. I have to believe that Nortel will engineer their layoffs very carefully to minimize risk to this law.

  • Golfball

    It's not impossible to get a lawsuit dismissed on jurisdictional grounds (I have first hand succeeded at having a suit against me dismissed on jurisdictional grounds. The other litigant eventually settled with me out of court.), but unless it was brought it up at the beginning, it is either a) expensive, b) fallacious, or c) both.

  • less

    Outsource, outsource, outsource.

    Doing so will further enhance LSS because contract labor is just happy to be alive, and at a fracton of the cost of disloyal, disgruntled RFTs.

  • broadbandbill

    Less,

    You are joking, right? Pls clarify…–bb

  • Hotel_Notel

    bb – Less if probably Hackem-Smakem himself trying to get in a few jabs here on the blog site……..not enough action in real life these days.

    In truth, it probably is exactly what Z and company would prefer it their customer base would tolerate it.

  • less

    I'm only half joking. “My” Nortel used to employ a fair amount of contractors in R&D until the boom really took off.

    Said hired help was suddenly in high demand. Some were receiving monthly raises, decent per diem, free training, and eventually took to selling themselves to the highest bidders, jumping ship mid-project, even getting hired on permanently by seemingly countless startups sprouting up everywhere, thus leaving plenty of job vacancies for newbies. Which is, admittedly, when and where I decided to jump in and see if the rumors of free money to be had were indeed true.

    Sure enough, quite a few trusty contractors quickly found real jobs around town, ostensibly providing some stability within R&D; keep the ball rolling, Own It, etc.

    In this current job market I wouldn't be surprised if Nortel did an about-face and offered select tried-and-true soldiers to “keep” their jobs as contractors.

    Its a bit of a gamble, perhaps, as a few brainiacs will invariably be lost in the shuffle, but all Nortel will care about is where the costs end up on the balance sheet.

    No?

  • broadbandbill

    Less,

    Thanks; here's my view:

    I consulted for a company that during its last 2 years outsourced software development to India (against my strong objections) and continually hired H1 visa consultants at 40% discount to full-time employees in the US.

    What they ended-up with was a severely divided IT department; total mistrust between contractors, off-shore and captive employees and grossly inferior productivity. The name of the company was COUNTRYWIDE; important to note CW also had a megalomaniac, perma-tanned CEO who was so way out of touch it was pathetic. He is now the poster child for corporate greed and mismanagement (soon to be replaced by Z)…– bb

  • less

    No irony here, eh: Countrywide briefly occupied some of Nortel's vacated offices in Texas. Very briefly.

    I too witnessed colleagues from abroad come in to study the ways of Nortel R&D before taking their free switches home with them, and in the process make a horrible mess of fiber and copper patching by ignoring all lab protocols and decorum. Fie on the western world for not manufacturing affordable ESD sandals for locals by locals in foreign sweatshops.

    Some students eventually had acccess limited and/or revoked and asked to submit rather simple patch requests like everyone else, but not before resources had to be diverted to audit and clean the dreadlocked panels.

    The time differences, (mis)communication and distance to their customers don't much help Support meet its lofty LSS goals.

    I guess the best thing to do is to let the customers take over and find their own rhythm, some would argue. Much cheaper that way. Business made simple.

  • scalpcutter

    Apparently mikes latest eutopian message says bluntly Nortel will be smaller. I would say 50 percent of the people there now will be gone by summer.
    It does look like Enterprise is the favoured son.
    Wireless is getting the could shoulder and they just don't know what to do about MEN?
    LTE, Who knows?

  • forgive

    Current Nortel employees should thank Zero Man for giving them at least 3 more months to collect pay checks. It is another form of compensation rather than laid off package. NT employees should feel more happy to accept this 3-month “bonus” from Mike. To shareholders or bond holders, it is a different story.

  • broadbandbill

    Agree, finally…–bb

  • broadbandbill

    HN,

    Don't think so, Less backs up his arguments with pretty good logic; Hackney has none (logic that is)…–bb

  • scalpcutter

    I would not be so sure about that.
    There is no indication the layoff train is coming in later than people already now believe.

  • brett5

    I think Mike Z's message was Nortel is getting a lot smaller. MEN+Enterprise makes a good package. The difficulties surrounding splitting Intel. Property out of the so many overlapping products leads me to believe that all that will be left of Nortel is their Services portfolio (i.e. managed services, hosted, OCS Integration, telepresence, etc). which requires very little R&D or Intel. Property and their Contact Center & IVR solutions – which do not share IP with other products and can be sold into existing, 3rd party infrastrcuture. These items are also pure software which requires their services to install and develop. The rest is sold off leaving behind just 20% of what we now consider Nortel today.

  • scalpcutter

    The sick thing the employees don't know what they are scheming. It is all in the hands of the creditors and the courts. Nobody has any idea what Z and his team offered as the restructuring package.
    That's the killer.
    Why can't they disclose that.
    What does it matter now?
    They're just killing the people still working there?

  • slk

    Bill, you need understand where less is coming from here. The Nortel mentality is all about politics. Management spends it days thinking about topics such as:
    - How can I hide this cost?
    - How can I hide this headcount?
    - How can I protect myself from budget cuts?
    - How can I keep this project going so I don't look bad?
    - How can I protect myself and my staff from layoffs?
    - etc.

    When a directive comes down saying to stop hiring, the Nortel way is to say ooookay… and then go out and start hiring contractors at inflated rates instead of full time employees. It doesn't matter that the contractors actually cost more, because they are hidden from view so all is well.

    When they get caught doing this they throw up their arms and say they can't do the work anymore because they have no resources, so upper management allows them to outsource jobs to China or Mexico or someplace because on paper those headcount cost less.

    Nowhere are things like quality, customer satisfaction, employee satisfaction, the hidden costs of outsourcing, etc considered. Someone's budget says they stopped hiring in North America and moved 10 jobs to China, so they get a gold star and a bonus. That is how Nortel works, and that is why Nortel is broken. Cronyism at its worst.

  • broadbandbill

    Wow, thanks SLK. For a moment I thought you were talking about Countrywide. Same faith in the end, I am sure.

    Ironic that Angelo Mozilo, CW's former perma-tanned CEO now travels via commercial airlines. ‘The Future is Just Like the Past, Except Longer” – Yogi Berra.

    Best…–bb

  • Nortel_Sucker

    Employees are not going to get 3 more months. The latest JudasMail states they are in the advanced stages of determining the layoffs. It also states Nortel will be a much smaller company. It's going to be a slaughter.
    Not that this cold hearted pathetic excuse for a human being cares none.
    As for the I believe crowd, goodbye. Hope your first to the chopping block.
    And the rest, why aren't you sucking up a bunch of personal shares if you believe? Pathetic.
    Rot in hell Judas Z.

  • less

    Twas a very broad interpretation of the slogan Business made Simple – guys like Dunn played the shell game extremely well for a long time, and managerment far down the chain adopted the practice too – I would argue mostly involuntarily. Just somehow keep the show going by outfoxing your own friend-and-mentor coworkers, the noble Black Belts policing the halls for maximum efficiency.

    The Simple result: Disgruntled employees, disaffected customers, indifferent contractors. The books sitll don't and never will add up without more sleight of hand.

  • Nortel_Sucker

    When do you think the layoff train is coming?

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