Canada: Post-Restructuring

The question is not “how many jobs in Canada will survive”, rather ” Should Nortel be allowed to survive AT ALL with its current management team”. The way Nortel's execs, Board of directors and other management has acted is shameful and incompetent.

Board of directors has been approving bonuses for Mike Z and Mike Z in turn has been spending money on private jets – a facility in use by Board of directors and himself. They have created a corrupt system – just like the rest of corporate America.

Now look at the management team of Nortel – I am talking about a team that is completely screwed up (sorry for using a “bad” word but thats what they all are). Majority of the management (including Product managers) have no vision – no touch with market and customers – they don't know where the technology is headed and why certain products / solutions should be defined in a particular way. Seldom do they perform any research or include people who have been in touch with customers to know if they are on the right path.

Engineers and R&D personnels will go out and create products which they have been told to build. But these people need guidance and directions in which to build – they are told to build magnanimous products with all bells and whistles irrespective of cost of the final product or if the market is asking for those bells and whistles.

Product managers inside Nortel are a joke – they are supposed to be a bridge between R&D and customers. Most of them have never met customers, not read any analyst reports, and were below average software designers. They knew how to work the system i.e. build consensus and move upwards. Its a case of blind leading blind.

There is no concept of accountability in Nortel. During Mike Z regime, the only business plans that caught attention from execs were the ones that promised $1 Billion per year business. Those approved got funding and were never tracked – all of them were abyssmal failures – getting revenue of less than a $250K in the first year of production. Instead of asking the product managers to do some analysis on teh failure – they continued to put in another $35 Million (in one case) to make the product better because they thought it was a quality issue. Next year – the product made $450K – Surprised !! No – because the issue was not quality – it was misreading market potential and capacity of Nortel to deliver and execute. And the product continues to be built inside Nortel – with increased funding while the company spirals towards its bankruptcy.

Majority of the Middle management is very low grade and poor quality. Bean counters or stressed out sycophants. Nortel has created a system where rising upwards means you must be a sycophant and belong to one of the factions inside Nortel. Nortel is a divided company – with infighting between execs, sites (Ottawa and Richardson). They try to piss on one another because they want to survive and the execs like Mike Z have no clue how to resolve those issues. The exec team is imbecile and board of directors is delusional. In addition to all that- the management team chooses people not on the basis of their capacity and willingness to do a job but where they want to squeeze them into. If some one is not good at customer interaction ( and has mostly been doing below average programming) – the management team will make sure that the person is put in front of the customers and allowed to make a sorry case. All this because some manager wanted to get rid of the below average designer and could not because another senior manager was watching over the “poor” designer's head.

Such a company should not survive. How can the creditors trust such a team with restructuring in 18 months when in last 3 years – the same team has been UNSUCCESSFUL to prevent the company from falling into CCAA/Chapter 11. Especially now that the economy is in doldrums !!!

Once upon a time – Nortel (read BNR) was the cradle of innovation but now it is only left to be paper pushers and clerks who know how to write code. No creativity – no touch with customer and market place and no accountability for decisions taken – it acts like a crown corporation .. Saddens me to see this happen to a great Canadian company but its true.

1. Fire the board of directors,
2. Fire all execs
3. Charge the board of directors and execs with criminal negligence and
corruption.
4. Sell the divisions to suitors (it will be a fire sale)
5. SHUT down the company and create a museum out of it – will be more
profitable.

Obviously the real answers to your questions will be dependent on the Business Plan moving forward, including what business units, if any, will be sold. My speculative answer would be 30% staff reductions, not including any business units sold as part of the restructuring.

Complete destruction of Nortel isn't the answer either.

Exceptional…–bb

Wow… rarely have a read such a dead on account of why Nortel is in the state it is in. No vision, and all decisions based on internal politics first and foremost. The thing about PLM is spot on too. They simply try and give customers whatever they ask for, no matter how ridiculous the request, with no thought towards any sort of “management” of the “product lines” someone should tell them what PLM stands for.

Wow, bang on. If I were a major creditor, I would not vote to approve any restructuring plan that didn't at least include your steps 1 and 2. It bothers me that the courts even allow Mike Z to lead the restructuring effort given what he has already done to the company. It makes no sense.

The campus takeover sounds like another vechicle for a bailout. Regarding Canada, salaries and incomes will have to come down during this global depression. The same goes for the US (happening already) and other developed nations. Given that the globe was in a credit/debt bubble, I wouldn't expect Nortel to survive at all as there are too many stronger players in the sectors in which they are in. I expect. Canada and its citizens would be better off looking to other stronger companies like RIM in order to move forward. For those that are skeptical of the size and scope of this economic crisis there is still more to come: more pension implosions, higher unemployment, lower demand, stricter credit lending standards, more protectionism and more bank losses are ahead.

What is KEIP?

Key Employee Incentive Program

Basically the managers/politicians will stay and the smart, effective employees will get let go as usual. This will only further strengthen Nortel's competitors and put Nortel out of business.

Over years and years, Nortel had been using similar internal rating system to “get rid of” employees legally by rating them “low performer” and something else. Interesting enough, many survived employees did buy this story and believe they(survivors) are smarter or higher contributors to the company and view these folks out of door as “loser” or “ineffective” etc…..

This COULD cause lots of tensions internally even something out of control. We will see what happens next given people let go gets nothing but HR notice to be qualified to line up at EI application line.

Bullseye!

It has being said here over and over… can't you just google it or look for it in wikipedia? Well maybe not, I mean, usually racism is a clear symptom of stupidity.

layoffs took place quietly last week.

