Big Bucks for Nortel Executives

According to Dilbert: CONSULTANT is a person who CONs and then INSULTs.

I have seen this with McKinsey, Gartner, BCG etc. They just massage the same old chartware, put a spin and make it sounds like the next best thing from sliced bread. Only they never implement. And if you question them then they give you this look like you were a high school geek who knows nothing about business.

They have visibly even doctored their own reports to suit what the 'client' is looking for and charged big bucks north of 500/hr for it.

Ugh. Apropos of sliced bread: I remember when consulting/branding/imaging became all the rage during the yuppie 80s overseas.

Yer neighborhood bakery, with all of its 6-7 employess, was remodeled with chrome, mirrors, tile, bistro tables and halogen lamps, its workers stuck in logo'd uniforms, the CEO pro-actively policing his businesses in the flashy de rigeur Miami Vice couture du jour.

"This is 1985, buddy! I got with it! Bought a Real Car! It takes money to make money! What? Our donuts and pretzels are now smaller because its healthier for you! Plus, we buy and use less ingredients which leaves less waste, which reduces the strain on our landfills! Halogen saves energy!"

Its infectous. All it takes is a consultant to interpret your books in a positive light to make you rich, admired and, WTHey, envied.

Did I read that Mike Z's son started working for McKinsey in 2006? Is this true? What about ETHICS? Doesn't that seem odd, Nortel spening millions with McKinsey for "Business Transformation" (definition: 1) Nortel what they already knew; 2) a) listening to employees, b) sending the ideas to India overnight, c) receiving the ideas back in PowerPoint overnight for presentation back to Nortel.

If Mike Z's son landing a job at McKinsey in 2006 (during $M in BT consulting spend) is not an ethical violation, I'm not sure what is.

Still works there. Mike is close friend of Julian, the head if telecom practice at McKinsey, and the one that lead the BTransfirmation initiative. They always get together on weekends when mike is in Chicago.

There’s the root cause of the problem; McKinsey Telecom practice is an oxymoron. No one in the industry has ANY respect for anyone out of McKinsey, Bain, etc.

Nortel’s off-shore flunkies know more about telecom than the MDs at McKinsey. They can only fool the more ignorant ones and finding the latter is not easy. Apparently, Julian found one…--bb

I was NOT impressed at all by McKinsey. They literally took our grass-roots ideas (which management never listed to before) and massaged them into chartware for executive presentation. I've seen MBA students do better than McKinsey. I personally can't identify one recommendation from McKinsey which was actually executed upon. What a waste of money, energy and time! You know, McKInsey and GE alumni all run together ... go figure.

The McKinseys of the world figured out that the best advice is internal and found a way to extract it from the real experts (employees), re-package it with cool ppt slides and charge a king’s ransom by providing 're-alignment of strategic initiatives to meet the tomorrow’s challenges’. The only people that listen to them are all former GE flakes…--bb

Correct. The McKinseys of the world are editors, not authors. You pay them great sums of money to tell you what you already know. The happier you are with their output, the more clueless you were to begin with.

And by the way, management use of consultants is one of the surest ways to lose the respect of the employee base. It broadcasts a message of "We don't know what to do so we're going to ask people who have never done what we need to do what we should do." The day that a company hires a McKinsey is the day that company jumps the shark.

To be fair, we don’t know enough about his son’s employment there to start jumping to conclusions. It may have been a summer internship program, which usually does not pay all that well. I am certain there are many other instances where Z’s lack of ethical integrity is a lot more evident…--bb

new blood at McKinsey & Company - Matt Zafirovski
Summer 2006 - internship
August 2008 - full time employee

Don't punish the sons for their father's crimes....--bb

Bill,

a greater example of Z's lack of integrity came when he recommended that the stock was a strong buying opportunity when it was at $19.....and here we are eighteen months later undergoing BK protection!

Another example is the hiring of his GE associates who along with the board knowingly acknowledged the lack of telecom experience each of them had during the hiring......I highly doubt that Z's GE connections were sought out by the BOD,so this falls directly into Z's hands.

The former may be construed as genuine belief; the latter is SPOT ON! And I tried my best to warn him against it...--bb

Is this normall thing for CEO use company jet for the privte matter? Is this included in their contract?Otherwise he should be sued for doing that. Anyone has insight?

