Should the Canadian Government Help Nortel?

Why is this a surprise to anyone? It has always been apparent that Zafirovski is a fake. Zafirovski is not a real leader or even a CEO. He is a failure and a rather spectacular one at that. It is apparent even to the casual observer that Zafirovski holds others in contempt and has absolutely no idea what it takes to run a company in the technology space. The only thing that gets him up in the morning is money and the opportunity to validate his "alpha" by bullying people into thinking he knows something they don't.

Hopefully we are seeing the demise of this I-me-mine style, Perhaps the bright side to financial turmoil will be to separate the men from the immature bullies. Maybe we will see a breed of leadership that leads because they enjoy what they do and because they know it is important to reveal the right path forward. People who carefully consider the ramifications of their actions in the context of their industry *and* the employees and shareholders. Leaders that are not simply reactive. Leaders that can asses and take a calculated risk thinking more than a few moves ahead. Leaders that think more about the company 10, or 20 years down the road that they do about how to squeeze the last dime out of it for themselves.

.............................but I have my doubts.

Guys like Zafirovski will still be around bullying BoDs into thinking they know what they are doing and milking the companies, their shareholders and employees dry to pay their undeserved salaries and perks. Hopefully this experience will not be forgotten and the Zafirovski brand will be worthless………….

Hey Bo, how is that book coming?

Yeah, Pour some more water in teh leaking bucket

I'm still somewhat puzled as to why the globally acknowledged socialist utopia of Canada won't rush to the aid of its exploited masses, regardless of race, creed, color and income.

Already told you.
They consider Nortel people highly skilled.
They assume they don't need help and they assume they can get another job right away, even in these dire economic times.
They can change careers or learn something in one month what the common man takes 1 year to learn. Superman, Superman, Wish I could fly like Superman.
Now if you are a new immigrant, somebody on social assistance, getting free legal aid, welfare or refugee status handouts, someone who lodges complaints with the human rights comission waving the charter in hand, well that's another story. They'll be right there for you. Like S**t on a blanket.
You gotta be really down and out for the socialist utopia to truly become the "socialist utopia"!

Hearts and minds. They really should join the EU.

A government bailout is as much rumor as selling any of their divisions.
It is a ridiculous proposition to remotely ponder in no uncertain terms.

To what degree a bailout would assist Nortel when they already sold so many assets and printed so much paper with their major earnings area now in decline after already losing so much money after a decade. Do the math.

How can they invent some miracle plan to profitability when business has deteriorated so gravely and is further deteriorating with bankruptcy, contrary to what they claim amid endless contradiction all the way down.

The logistics are not there to throw good money after bad.

Bankruptcy by definition indicates that they have already driven this company to the ground after burning billions in paper and assets to just survive another day. After already losing money for a decade, their area accounting for almost all their earnings nosedives to a point of no return. Do the math to see what is left below zero with no other areas compensating for such dramatic loss to burn money even faster.

Feed a hungry man and he will only hunger tomorrow, unless you teach him how to fish. Well, Nortel has exhausting all avenues and resources to date, so what can taxpayers do for them now. Pay for yet just another day?

As they wind down operations on life support and brain dead, how can the government public sector and taxpayers or even the private sector again step in to only prolonging their eulogy yet once again when they already had so much time and money before things only got excponentially and irreversibly worse to find themselves in the position they are in today. It is time to sadly pull the plug, there is nothing anyone can do, they tried.

The can not or will not rise from the ashes or the dead when all aspirations have failed amid endless contradiction and having already burned so much Nortel paper /fire sold assets /etc., They can no longer sell or print anything just to live another day losing even more money after so long with increasingly dire outlook. It is a ridiculous proposition. Taxpayers would be outraged,

Where is the even more difficult plan now, when they had years to formulate one. If there was anything tangible to bank on is one story but this is Nortel we're talking here, Canada's insatiable money pig. Throwing more huge money at it is not the answer. It is time to watch it burn and perform and exorcism for the stunts they have pulled. Not even worth debating the could have -should have -would have's at this point amid endless folly with Murphy's Law in full bloom to their irreversible and worsening position. It's over, let it die in peace or pieces if only they could sell any part of it any more.

Many Nortel workers have a specific skillet that has very limited application outside the high tech telecom industry. Nortel has been here for over 100 years and is steeped in history, dating all the way back to Alexander Graham Bell and the invention of the telephone.

