Nortel Expects to Complete Reorg by May

By Mark Evans | Published: March 4, 2009

With “time an enemy” for Nortel, CEO Mike Zafirovski said he expects the company’s business reorganization to be ready by next month, and that he hopes the process will be completed by “the end of April or May”.

Mike Z. told the Financial Times that Nortel is looking to complete the reorganisation plan “over the next few weeks” before submitting it for approval to the board towards the end of this month.

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  • Hotwheeler1

    Clearly you dont' know the culture inside Nortel…That's not going to happen…The directors, the managers will still be floating around..the old boy clubs are in full effect now as we speak.

  • scalpcutter

    Well it's their funeral.
    They can do what they want I guess.

  • forgive

    The only objective for re-org is to “fire” employees as many as possible without paying a penny. “Business made simple”

  • Nortel_Sucker

    Judas Z expects the reorg done by next month? Has anything Judas predicted materialized. NO.

    All you I believe losers best be running out and buying up the stock. Yaa right.
    Nobody WILL EVER buy Nortel stock again.

  • danman

    that's why the volume is about 3 million shares per day right? lol

  • NortelGal

    I agree, TIC has very good instincts and comments. What all of us still inside Nortel want to know most is which division will be sold (Enterprise or Carrier Networks) and whether certain campuses/locations will close completely (and when) — or if we should stop wondering such things and prepare for Chapter 7. It is hard to be patient as these decisions impact those of us on the inside significantly. And Nortel execs are not giving us any hints as to what is going to happen.

    Oops, does that mean they don't know themselves? Quite possibly.

  • brett5

    Oh please let it be the Enterprise Solutions unit.

  • brett5

    There's a rumor that come July the new-Nortel will be having a sales conference in LV. Perhaps they can emerge earlier than 12-18 mos as touted.

  • NortelTragedy

    yep, and to exit unwanted contract, obligations and other commitments. So much for ethical business.

    Business By Zudas.

  • RealityStrikes

    Yes, they don't know…. As Lowe said in his GIS, he “doesn't have a plan” but instead has “a framework” by which he makes decision.

    The shameful secret is that his “framework” is a dart board….

  • Nortel_Sucker
  • Nortel_Sucker

    How many did you p/u today?

  • Nortel_Sucker

    Bring it on? It already is on? Where is your head? In?

  • Texan2

    Got sick and tired of reading the docket filings… For a change, I read a book that is highly recommended among leaders that know how to lead.. The book was “Do the Right Thing: How Dedicated Employees Create Loyal Customers And Large Profits” by James F. Parker, former CEO of Southwest Airlines.

    Time frame – immediately after 9/11 when virtually every other airline in the country was getting ready to announce massive cuts/layoffs/service reductions… Key excerpt below from page 22:

    At Southwest, we made a different decision. With the full support of our board of directors and the leadership of the chairman of our board, Herb Kelleher, we decided that Southwest would not lay off employees. We would not ground any of our airplanes. We would not cut pay of our employees. And we would pay the $179.8 million to our employees' profit-sharing plan on time, on September 14, the same day our planes were allowed to return to the skies.

    The only people who took a pay cut at Southwest Airlines were the company's officers, who we allowed to take a voluntary 10 percent pay reduction if they chose. (Although we exerted no pressure for them to do so, I believe they all did.) The only people who gave up their paychecks entirely were the members of the board of directors and the top executive officers, who voluntarily gave up their pay in the fourth quarter of 2001 to help ensure that we would have sufficient cash to meet our other obligations.

    END QUOTE

    This is where I started to get emotional.

    Board and executive officers who gave up their pay for a quarter – compared to Board wanting to get paid in cash instead of worthless stock going forward.

    Company's officers taking 10% pay cut – compared to company's officers wanting to take >100% pay raise via KEIP.

    No layoffs no reduction in profit-sharing plans – compared to massive layoffs and canceling profit-sharing plans for all JCI3 and below and most of JCI4 through JCI6.

    I am seriously considering mailing every ELT/SLT member in Nortel a copy of James Parker's book. It cost me $15 on Amazon… Perhaps if they read it, it will eventually dawn on them?

  • MyHeadHurts

    Southwest is regarded as one of the most employee-friendly companies in the world. The have a “no layoff policy”, and they are one of about 10 large corporations who will not layoff or reduce employee salaries to make things work.

    The belief is, you work as a team, you succeed and fail as a team too. That corporate culture breeds loyalty.

  • Cataractus

    The Cato article was quite informative and germane to Nortel's current situation. In particular the fact that Chapter 11 bankruptcy, at least under the current rules, gives management too much leverage in selecting a reorganization plan and continuing to run the company's affairs while under protections. Unaccountable management can then use the company's remaining assets for purposes that are questionable, to put it mildly.