It was part of his agreement to join nortel. It us part of his compensation.

Refrence docket 245;
I question the sense of publishing employees home addresses (including the execs!) in the light of the amount of identity fraud in the world.
You don't even need to register to get access to that site!!
Is this normal in the US as I think it is forbidden in Europe?

I believe bankruptcy itself is forbidden in Europe, and that their "social net" virtually guarantees financial safety, free and unviersal health care, education, etc. from cradle to grave That, and in overseas gun ownership is overwhelmingly frowned upon as "uncultured" - Wild West America John Dirty Harry Wayne.
I can't imagine yer ordinary Euro foresaking dissent, dialog and mediation for violence of any kind.
Over there, I'd go ring Mike Z's (solar-powered) doorbell and he'd invite me in, offer me his house slippers (a courteous ritual he'd adopted after visiting Japan), tap the gong (made in China) that summons the chef (Mexican) who offers a decent cup (earthen) of tea (Darjeeling), a (glass) bottle of real beer (German), and maybe even some homemade pasta (Italian).

And lo! deep thought and poetry bursts forth in a meaningful cultural exchange. Before I know he's showing me pics of his spiritual retreats to Ibiza and Mallorca (Spain) with classical music (Mozart) playing softly in the background.
Using the restroom (Ruskeala marble, Corinthian columns) I notice the amphor (Egyptian) containing water (filtered, pH neutral) that guests (Arabs) may use to clean their nether regions instead of toilet paper (100% recycled) to help them feel at ease and at home (i.e. the global village).

Thanks, that made me laugh!

He's Macedonian, the marbel would come from Prilep...--bb

He didn't want to (again) be accused of cronyism and xenophobia for choosing "homegrown" material and labor, so he reached out and embraced global diversity.

PS: Legend has it that as he was choosing marble Mike Z saw the sodalite blue and in it beheld Nortel's deep blue colors and the "hyperconnectivity" in its "network" of gilded veins.

Twas an omen.

http://libertymarblegranite.com/images/m_sodalite_blue_det.jpg

I hereby BELIEVE that Nortel will be the company that provides creditors with the necessary bandwidth when, not if, Cisco (Roman empire) goes bellyup.

Feb. 08. 2009
Cisco expects 1,500 to 2,000 of its 67,000 staffers to be similarly dis-employed in this manner in the months ahead.

Correct

Z-man is going to save the company $1 million per month by giving up the corporate jet. The sacrifices he (is being forced) to make....

"74. On January 30, 2009, Nortel delivered lease repudiation notices to the lessor of its two Challenger aircraft... It is estimated that repudiation of the aircraft lease and related service contracts will result in monthly cost savings of approximately $1 million."

It is amazing that ONE month of corporate jet expenses EXCEED (by 12 times) the amount of money that Nortel awards those that create intellectual property through patents for the company; i.e. estimated that $0.8 million will be paid out in 2009 (item #83 in the E&Y report).

No surprise that Nortel wants relief from the annual shareholders meeting! According to E&Y "the annual meeting would be a distraction to both management and other company resources.... [also cost savings]" (item #89).

All above from the E&Y Monitor Report dated Feb 5, 2009, available at....

http://documentcentre.eycan.com/eycm_library/Project%20Copperhead%5CEnglish%5CMonitor%27s%20Reports%5CNortel-First%20report%20of%20the%20Monitor-signed.pdf

Yeah, I remember those long lists of NT patents on public display by the main food court. Your name there is reward enough.

I meant to write "ONE *year* of corporate jet expenses...." in relation to the amount of award monies Nortel pays out to those that develop its I.P.

Also, the weblink to the E&Y monitor page is:

http://documentcentre.eycan.com/Pages/Main.aspx?SID=89&Redirect=1

Freaken ASP.NET.....

Wow!!! Beyond egregious; it borders on criminal…--bb

Even more depressing is how the "I Believe" crowd were posting on an internal blog about how to save a few bucks here and there while money was being flushed down the toilet by z-man (to be fair, I doubt all posters trying to save $2 were from the "I Believe" cult, but most probably were).

Of course, the z-man cult will respond by saying "but there are many more of us, than of him, and we believe we can make a difference." Yes, yes... but not for much longer.