Nortel has sold hundreds of millions of dollars of equipment worldwide and employed hundreds of thousands of employees over the past 100+ years. The company and the employees have all paid billions of dollars in taxes to the Canadian government

Nortel will be here in one form or another going forward to ensure their customers are supported.
The government must provide some form of relief. $24m is a joke for a company that had over $11B in revenue last year.

itsPOSSIBLE: There are several companies that were around for many years, made tons of money, but now have vanished from the face of earth for one reason or other. Businesses do fail, and Nortel is no exception to this Darwinian type natural selection process. It is shame to see Nortel in this position but the only way for Nortel to recover would be on its own, rather than on government loaned crutches. Businesses that plan ahead and have a long term strategy are the ones that typically are immune to these short term economic cycles. For example Cisco has tons of cash hoarded up and they are constantly planning rather then thinking how to pay next month’s rent. Same principle applies to personal lives, living paycheck to paycheck or saving constantly in anticipation of a rainy day. Who do you think will be in a better position when we hit recession?

Nortel execs don’t understand the difference between tactics and strategy. They seem to confuse short term tactics as strategy which is precisely the reason why we are in bankruptcy court now.

Oh well, I think there is still hope, but I am realistic guy, hence the usage of metaphor “drinking the kool aid”.

The extent of a "bailout" which I could support would be the Government of Canada buying the Metro Ethernet unit, with a plan to stabilize that division, and IPO it sometime in the future when the global economy recovers.

The Canadian Fed can't even deal with bus strike let alone saving a hi-tech company. Should just let the ship go down and bring the captain with it.

To me the biggest cancer of the company is the useless BoD...They have sat idle and let the Z man and his cronies run the ship into the iceberg. Time to expose this useless bunch and hopefully they don't wreck another companies out there.

NO

Back when Nortel was predominately Canadian employees, I could see helping bail the company out (with similar restraints on executive pay, bonuses and stock options as TARP). Now that the majority of the jobs have been shipped to low cost centers of excellence (Mexico, India, China, Taiwan, Russia, etc), why would the Canadian government want to bail out a low job content Canadian company? I believe the countries that the low cost centers are in should be offering to bail out Nortel since they have benefited from the transfer of jobs from Canada to the low cost centers. IMHO

Its called nationalism when select countries do it.

Then the low cost center countries can bail out Nortel. I would prefer to keep my tax dollar out of a losing proposition and use the money for something more constructive like filling a pot hole

Yes. Filling a pot hole with pot no less.

I just can't see Canada bailing out a company that has only a 20% Canadian workforce. This is the 800 pound gorilla that effectively destroys any chance of the feds bailing out Nortel.

And without trying to be political, IMHO bailouts are a terrible idea in general and I believe that increasing public skepticism over the TARP program in the USA will spill over into Canada, making potential bailouts of even %100 Canadian companies unpopular.

Nortel's demise is direct consequence of free market action, some lose and some win. Last thing you want is for government to step in and disrupt this natural process. Few thousand Canadians will lose their jobs, but will manage to find other forms of employment, likely in a healthier company and growing industry. Some will even start their own business and indulge in entrepreneurship. Canada has a social safety net so people can take risks and adventure into new areas in exploration of new opportunities.

Bottom line is that Nortel lost, and lost Big! Using tax payer dollars for nostalgia is foolish and irresponsible. Nortel’s future is bleak, as its brand has now been tarnished by fraud and failure, plus over the last decade the telecom industry has transformed into a cut throat commodity business.

Let nature take its course…………

I will agree with you on one point.
Canada does have a social safety net.
You just have to swallow your pride and not be ashamed to use it.
That truly is about the only way the Feds will help out Nortel Employees.
Don't count on the lawyers or the courts.
They are there to take your money.

Yep, in Canada at least we can take comfort in the fact that as a last resort we will still have access to health care and housing assistance that can be used.

In U.S, our Nortel colleagues are pretty much screwed as they lose the health insurance the month they are terminated and will only get government unemplyment insurance checks for max of 39 weeks. After that you are pretty much on your own.

I can only imagine the kind of stress Nortel U.S employees are going thru that have a need for health care and know that they can lose it any minute.

But we got Obama and you got Harper.

But the weather is better down there.
So I guess it all evens out.

True. The earthquakes on the west coast, hurricanes on the east coast, and tornados and floods in the mid-west truly adds up to better weather that they Canadians up north do not have to enjoy.

folks:

-Bo seems to be a stalker here....why wont he post something of substance?
-layoffs will start next week or the week after latest. empty your cubes now.
-NT customers are dropping NT as a vendor.

Will post more when I am free ;)

ch11 was only done so NT would be palatable to a purchaser.

Ask the carolina nazi how he can run a business that cant turn a profit in 10 years? debt aside.

