Musings from John Manley

By Mark Evans | Published: May 11, 2009

With Nortel unveiling its first-quarter results – and possibly bigger news – this morning, it was surprising to hear a CBC radio report featuring comments from John Manley, who’s been a Nortel director while the company has been imploding in recent years.

Manley had the chutzpah to suggest Nortel isn’t getting the same kind of financial love as the auto makers, implying that if “If I were the Industry Minister, I’d be spending as much time on Nortel as GM”.

In practice, that sounds a logical approach given Nortel’s presence in Canada, its importance to the high-tech economy, and how much money it spends on R&D.

But you have ask Manley a few questions if you’re going to let him make a statement about the need for federal government support:

1. How much blame should the board – and senior management – take for Nortel’s difficulties, which have much to do with the competitive landscape, a flawed strategic approach and accounting woes as much as the current economic climate.

2. Why is Manley speaking out now if he believes Nortel is important to Canada’s future? Why hasn’t he been acting more aggressively – both publicly and behind the scenes – to get Nortel support from the federal government?

3. Where has Manley been as Nortel has closed facilities and plants across Canada in recent years?

4. What does he and the other Nortel directors think should be done to save Nortel?

5. What is Nortel’s plan for survival? The auto makers have been forced to declare how they’re going to turn the page, what about Nortel?

Manley has enjoyed a long and successful career but you have to wonder about his performance at Nortel and, for that matter, the entire board.

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sick_sigma

What is the root cause of Nortel's problems?

Many of us believe that our problems stem mainly from the mismanagement of the board and the executives.

Manley wants to imply that the source of our problems is some shortcomings by the Canadian government.

It is awfully convenient for Manley to point the finger at someone else for his own failures.

Someone remind me again……why is it that board members get paid so much money? Funny, but I thought that there was some sort of personal responsibility that came along with the payment they get.
gone2moro

1: the board and CxO's are completely to blame for the economic success of a busines in any type of economy. If a Captain loses his ship to bad because he did not take the proper percautions he and only he is to blame. You don't blame the waves, the wind, the ship or the crew. And this is why for hundreds of years Captains when down with their ships. They would never get the opportunity to lead again.

2: There is obviously something in it for Mr. Manly. Likely his ship is sinking and he wants to go out with the “illusion” (dillusion), that he did *everything* he could so please let him work again.

3: Does Mr. Manely live anywhere near where these facilities were? It was in his interest to close them and move the work off shore or to remove the expenses. Where was he?… He was making the decision. refer to Answer #1.

4: The implication there is that they *THINK*. If you thought you could run a technology development company in today's competitive market only generating about $300k per employee….. you need to go back to business school.

5: As General MacAuther said about old soldiers… they never die, they just fade away. So to with Nortel. It's remmants will live on.. a piece here, a piece there. It will not die.. it will just fade away.
horace_grimswold

Johnny, what city do you live in again?

What was your previous career earlier this decade?

Have you lost all your connections, or are you too lazy to do knock on some doors, namely 21 Sussex Drive, and have a cuppa High Tea with Sir Stevie Harper? Or tell us, what REALLY went on behind closed doors?

Chutzpah alrighty. Mark Evans nailed it again.
Lookahead

Bsed on today's CBC moring news, the CBC new reporter is going to access other Nortel execs in following days. More interesting stories would leak out.
Ex_CS1000

I heard Manley on CBC this morning and almost lost my breakfast it made me so sick.

I sent the following comment to CBC. I doubt that they will broadcast it.

“I was shocked to hear John Manley complain that the federal government is showing a lack of imagination and leadership where Nortel is concerned.”

“Mr Manley is part of the problem at Nortel. He should look in the mirror more often if he wants to find a lack of leadership and imagination. He has served on the Nortel Board of Directors for the last five years and been handsomely rewarded for his time. In this time the company has failed to prosper, not just because of the problems in the telecommunications industry and the wider economy, but because of poor management and leadership by the executive team under successive CEOs and by the Board of Directors.”

“I am a former Nortel employee and wish all of the employees well and hope for the best outcome possible.”
less

Conventional wisdom holds that a socialist government/society protects the interests of the poor and downtrodden, providing the sincerest form of leadership of, by and for the people. It further holds that blue collar workers are the backbone of any industry.