  • scalpcutter

    At NoTel you succeed as a manager/exec and you fail as a peon.
    That corporate culture breeds mistrust, anxiety, burnout and insanity.

  • whatnext4nt

    Nortel is the largest private sector employer in Ottawa, Canada's capital, and the largest spender on R&D in Canada, and is also the largest North American Telecom supplier. Also, it has played a central role in the development of Canada's high technology sector. A lot of people do care about the future of Nortel, but there needs to be more political awareness and action on the part of Canadian engineers and the Canadian Federal Government, as well as Provincial and local governments.

  • lapdog

    Hi,

    I am Joel's new lapdog and used to be someone elses lapdog but today I officially take on new responsibilities for Joel. Which is pretty interesting I can run technology solutions with my arts degree. You folks should be proud we are just about to turn the corner with our BIZ transformation.

    Oh wait that was a bit of a lofty ambition. Anyways……some of my good friends are interviewing ex NT people and she likes to joke how there are great claims of accomplishment until asked specifically what they did to contribute. They are reminded of office space” I am a people person”.

    I better get back to my kibble…..

  • whatnext4nt

    Excellent post TIC. If your analysis is accurate and your hunch is correct about Carrier Networks being the remaining Nortel entity (which makes sense looking at the financial results of Q4 and several quarters prior), I would expect that LTE must (or at least should) be retained as an asset to gradually replace the declining revenue in GSM and CDMA, otherwise the future value of the business emerging from Ch 11 will be diminished greatly and the Creditor’s equity stake or “piece of the action” will be correspondingly diminished. The part that confuses me in this theory is that, when questioned by analysts Sept. 17, Mike Z said that “what we did with UMTS and WiMax are examples of what might happen”. http://www.unstrung.com/document.asp?doc_id=164024

  • Casual_Observer

    what % of the R&D spend is actually in Canada ? What percentage of the employees are there ? I could see Nortel retreating back into Canada with government gurantees this won't solve anything because they will have lost their footing in the rest of North America. At this point I don't think Nortel matters as much as people think. So many people have gone thru that place and moved on with their lives. The rest will soon be forced to also.

  • exnt_x_2

    Oh ya. Here we go. That old fashioned sense of entitlement that goes along with everything Nortel.

    The salad days are over, dude. Move on.

  • protosphere

    more koolaid and horsefeathers

    they couldn't sell business unit already, give it a rest

    thinking they can appease creditors is die hard pathological optimism given no proverbial plan with their record of forecasting on the way to bankruptcy has been formulated let alone approved yet. Analysts predicted a traditional bankruptcy before they even folded.

    keep believing toungeincheeks and let me know how your invented speculations makes out, your optimsim doesn't seem to have a great track record so far

    As trying to turn the employees agaionst the proven critics, look how much money we would have saved investors vs. your happy talk to this day. No proven critic has anything against the employees, they have repeatedly stated they are on the good employees side. Not the crooks still there as fraud trials loom.

    Your posts reflects poorly on honest and ethical conduct with your fabricated attacks. Shame on you, like your pumping over the years trying to cost readers from over 99% of its value to this day. Instead I call you a Nortel lover and advocator, which is worse, go watch one of Deskjockey's videos to see. You are the employees worse enemy instead with your selective reasoning,

  • protosphere

    Excellent post responding you yourself in the same writing style?

    This is not truthful or ethical tongeincheeks as you were doing on Yahoo messageboard, how shameless. Busted yet again.

  • protosphere

    again, same poster… responding to itself.
    Same artsy writing style, same subliminal pumping.

  • pleasehelp

    Hi Texan2,

    If you get a chance have a read of “Hardball are you Playing to Play or Playing to Win?”

    The first few pages sets the stage, this is the type of book all ELT/SLT should read.

    Page 2 sums it up, “Softball players have no competitive advantage or, if they have one, may not know what it is or may be unable to exploit it. Some softball (Nortel) can drift along for years, finding ways – through trade loading, for example, or cost cutting to stay afloat from quarter to quarter. A few may seek to disguise their poor performance through activities such as creating shell customers that are questionable”

    http://books.google.com.au/books?id=nAQ5Bl5U3WE…

  • NortelGal

    Uh, protosphere, you're way off-base here. Just because I thought TIC made a good post, does not mean I am him. I'm not even a “him”, actually. I've thought some of your posts were good too. I've watched all the Nortel Downfall vids (love 'em), don't “believe”, and am not drinking the kool-aid. I just think that what TIC said made sense from a business perspective. Can I not agree with someone without being accused of being that person? Sorry, but you're just wrong on this one.

    As for your “artsy writing style” comment, I ever thought of myself that way, but perhaps I can parlay it into a post-Nortel career. :-)

  • NortelGal

    “The shameful secret is that his “framework” is a dart board….”

    Love it!