He'll tell you it is because it was before his time, things are different not; after all he has the customers' support :)...-bb

Yes the BOD, Mike and all the execs who make decisions that have an impact on the life of the business and how they set policies must all be TURFED before any real help should be granted. It would have to be a condition.
This EDC stuff is garbage. What is that all about? Donating pennies in the grand scheme of things to help export jobs to China and Mexico?
What? Pull out of it Clementine.
I'm going to be brutally honest with you here.
The Canadian Government likely has no real intention of assisting Nortel and its employees. Even if the BOD, Mike and the execs were turfed they still would not help. And Here is Why.
- The feds look at nortel employees as skilled labourers (unlike GM assemblers) so they feel people like that can get a job right away. Of course they fail to acknowledge the recession/depression we are in. Idiots.
- Hi Tech is dead in canada, especially silicon valley north kanata.
- The feds and McGuinty would rather help drywallers, assemblers, ditch diggers, social housing, the arts, retraining to be a grocery part pusher and tradespeople. Canada is a natural resource exporter. They don't care about technology anymore unless it is used in ways to make the tarsands even more efficient and cheaper than it is today.
So there you have it.
No help is coming, only the BUS, with a disgruntled OC transpo driver, mad that he missed two months salary, and Nortel employees are standing in the middle of the road.
Cheers.

No No and No. I dont want to see my tax money going into this sinkhole. what to give Z some more perks.

The caveat to a government bailout should be for the BoD, Mike, and Joel to leave first.

NO, NO, NO....... I agree and I am on the chopping block. Not with these executives, Never, No how, and No way. No vision, No plan, No idea. Never with an Executive whom states that the 2nd tier support is the problem, while the off-shored "design teams" have no clue of how telephony works much less of how the VOIP boxes are intregated and dependent upon each other. Never, Nope, not under any condition, These Senior Execs have no clue how to run a Telecom company, or Data Company or Enterprise company or whatever company we are today.

So what's your point? :)...---bb

Another YES for saying NO. And seeing how every grandmother, janitor, and secretary lost money by owning Nortel stock, any Canadian politician would vote himself out of office by supporting a Nortel bail-out. Kcuf-'em.

What you are forgetting to remember is it was not the employees who screwed the common folk. It was Frank Heydrich Dunn and his cronies who kicked it off and subsequent CEO's, the BOD and execs kept up the charade.
Again the feds should help if the BOD, Mike and many execs and managers are turfed. They are the reason people lost money by owning nortel stock. It wasn't the fault of the average employee.
Your view point is unfortunately how politicians see it.
They are as useless as the BOD and the execs.
Take Manley for example. A politician on the Nortel BOD.
He probably blames the employees.
That's why the suffered and will continue to do so.
Only in Canada.

Wait... too soon to tar Dunn with 'guilty as charged' because he has not had his day in court yet, even after all this time. He has wisely not said anything until trial.

So think about it... seriously. Where does ALL of the information we have on Dunn so far flow from? The Nortel BoD and Nortel executives. Do you feel good about them as a source of information? I don't. I'm waiting to see it come out in court.

Also, most people would disagree that Nortel is Canada's "flag ship high tech company." RIM is.

You mean the company who's top execs just agreed to pay fines of $75M each for backdating options? Might be time to start looking elsewhere for a flagship. You couldn't make this stuff up.

It's nice to hold onto hope that either the Canadian or US goverment could come to the rescue.

Any help should:
come with strict limits on executive compensation
requirements to stop the off-shoring of jobs
elimination of the golden parachutes
reinstatement of employee severence packages
..........I'm sure people can find more to add to the list

Keeping jobs in Canada can't resolve problem at all, obviously.

Do you pepole here try to understand what's really happening around the problemS of nortel? It's the rising of the chinese and chinese companies such as Huawei and ZTE. They can get goverment support easier than whatever you can image, and the goverment benifit too much from both companies in return. Try to go to find information about huawei, how much progress has it made during last decade while nortel dropped day by day, year by year?

You can't deny you canadians are too lazy and not so smarter than the chinese. With most powerful support from the chinese goverment, nortel or other telecom company's failing is not question but a matter of time. The global recession has just shorten the time you have to save nortel and its employees. And when it comes to the end, all of you will be ruled under CCCP, that's really not what you and me want to. I believe that you have heard lots of canadian lost job from nortel, and get job from huawei.

Nortel's best approach is to gain the support from goverment, using the low cost engineers together with you canadian engineers to fight with Huawei or other telecom gaints. Nortel can't survie if it can't get both of them together timely. If Nortel cut jobs in low cost area, I will be calling Huawei HR next morning happily, for the quicker death of nortel makes it easier to work in huawei having less a compititor.