You seem to share the same sentiments as many other commentors I've read over the past few weeks – let me throw my $0.02 USD in just for a different perspective:

1: Firing all of the executive team at this point would be a disaster. I'll admit they've not done much substantively in the 3 years they've been here to get things turned around, for reasons I'll get into in a moment. Given the complexity of Nortel's legal & financial structure (go read the filings if you don't think it's complex), and that there is a limited time frame they have in which to produce a restructuring plan with a hope of coming out the other side, firing the execs and having to bring a whole new set up to speed while they're also having to develop a restructuring plan for a company they just arrived at would spell Chapter 7 in a heartbeat.

2. Around the Carling campus & the Canadian government: Nortel's got a 2 million square foot campus, when they really need only a fraction of the total space. Even if all the employees came in to work they'd still only fill maybe 3 of the labs up there. It just makes sense to try and get out of that lease and into a smaller facility.

3. Around leases in general – Nortel's had sites that have been sitting completely unoccupied for several years, and couldn't get out of the leases. That's another drain on cash that drove the company where it is.

4. Around middle management – COMPLETELY agree. A lot of bad rap is given to Mike Z and the execs around not being able to turn the company around. It's hard to turn a company around if the directors, sr mgrs, and mgrs don't believe in the strategy and refuse to implement it. Most of middle management has been blissfully ignoring any changes of direction that have headed their way for years pretending that everything was going to go back to the way it was when Nortel was in its heyday. Prime example of no accountability– you announce a travel freeze, and people still travel as if there were none. Same with a spending freeze, etc.

5. Half the product lines are making profit by pure chance. There's nothing that ties together the costs that it takes to produce a product or service, and the price at which it's sold – or the forecast market for it. I know of at least 3 products that were destined for failure from the outset and yet money is still being pumped into them. They've also got a habit of adding features to products that no one in the market has asked for – just to say they've added a new feature. Or creating a product that really has no market at all – and somehow making a business case that it'll be profitable.

All in all, I guess the point I'm trying to make is that the problems at Nortel are a lot more systemic than just the executives. It's about time some of the middle management and IC's realized that they're just as much complicit in where the company is as the execs, get the sticks out of their collective tails, and work to turn the company around instead of wallowing in worry.

No worries – Obama, the EU and PETA will fix it all and for free. All we have to do is doante more pocket change to CommonDreams.org to raise more Awareness and initiate more Change.

KookAids on the house.

Rimshot!

Yes, his brilliance is certainly impressive to people of your mentality, isn't it little DJ?

Keep 'em coming TK, your short fuse is amusing!

Nortel could not be saved because:

1. All the indian and chinese managers were laid off and none have been part of the executive and senior management team now. Consequently, the management team is very NA focussed, arrogant and lacks much needed “common sense” and global perspective. It shows in their decision making over the past several years.

2. The problem lies deeper than the executives and propogates throughout the layers of management that Nortel has. The fact of the matter is that having worked for BNR in the 80's, most mangement here is living in those glory days of BNR and are trying to re-create that environment without living in the present. Others are just killing time to hang on to their jobs as long as they can and are ready to do “whatever” it takes.

3. R & D has been without purpose or commercial interests in mind. Product portfolio's are outdated. Acquired products were never fully integrated.

4. People here value relationships more than performance. You watch my back, I shall watch yours.

5. This company doesn't understand sales and marketing principles at all.

Among other things these are the main reason's that they are driving the company into oblivion. There is nothing more dangerous to see in a company's management than “Ignorance in action” combined with “Little foresight, judgement and proactiveness and vision” to adjust to the new environment we live in today.
Whatever is being done now is “too little too late” as the company is past the point of no return.

All these smart, fast talking executives are well intentioned in turning this company around but in reality “don't know how”. Consequently, they keep on talking about strategy, future direction and make decisions without having the slightest clue. As a result, “Truth is far from reality and is whatever the management can make others believe in”. Employees and shareholders are susceptible and gullible to their expert judgement and words of wisdom.

In reality, the management really doesn't care about the future of the company, the employees and the shareholders but are looking out for themselves.

They are already rich and just playing a game for which we have to pay the price. Even if you replace Mike Z and team with a new set of top NA brass, it won't change anything. Didn't we try that a few times already.

This company needs global managers with real world experience and strategy preferably not from NA. The truth is hard to swallow. We don't want any more corruption. We want hope. We need Barack Obama clone for Nortel. We believe.

What did you hear?
Is something going on there?

What are the rumors about the Montreal campus?
=======
re
Be optimistic and be prepared for the worst.
Remove private belongings from the office, take your RoloDex, keep your RoloDex at Home,…
All the signs I see show that momentum is pushing Nortel out of the cliff..
Nortel will not survive past May 31in the form we know her.
Creating restructuring Plan is a joke!
Nobody knows what's going on. Customers stopped buying from Nortel, example Verizon and LTE..
How long can you feed the Giant without sales?
my simple math tells me few more months…
and the new Propaganda has started to confuse everyone.
Now they divided the preparation into 2 steps
Step 1 make the business Plan in few weeks
Step2 Create Restructuring Plan in few months…
what a joke again?
How can you make business Plan not knowing the Big Picture?
I don't have to mention that Business Plan build upon Restructuring ideas should show how Nortel is going to make money in the future.
I say, because Nortel lost credibility as an independent entity, there is no way for most of the customers to deal with Nortel directly ever again. conclusion?
Nortel should look for business partners /assets sale/ to use their names for doing business.

Montreal,Calgary, Belleville,Santa Clara,Campinas have been at the top of the list for a while.

Remove private belongings from the office, take your RoloDex, keep your RoloDex at Home,…

Also any proprietary documents, software, etc. Grab whatever you can. It can only help you down the road with your new employers, even if they don't know where your insight and incredible coding skills come from (best if they don't).

That's your severance people.

Yes but Morin lives in Montreal…