Agreed.
The Green Campaigns at various campuses are enough to make one puke, if not at least put the boots to the easel or whiteboards in that carry this fluff, or better yet the people who wrote it.
The I believers must sneak in at 3am with a magic marker and flashlights telling the common worker to turn off their computer and use two sides of the paper while thr company execs get 400 million plus and money is indeed flushed down the turlet.
Clarence Chandelier head.

Graucho Marx’ “One for all and all for me” humorously (and correctly) describes Z’s and most of today’s arrogant ‘we-know-better-than-you’ corporate culture that has brought the world’s economies down to their knees. Time to get rid of that 80s ‘ME mentality’ once and for all…--bb

FYI - It appears all US employees and potential creditors got the notice:

http://chapter11.epiqsystems.com/docket/docketlist.aspx

Look at Docket 245 - open the attachment and find your name (if you're in the US).

I got mine in the mail today.

I'll be updating my Christmas card list based on these addresses.

Note that Hackney's name and address are listed here, but Zman's is not. Why would that be? Does being omitted as a named creditor allow for additional rights or is he scared of letting his home address become public?

The (hyperconnected) world is Mike Zs home.

I move to acquit - many of the names are redundant, and I'm missing some names. This is a grossly exaggerated list, a blatant forgery.

Some names will appear twice if Nortel owed monies in two categories; ie pension and severance. Confusion still exists however whether you should file one consolidated claim for all monies or individual claims for monies owed in each category. I've been told by the Epiq folks to file a claim for each category; however, BR experts have told me to file one claim for entire amounts owed. I will post definitive answer once I get one.

We appreciate (even as we depreciate)!

Forgot to mention that there is no requirement to notify creditors owed less than $5K. And, I personally know several folks who are owned money that were not on the original lists. The lists are evolving - spread the word to others to file a claim if they are owed any money. Also, watch the Epiq site for deadline to file claims.

Now this does make me curious. I'm missing the names of a few near-lifers most definitely worth more than $5k.
I'd just assumed they'd be on the first draft whilst the newbie lists might be in transit somewhere through the archives, or vice versa.

We'll see.

It would be interesting to see how many angry creditors Room 2112 can accommodate.

Docket # 207
"DATE, TIME AND LOCATION OF MEETING OF CREDITORS. A meeting of the Debtors' creditors shall be conducted on February 19, 2009 at 2:00 pm (Prevailing Eastern Time) at J. Caleb Boggs Federal Building - 844 King Street, 2nd Floor, room 2112, Wilmington, DE 19801"

"Attendance by creditors at the meeting is welcomed, but not required."

By the way, I like the room number 2112 :)

We can all meet here after the scalding.. scolding..

http://www.bowlnortel.com/news.html

CRIMES AGAINST THEIR FATHERS.

Wonder how many of the greedy executives mentioned in the article had fathers that were blue collar factory workers themselves. I know of at least one.

Having lived through the rust belt demise in NW Indiana during the mid-70s I saw first hand how greedy, self-serving management teams destroyed an entire industry (US Steel, Bethlehem Steel, Inland Steel, etc.) and, in the process, ruined families with high unemployment, high divorce rates, depression and even suicides. And how many of those children grew up feeling abandoned, desolate with little hope for their future.

That is what Mr. Z and his ‘world classers’ have done; a son of a factory worker that probably suffered the same fate as his laid-off or soon to be laid-off employees. And given that these dedicated but unfortunate employees have children of their own how many of these children will end up the same way as did many of my friends did back then. They did not just commit crimes against their fathers, THEY ARE ALSO COMITTING CRIMES AGAINST THEIR CHILDREN!

Gross and egregiously greedy miss-management -- THE GIFT THAT KEEPS ON TAKING!!!!!--bb

I just pulled this out of my mailbox:

http://chapter11.epiqsystems.com/clientdefault.aspx?pk=48f43852-fa84-4f30-8fb3-4f605af7c8d0&l=1

I do not believe Nortel can or will enjoy the liberties extended to AirCanada and Stelco lacking the tangibles and more stable markets. In both cases as usual, their shareholders suffered as they understandably will with Nortel, not that they have not already losing almost 100% of it's value of the last few short years.

That article was certainly an eye opener lending greater insight into what we can expect in further proceedings and legal costs too.