By painting Nortel the Victim at this advanced stage in its decay, Manley is trying to goad the good people into throwing money at it – lest they come across as hypocrites. Lets show some compassion for the debilitated and dying.

His challenge remains convincing the masses that Dilbert is faring no better than Joe Sixpack, and that Dilbert's high-falutin' job is just as crucial to society as cranking out fan belts on the machine that some Dilbert engineered (damn machine keeps breaking down, btw).

Manleys speaking out ahead of the results indicates Nortel wants more money to buy – well, more time, I guess.
S_O_S_This_is_HMS_Nortel

To be fair to Manley, he's the most recognisable director at least for Canadian employees and it's easy to point to him out as the reason for Nortel's demise and the incompetence of the BoD.

Manley has at least spoke out a few times in attempt to justify their challenging situation. The rest of the board has been virtually incognito and rendering useless service to the company where the need the most – making the tough decisions. Altogether their actions or inactions have been the biggest disappointment to put it mildly for the employees/shareholders.
nblog

TORONTO, ONTARIO — (Marketwire) — 05/11/09 — – First quarter Revenues of $1.73 billion, decreased 37 percent compared to prior year period. Excluding the negative impact of foreign exchange fluctuations, the decrease would have been 29 percent

- Management Operating Margin (a) (MOM) loss of $244 million, compared with positive MOM of $129 million in first quarter of 2008

– Key MOM variances in the quarter include:

- LG-Nortel impact of $126 million vs. same period last year, reflecting significant contract completion in first quarter of 2008 not repeated in this quarter

- Cancellation of certain equity-based compensation plans charge of $91 million

- Restructuring charge of $59 million, historically would have been recorded in special charges

- Lower revenues offset in part by lower costs and higher productivity levels

- Cash balance as of March 31, 2009 of approximately $2.48 billion, compared to $2.4 billion at year-end 2008

- Customer service levels are at multi-year highs

- Focus is on maximizing value for stakeholders, including creditors, customers and employees
ntpurgatory

New news?

This too is meaningless, a chasing after the wind.

Business Made Usual
nblog

No Enterprise sale, what a bunch of bs
gone2moro

1.73B WOW!!! with nearly 25k-30k employees still on the book.. depending on which cooked book you look at. The earning per employee is somewhere between 200k-250k… if you extrapolate that earning rate over 4 quarters… and since they've asked for Chpt 11 extension it's not likely going to get better.

If $500k / employee is a benchmark, and I contend it is based on other similar companies that are performing well….. NT is going to have to find a way to get down to 12k-14k employees.

I just don't see that happening.
nblog

There is no way we still have 30k employees, the last 'official' # I heard was 22k, probably much less now.
bankrupt_bob

“We are focused on maximizing value for stakeholders, including creditors, customers and employees. “

Are stockholders stakeholders, too? ;>)
nblog

No.
nblog

New Z-Mail!!!!

And, as always, thank you for all you are doing for our company.
joremero

no my friend, not anymore
InTheRoundEye

0 / 0 = 0
ntpurgatory

Summarized:

This restructuring is going to take forever and we're not 100% sure what the end result will be, although it's coming together slowly.

There is nothing new under the sun
How_long

Damage limitation. He is a politician doing what those guys do at times like this. Making sure stuff slips off.
CatchNortel

Three Points in Zmail:

1) Loss and more loss

2) Business sale update on a later date

3) Thank you for all you are doing for our company

In essence , SCREW you all.
NortelEngineer

All About Nortel has been all about rumors. No reality at all…

Wastage of time…
shutupanddrinkyourmilk

actually I think 0 / 0 is undefined, but the concept still applies since these guys have taken Nortel into oblivion.
less

“…decisions have not been taken and we continue to evaluate our restructuring alternatives..”

No $hit, Sherlock.
NortelTragedy

Looks like his photo is a salute to Zitler.
zuperman

that's because there is no reality revealed yet…
less

• Carrier networks down 32% from 08 and 48% from the previous quarter
• Enterprise solutions down 41% from a year ago and 34% from the fourth quarter of '08
• Metro Ethernet Networks recorded a 10% drop from a year earlier and 21% percent from the end of '08
• LG Nortel down 66% from 12 months ago and 7% from the ending three months of '08

However, Nortel also reported that its cash balance improved slightly over 2008 to $2.48 billion from $2.4 billion. Nortel also said foreign currency exchange fluctuations increased its losses by 8%.