You can't deny you canadians are too lazy and not so smarter than the chinese.
Lazy goes along with being a Chinese engineer at Nortel. Their idea of problem solving is, "Why don't you just try things out in Matlab?" That's a quote; And it gets quite a few laughs when I tell it..Also, ever notice how a Chinese manager there has almost exclusively Chinese people working under him (it's always a him). The accepted racism at Nortel was astonishing.

No, this is not sour grapes. In the end it was all just another nail in the coffin.

China is nothing.
China is an over polluted, over populated (controls on number of children you have).
China is a biological and viral nightmare.
China has the pig virus, the bird virus, the peackock pekinger or whatever you call it over there.
Most of china is still fifth world working in the rice fields.
China is going to fossil fuel itself into extinction.
It grew too fast for the amount of people and resources there.
Not only that China currently has food issues and riots due to the massive unemployment going on over there because even they are not immune from the recession.
Huaweii and ZTE are cheaters, stealers and copyright infringers. They steal something and change the label on it. Or worse they make crappy clones.
China can't get enough of Canadas Natural Resources.
Canada holds the trump card, not China.
One day China may find out the west may just cut them off.
And the west don't need to worry about paying their debt back to them.
We'll just cancel it.
Remeber also how easy the japanese walked through China.

Hi Fossil Nazis,

Likely you have described your fears on china with words of anger & rumor, would this help? I'm galad to know if it's a positive answer.

"Remeber also how easy the japanese walked through China."
-- Ha, that's why DPRK exists for! Any intruder from northen-east china will be first served by DPRK.

"One day China may find out the west may just cut them off."
"And the west don't need to worry about paying their debt back to them."
Am I talking with a child in here? You don't know that nuclear weapon is a kind of massive destructive weapon? You rumor that huawei&zte are cheaters partly becuase it makes sense that you want your nation to become a bigger cheater?

"China is an ... over populated (controls on number of children you have)."
"China is a biological and viral nightmare."
Your westeners discovered but don't believe natural selection, and don't know number of individuals is critical for mutation and has great genetic advangtage? It's not nightmare for us, on the contratry it's the hope for future.

Well Well sounds like we gotta bonafide Chairman Mao pumping, communist, flag waving dyed in the wool, looking for trouble in all the wrong places here??
Do you live in Canada?
Do you love Canada?
Would you fight as a soldier for this country?
Do you think you can take advantage of the system?
Because if you do I want CSIS to investigate you for treason, copyright stealing and technological spying.
It is obvious of your hatred towards Canadians.
Typical. We let your type in and you think it is a free ticket to bash this country. Wrong Again Mao.
We're watching your type.
It is obvious by the way you type that you are chinese.
I hope some of your fellow countrymen chime in here and discredit you as the sham you are, because most chinese people living in Canada are hard working, decent people loyal to Canada FIRST. You aren't.
If you are submitting outside of Canada time to block and monitor.

OK, block me. quite like your style, do it please!

If it was up to me I would do more than that.
GD communists.

Do not help with the executive team or BoD in place today. Should they help, they'd need to prune Mike Z, Richard Lowe, Jesse Joel "Mike Tyson" Hackney, Peter McKinnon, Dennis Carey, Joe Flanigan, and all the other non-producing, non-deserving executives.

Otherwise, Nortel should be left to die on the vine as it will be replaced with other vendors which are better managed and suited for survival during this downturn.

I agree, put a Canadian in charge...

Put an engineer in charge...--bb

Put a BB in charge...;-)

Agreed, from what we are still seeing/hearing in the trenches, the Sr. Mgmt at our level are still too fearful of abandoning the useless policies that dug us into this mind-numbing-unthoughtful realm we are currently assunder.

Unless the infection is eradicated, the ulcer will only continue to grow with the addition of fresh blood (i.e. money).

Ulcers are treatable, this is more of the 'flesh-eating' bacterial type...--bb

I agree. Using taxpayers money to support Nortel while the executive viruses are still in place won't stop the inevitable, it will only delay it.

Hey Mark. FYI - as far as I can tell, the quote that GigaOM and you referencing from Tony Clement from "yesterday" is from a Reuters article dated January 14th.

Not that it's still not a question to be pondered, but this topic seems to be circulating as new (especially on Twitter) when it is a quote from the original day of our restructuring news three weeks ago.

you get paid to just blog. cool

I do a little more than that, but yes it is cool.

Serves me right for relying on GigaOm. :) I'll make a correction.

Either they help Nortel or the laid off employees who won't have any money left, but they will certainly have to chime in...

Chime In?
Chime In?
Clementine has chimed in as much as you'll see.
That's it from the feds. Money for outsourcing.
McClucky will do dick all.
You have a better chance of being helped by the communist chinese (huaweii) then you do by the feds regarding Hi Tech.
Again I have to send out my congratulations to John Manley.
Well Done John!!