I just think that Nortel will be a far cry from Stelco or Air Canada. In Stelco's case, Steel prices also rose thereafter, and Air Canada followed with greater layoffs even after restructuring in market with a greater consistency in demand.

After all is said and done, I anticipate a traditional chapter 7 bankruptcy. I do not believe they will emerge restructured or sold as AirCanada or Stelco had done, respectively.

I believe

I believe I can fly
I believe I can touch the sky
I think about it every night and day
Spread my wings and fly away
I believe I can soar
I see me running through that open door
I believe I can fly
I believe I can fly
I believe I can fly

...........................................

In what?...--bb

In a related note, Nortel CALA is sending to GSM World Congress at Barcelona 9 executives. My company, which has 20x revenues in 2G/3G systems and services in the same region than Nortel, is only sending 4 executives in order to contain costs. It seems these guys did not notice their company is CH11....

Lets do the Math: Nortel snags 18 (9x2) new customers, you only 2 (x2=4). Also your current 20x equals all of 2G/3G. Nortel dabbles in 100G. Divide that by 20 and you get 5G.

Believe the Math.

Less,

Forget what I said about you using good logic; I was wrong...--bb

Wha - ?

When crunching Nortel's numbers is only fair to apply Nortel Math.

math aside, I find it ridiculous for Nortel to send anyone from the CALA office to Barcelona . NT.com shows offices in Spain and Portugal; therefore, their staff have the language proficiency to engage customers from Latin America at this show and forward any leads back to CALA. And why does NT need two booths at the show after having sold the UMTS business to Alcatel two years ago?
I can just picture the spouses coming along on this trip too.
Hey, why have some tapas with a customer when you can have them with your spouse on the company's dime (few left it seems)?

I wouldn't be surprised if Nortel held a press conference tmw - after church, natch - and floated some vague ideas about a possible UMTS buyback "in two to three months, if all we hold together and move forward" for about two hours, then whipped out a WiMAX slideshow.

I suppose they're trying to show that Ch11 is no biggie its "business as usual".

OK, I get it now...--bb

Heres a pic of me, I'm the one in the middle ; )

http://blogs.nypost.com/popwrap/photos/Statler_Waldorf.jpg

Yup, just what I pictured...--bb

Nortel CALA is not part of the Ch11 proceedings.

That will change due to a lawsuit dropped by a Dominican Republic customer demanding $8M due to cancellation of the Wimax contract. Placing CALA under chap 11 will hflp them preserve the small ammount of cash they have under CALA INC. Some of the cash is hidden in the regional entities bank accounts.

Not formally, but they axe will drop with the same force as in US and Canada...so, if you are thinking to cut 30% of the workforce, does make sense to spend around U$ 50K for 4 o 5 customers that are going to swap you right away?

If they don't believe and obey Hackney he has no use for them.

CALA workforce reduction will be aprix 37 %

Folks,
This is my take on the effect of the BK filing on CALA with regard to layoffs so perhaps someone can correct me if I'm wrong. The Ch11 filing excludes CALA's entities in Latin America and therefore their staff should not be part of the planned layoffs; however, the US-based staff of CALA (those in Sunrise, FL) are considered part of the US workforce and thus will become part of the planned layoffs.

Am I correct?

Layoffs in CALA will happen independently of the CH11 fillings. US based employees are reached by CH11 proceedings as far as I know. Employees from Mexico to Argentina will have severances because the local laws do not allow companies to fire people without paying severances. But it will not affect Nortel cash because there are not many employees in CALA offices outside Sunrise (around 600) and they have comparatively cheaper salaries and thus cheaper severances.

It's "business as usual", don't forget...

If business as usual is visiting Europe at NT expense, yes it is...

They are going there to look for jobs, that's why...--bb

I am sure, we already advise our guys there to avoid them...

"The wider failure of the company to avoid bankruptcy protection rests on the shoulders of Mr. Zafirovski, who could not steer Nortel into profitable niches in time.

From the beginning of his tenure, the board knew the biggest risk was Mr. Zafirovski's relative unfamiliarity with the telecommunications equipment industry --a description that applies equally to the executives he hired. His team took too long to get up to speed."

This is mind boggling. The questions for history class are why did the board pay a kings ransom to hire a guy who was 'relatively unfamiliar with the telecommunications industry'... and then why would they stand by and watch him hire a bunch of cronies who all have the same problem? I'll tell you why... 'gross negligence of fiduciary duty'.