  • Hotwheeler1

    They are hiring the investment banking firm Lazere Freres t(for a fee of 15million dollars if they are successful) to look for buyers for these separated divisions. The “plan” is all hinging on getting suitable buyers …At this point, there isn't a whole lots of bites ..they will continue to burn cash, call it quit in May and go into chapter 7!.

    As usual, Z and his PR people are out of synch.

  • 4merEmployee22

    Just exactly what is the “process” Mr.Z is refering to?

    Is it about the CCAA? The Company's Creditors Arrangement Acts, and
    about Chapter 11?

    That… comes after May 1, 2009… the company would come up with the legal
    Arrangement Process to pay up their Creditors?

    The impending loosers of this fiasco are the RETIREES and PENSIONERS!!!!
    also to say the least were former employees severed or laid-off !!!

  • 4merEmployee22

    ONE OF THE THE CULTURES INSIDE NORTEL IS
    “SUBTLE DISCRIMINATIONS” . IT IS VERY DIFFICULT TO
    DETECT, BUT IT'S IN PLACE!!! AND IT”S THERE!

  • fatzoff

    A letter to the troops

    Dear Employees

    As you all know we have hit the iceberg and we a quickly taking in water. Thank you crew for your best efforts and continue to work at bailing the water out. I have instructed Pavi to go to the kitchen and dump out all the cole slaw so has to use the big white buckets for additional bailing. I shall remain on deck and make sure all the “key” crew are ready to board a lifeboat that has been put aside for them. The waters are choppy and storms are forcasted. The SS CISCO and the SS JUNIPER, have declined all our repeated SOS and appear on the horizon ready to assist once I have issued the command to abandon ship. Thank you once again and I have appreciated all your efforts during this crucial time. Now I shall bid you all farewell and it will be every man for themselves going forward.

    Mike Z

  • exnt2

    That was the old email. The latest one is

    Dear Employees,

    As you know we hit an iceberg and were quickly taking in water. This is a difficult time, the most challenging period of my career as captain. We will patch up the hole and come out of this with a stronger and better SS NORTEL. I require all of you to be focused on ensuring the leakage is stopped so we can start cruising at top speed again. All employees need to get down to engineering into the boiler rooms, propulsion, stern to get this done and continue working harder. The Own It! and I Believe! teams are in place to support resolving issues on hand.

    The crew, first officer and myself will be on deck to ensure we are on course. There is a lot of interest to help us out but until then I need all of us focused.

    Z

    Attn: Crew members: close the hatches once engineering gets to it.

  • danman

    i heard they are getting offers on the long carrier division as we speak.

  • grindstone

    “The belief is, you work as a team, you succeed and fail as a team too. That corporate culture breeds loyalty.”

    MHH, Nortel was all about teams in the 90s, but it extended only as far as you could throw a Passport. Nortel's version of teaming is: you peons are a team, you work as a team, and do what we, the all-knowing management, tell you. Regardless of lip service, Nortel's management style has been as hierarchical as Ford's ever was.

    The converse to your good argument is: when you create only the illusion of teaming, you destroy loyalty. For every employee that applauds Six Sigma, there is one that loathes it. Because it was foisted on us as a be-all, end-all, the savior processes that didn't necessarily need saving to begin with, and it created non-productive jobs where productive jobs used to exist. But that's just my opinion.

  • danman

    were u recently fired Nortel_Sucker? is that why the attitude? or did u buy $5 shares? lol

  • happyx

    I have to say I am absolutely gutted that I may well lose my job in this round. I'm a high performer and have been ever since I joined, and I have good skills & experience. But that doesn't seem to account for anything. Or the fact that I have been so loyal despite everything. I know there are many others out there in NT like me. Doesn't seem fair does it.

  • forgive

    You guys need to check what's going on with GE now.

  • exnt2

    GE is going bust. $5 a share. could be bought out or bankrupt. well if they get their dream team from nortel, their going out of business plan can be accelerated.

  • danman

    does anyone know how much the long carrier division is worth? i heared they are being offered 2.7 billion? does nortel even have ANY division worth that much?

  • exnt2

    could be. its 40% of sales so 2.7 billion sounds kind of right. would think the offer should be lower given the overhead, market conditions, customer churn which would affect revenues. I'd put my money on 2 billion.

    is alcatel going to follow. they are quite bloated.

  • synoptic

    I thought this was interesting… From the Facebook page “I Believe” who knows how true it is;

    http://www.facebook.com/topic.php?uid=428207122…

  • Asset_Number_XXX
  • trust_but_verify

    I think that it is true that HSBC went Cisco. I know they lost a 1700 unit deal for the branches. Could just be that HSBC needs to raise $18 billion just to stay properly capitalized.

  • less

    reorg, z-org, disgorg. like, whatever.

  • less

    reorg, z-org, disgorg. like, whatever.

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