Thats right, blame those “other people”…

http://www.forbes.com/global/2009/0511/056-stoc…

One theory has it that the decline of Rome began when its leaders determined they could get grain more cheaply by ship than overland across Italy. What seemed like a stroke of genius at the time ultimately drove the empire into bankruptcy as it tried to defend far-flung overseas trade routes.

David Murrin thinks a similar scenario is playing out today, only this time Americans are wearing the togas.

India doesn't interest him. With Pakistan descending into chaos, Murrin says the danger is rising that Hindu nationalists will grab control of India and push the region into war.

“You [Americans] are going to suffer the same fate Britain did” after losing control over the Suez Canal to Egypt, he says. “If you have spare dollars, get out. The dollar could lose 50% of its value in ten years.”

Or – throw Canadian money at low-cost Centers of Excellence abroad
bankrupt_bob

1. How much blame should the board – and senior management – take for Nortel’s difficulties, which have much to do with the competitive landscape, a flawed strategic approach and accounting woes as much as the current economic climate.

99.9%

2. Why is Manley speaking out now if he believes Nortel is important to Canada’s future? Why hasn’t he been acting more aggressively – both publicly and behind the scenes – to get Nortel support from the federal government?

Better late than never?

3. Where has Manley been as Nortel has closed facilities and plants across Canada in recent years?

Spraying his hair.

4. What does he and the other Nortel directors think should be done to save Nortel?

Whatever it is, it's wrong.

5. What is Nortel’s plan for survival? The auto makers have been forced to declare how they’re going to turn the page, what about Nortel?

They are still in the process of restating it.
protosphere

ANN provides invaluable proven insight.

Only rumors I see recently are coming from relentless multi-IDs inventing what might be sold, to who, for how much, in how than if they will restructure, etc..

You are not a Nortel engineer, why did you make up take that ID.
Engineers are not artsy to invent silly terms like “wastage”?
Shirley, you can see how untruthful from inception sounds.

It is only contradicting Nortel, and its unrepentant relentless cheerleaders who unethically attack in the absence of happy talk, that fabricate or post rumor. Who tried to waste energies over the years with false and misleading selective information than the unethical unethical hit an run patronizing and totalitarian shameless cowards. It was not the honest proven civil critics. It was happy talk than encouraged readers to lose over 99% in their stock value, do they even care today than still pump only you can answer?

If you don't like AAN, why not just simply go away than negatively comment contributing nothing to topic than lie. It only insults readers intelligence who can see bitter and empty headed insults increasing lately from same person with many IDs who use same terms like “spin” pathetic” “call out”, etc… dead giveaway /same challenged depth wasting our time to expose.

Read what Nortel said this morning for example vs.the numbers doing the talking, and these numbers are not “rumor” but “reality”. No “wastage” of time here. We post stuff like this all the time. All about Nortel =)
________________________________________________

“Revenues were $1.73 billion for the first quarter of 2009 compared to $2.76 billion for the first quarter of 2008,” (down $1.03B)

“Management Operating Margin loss of $244 million, compared with positive $129 million in first quarter of 2008″ ($373M differnce)

Down $276M for: “special charges” (59 million), Cancelled equity plans (91 million), LG (126 million) (LG interest recently put on the auction block to release available cash before they run out of cash by this summer)

Didn't substantially add to cash yet creditors and debt grow
This dramatically offsets any “stability” like good news or everyone is blind to this

praising the employees he needs, who he gags and cuts severances while hyping fluff

bankruptcy is mentioned last in what impacted them by less customer spending when even margins declined less burden by stalling debt payments and suppliers, creditors, etc..

Taking appropriate steps alleviating coming right out and saying everything is for sale
“decentralizing” carrier means spitting in parts as they try to sell anything not nailed down to live another day they call “to better serve customers” (by the buyer if any)

the casino and railway orders hype is hysterical too

Even if they could sell a business unit. the death spiral continues with less revenues from that unit

“Discussions are taking place with various external parties, however, decisions have not been taken and we continue to evaluate our restructuring alternatives.” Meaning, no buyers with in discussions only… and for how long now already… before they simply run out of money.

numbers do the talking now… never mind traditional Nortanic and the way or the order they present things, they are ……. toast
less

Speculation. Mere Numbers. As opposed to, uh, Fact, namely that: “Nortel is a recognized leader…”
gone2moro

ok.. so if NT could sustain 1.73B / qtr then the rev/emp is still hovering around $314k.