Z was presented with numerous opportunities to come to speed quickly and surround himself with top telecom/enterprise gurus (Dzubeck, Nolle Passmore, others) who could and would have helped him in understanding the big picture and he turned the opportunity down each and every time (Riedel needs to accept responsibility for the same, he got very territorial). I also know of one HIGHLY influential Wall Street analysts that was very keen on helping but to no avail. Z knew better and was going to prove everyone wrong about his ‘deep understanding of the telecom sector’ (he openly confused his Motorola experience, which was consumer-centric with the telecom market).

What Z did was to go to his McKinsey flakes who could not telecom their ways out of a wet paper bag (with apologies to all wet paper bags) and listen to a bunch of very smart but clueless observers (note: not participants but observers) that charged him a small kingdom (would like to see their bill). What say McKinsey now? The dumb robbing the dumber…--bb

Verizon is taking Nortel out of the LTE equation and stopping purchases on CDMA beyond the bare minimum to mantain the installed base. This will inexorably hurt the margins as CDMA was the only BU that was profitable.

Enterprise can't make any money. Optical MEN will never be profitable due to market fragmentation.

Not sure the creditors will buy any new plan from Z. This goes to chap7 by may.

That is possible.
You just can't tell what is going to happen.

Nortel is at perihelion headed for a meltdown. So, so sad..-- bb

Enterprise CAN make good money if they had a different leadership...--bb

Mike Z's son is now at McKinsey.

I know; told him it was child abuse...--bb

He has been there since 2006 after NT signed the big contract with McKinsey. It was a return of favor.

7000 to 9000 layoffs being planned without severance packages paid, but the fired employees will be entitled to severance claims as unsecured creditors.

Other entities not originally included in the Ch11 are being considered to be added as well as customers are suing NT for Wimax cancellation/ breach of contract.

They will basically get nothing through their claims.
Only the rich creditors, ones who are owed tons of money wil get something.
Maybe 10 cents on the dollar.
The rest get Nothing.
You can put your name on the list if it makes you feel good.
But in reality you might as well pull the wool over your own eyes.

Perhaps people should read the Ernst & Young Monitor Report dated Feb. 5, 2009 to get the clear facts as to progress. Some of the notable facts include:

- Expected 13 week cash out-flow of $90 Million.
- Expected liquidity as of May 2, 2009 of $294 Million.
- A new Business Plan is in progress which would need to be approved by the Board of Directors, then presented to stakeholder groups. This will take several weeks of efforts.
- The Restructuring Plan comes after the Business Plan, and requires support of the Business Plan from stakeholder groups.

This suggests that Proto's Death to Nortel any day now bubble is burst. His dreams of immediate receivership and Chapter-7 are clearly not in the cards between now and May 2, 2009.

Lots of work to be done, and the E&Y Monitor Report was an interesting read.

This suggests that Proto's Death to Nortel any day now bubble is burst. His dreams of immediate receivership and Chapter-7 are clearly not in the cards between now and May 2, 2009.

This means AAN will be forced into its own Chapter 11. Bwahahaha.

At minimum Mike should get his jet back; he'll have readily earned it.

Received Nortel's bankruptcy filing notice today for US with notice of Creditor's meeting scheduled for Feb 19th in Delaware. No deadline has been set for filing claims. I suspect that date will be set at the Feb 19th hearing. If you didn't receive a notice, your name is not on the list of secured/unsecured creditors. Contact Epiq - http://chapter11.epiqsystems.com/nortel for claim form and further details.

Got one today too.

Has anyone difinitively determined if receipt of that means that you are on "the list" or not?

To clarify, around the Richardson campus, "The List" has always referred to being on the list to get laid off. Sounds like everyone got on as we are all creditors or potential creditors.

That's generally what "The List" means at RTP also. You usually don't want your name on it. Well...maybe at one time when we got our severances you might have. But "the list" in Docket #245 of creditors contains 33,636 names (see the very last page).

You must be an engineer upholding them ancient COCOS standards.
The grunts much more collloquially referred to The List as "the dead pool", "walking the blue mile","put on the slab", "dead man walking".

Receipt of this notice means you are definitely ON the list; however, you will still want to file a claim to ensure the correct amount of monies owed are recorded for you.

I disagree. I believe all US employees received this notification.

Don't understand what you are objecting to? Disagree that notice means you are on the list or disagree that you should file a claim?

Disagree that "receipt of this notice means you are definitely ON the list". Unless everyone (currently working for Nortel) is on the list, everyone received this letter, from what I have heard.

I am 100% certain that receipt of Notice means you are ON the list.. At the time of BR filing ALL employees were unsecured creditors because Nortel owed pay plus benefits. Contact Brian at Epiq if you have further questions or know of additonal people who should be notified.

So Brians gotta field 36k phone calls telling each caller exactly how much they're gonna lose?

You maybe correct! LOL

Ok, perhaps I misunderstood you. I took you to mean that being "on the list" meant "to be laid off in the short-term". That is what I disagreed with, since all employees (at least in the US) are on the list of creditors but not necessarily on "the list" to be laid off. Since Nortel is still paying our salaries and benefits, I don't understand the need to file a claim, though. I can fully understand those who were laid off last year, received a severance contract, and then were cut off so suddenly filing a claim. But not current employees. Please explain. Most of us are very new to Chapter 11 and all its ramifications. Thanks!

Nortel had to get permission from the court to continue to pay salaries and benefits. Check the Epiq site under Docket for motions granted around Jan 15. Since that approval has been granted, you are correct, many current employees are no longer creditors and will not need to file a claim. I'm not aware of a public list with names of folks to be laid off. Further I don't t believe Nortel would need to file a "to be laid off" list with the BR court.

I also disagree with part of the original statement:

You can see the entire U.S. mailing list of 33,636 people and/or businesses by going to the Bankruptcy Court Docket.

For example, included in the mailing were Richard Lowe (Carrier) and Joel Hackney (Enterprise), so unless they are being severed with everyone else in the U.S., the mailing was more general in nature.

To see the Docket, go to http://chapter11.epiqsystems.com/ and then click on Nortel and go to the Docket page.

All U.S. employees should file a claim.

Yeap, even the former CALA presidents Dion Joannou and Martha Bejar are on the list...and they left NT a couple of years ago.

List has retirees as well as current employees and vendors. It represents the creditors Nortel believed it owed which included employees at the time of filing. You need to file a claim for any monies owed.

By the way, you want to look at Docket #245 which has the list of 33,636 mailing addresses.

Perhaps this direct link will work:

http://chapter11.epiqsystems.com/viewdocument.aspx?DocumentPk=238ed688-af68-4be2-acf6-29f2ccceea5c

I like the Powerpoint slides

http://chapter11.epiqsystems.com/ViewDocument.aspx?DocumentPk=6fcca7f8-5105-4fc0-935b-86bb11fc3fc6

I understood why they could stop paying servence payement for the fomer laidoff employee. It is because those payment are pre-filing. But one thing I stilll did not get is why they can continue doing this on the upcoming layoff as this time it is post-filing. The law require sthem to pay it and they have money in the bank and post-filing debt is not protected by CCAA? Am I missing something?

By law NT us required to pay only one week worth of severance without benefits. That is what they will do.

Ontario labour law requires 1 wk worth of severance per year of employment + 8 weeks notice up to a max somewhere around 26 wks.

Not if the company is bankrupt or in bankruptcy protection.
You get nothing.

Fed. law has no such requirement. NT filed the bankrupcy pretection under Fed. So NT is not required to do so.

Someone elso please confirm?

That is correct.

Hackney might quite modestly argue that any such lawsuits were intentionally triggered to reveal and weed out the good customers from the bad, cost be damned.
Anyone who has the money to pursue frivolous lawsuits against a longtime friend is no friend.

Hackney is mentally ill. He is on constant medication to control his anger issue. He was diagnosed with IED, Intermittent Explosive Disorder. Those medications (antidepressants) have side effects, making him be extra positive / reality denial.

Could see his disturbed nature in his fixated eyes...--bb

I see an alpha male, a natural leader, a hunter whose eyes are fixed torward the goals it pursues.

u funny...--bb

lol...i see a man with a tiny package who constantly has to bully people to make up for his incredible lack of size in that department....

That's real wisdom and experience talking :). They are so easy to read, almost not fair...--bb