Again what's the PLAN to remain competitive against telco vendors getting $500k-$600k / emp?

That's what needs to be answered.
dljvjbsl

The Ottawa Citizen had a story which indicated that Nortel had made several proposals to the federal government for support. The difficulty was that these proposals were unfocused and ever-changing.

It would appear to me that the issue with government support of Nortel is more with Nortel management than the government. Nortel still does not have a restructuring plan that has been clearly enunciated to the public.

The government as quite clear to GM that there would be no support if there was no clear path to viability. Nortel seems to have even less than this. If GM had only vague plans, Nortel seems to have so may different plans that it is impossible to find a clear one.

Nortel believes in planning. it has a new one every day.
protosphere

Johnny looks like a nice boy but maybe he is just a little bit slow, that's all. =)

It wasn't here's Johnny on the spot that slippery Nortel needed any more than the stigmatized ad-scandal that never did stick to Johnny. They needed his team of grubby little friends and big title of ex-finance minister, like an ex US admiral, like who dares question these guys. =)

Nortel needed to find loopholes and friends that benefited them.

Now, even they have run out. Numb parrots are hard to fill roles at that capacity to risk careers/ They needed someone green to bring Nortel to its new levels. Some a turnaround time and buying opportunity visionary with stellar forecasting skills than downplaying revisions and bankruptcy while calling stagnant cash balance as good news amid growing debt and creditors. =)

What does Johnny want all of a sudden, taxpayer money after EDC exports jobs, after Ottawa already lost 16,000 with 4,000 left, after UIC burden indirectly paying what their severances should have…

heh…more money to burn please to thank them like their employees. Even creditors wanted to see a plan before severances.

This is like a police officer not knowing how to write up an outright pejorative crime. Even ambiguity can't save them now when that money runs out too. At least Johnny will still be working when Nortel disappears, whats a lame theatric or two going to hurt, after all that's what he gets paid for, or more specifically and ironically trades options for cash like the last board pulled =)
protosphere

“proposals were unfocused and ever-changing”

A dupe… a macro ambiguous traditional ploy to dupe and steal
/extending the directionless pay happy crap shoot . Another punch line.

Had enough contradictions over the years let alone today
Insolvent after already burning and printing so many billions.

What would they do when, not if, money ran dry again, “ever-change” the forever eluding plan?

Selling assets means less revenues, while already less revenues makes these assets worth less in their catalyzed death spiral

Maybe in Canada the government would have bailed Enron too, is that it?

They already served as a too expensive pay happy philanthropy to their customers and extension of our universities long enough. No plan, no money… even if they did have any credibility.

Can't sell anything from products to assets in this final lap as they exalt others cash like a golden cow they delaying its destiny of diminishing.

Cash is stable but they are not, it is not their cash, they printed and burned enough already, sold anything not nailed down, adding insult to injury to remain “unfocused and ever-changing” amid Murphy's Law Tsunami.
CatchNortel

“The commitment is that in addition to maximizing value for our creditors, preserving employment and our technology platforms is at the heart of my decision making. ”

–I hope he really want to preserve employment while selling BUs.
fatzoff

With NO due rspect

Manley is a POS
Another_Nortel_Watcher

Does anyone think that the leadership team that couldn't put together a credible corporate strategy and execution plan before bankruptcy protection is capable of managing a restructuring plan? Why would anyone with any intelligence think that the Nortel stooges are capable of this? Why does the board leave these jokers in their jobs even now?

Consider this radical thought: if the BoD and the cabinet team went to the government and stated that they were incapable of running Nortel and requested Government support to keep Nortel running while capable replacements could be found, do you think the government might step in?
Nawww… likely not. Just wishful thinking on my part.
sirkennethrobertmanley

John Manley
Has done all anyone can do for Canada
sirkennethrobertmanley

The name Manley has always stood for public service from the shores of Canada, Jamaica, England, Ireland and even the USA.
sirkennethrobertmanley

John Manley
Has done all anyone can do for Canada
sirkennethrobertmanley

The name Manley has always stood for public service from the shores of Canada, Jamaica, England, Ireland and even the USA.

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