$1-billion, Please

"In bailing out failing companies, they are confiscating money from productive members of the economy and giving it to failing ones. By sustaining companies with obsolete or unsustainable business models, the government prevents their resources from being liquidated and made available to other companies that can put them to better, more productive use. An essential element of a healthy free market, is that both success and failure must be permitted to happen when they are earned. But instead with a bailout, the rewards are reversed – the proceeds from successful entities are given to failing ones. How this is supposed to be good for our economy is beyond me.... It won’t work. It can’t work... It is obvious to most Americans that we need to reject corporate cronyism, and allow the natural regulations and incentives of the free market to pick the winners and losers in our economy, not the whims of bureaucrats and politicians." Ron Paul - Nov 2008

Why buy the parcel of land with the crummy house on it, when the street has plenty of clear ones to build on? It is my belief that employees are jaded beyond resurrection. I mean no offense, don't speak in anyone's name, just share my observations.

Asset_Number_XXX
re
You are right in general sense of free market economy. That's the idea but the world is not the ideal one. Nortel failed in part because the fierce competition and direct ZTE and Huawei attack. Are the mentioned companies using fair play? I don't think so. As long as there is no fair play in the market you can write books about your ideas.
I say
There is a need for political solution to Nortel's problems! .
Someone has to clean the mess and start it again.
Nortel will have to die in the form in which it is now but can be born again in another form or shape.
btw
The group is not seeking a government loan, as was previously reported. Ian Craig stressed,

"A group led by former Nortel president Robert Ferchat is hoping to raise $1 billion to keep the company in Canadian hands and is asking the government to delay the sale of its assets"
the article says..
Is Nortel veterans' call to save company falling on deaf ears?
By: Nestor E. Arellano and Greg Meckbach
http://www.itworldcanada.com/a/Daily-News/1641d...

A new article on this topic is available on itworldcanada

http://www.itworldcanada.com/a/Leadership/1641d...

which includes the following statement:

"The former executives are currently approaching financial organizations to help raise $1 billion -- enough cash, they hope, to gain a seat in bargaining table and get a peek at Nortel's most current data to be able to fine-tune their restructuring plans for the company. The group is not, Craig stressed, seeking a government loan, as was previously reported."

Chrysler was in Chapter 11 for how long? Nortel could have sold off pieces if not the whole ball of wax multiple times now. Bottom line is, if its not profitable for the GE Squad it is not going to happen and they have blown deal after deal. As each day passes the units value drops much like the revenue.

It is ironic that they want money but won't appear before Members of Parliament to discuss why they are getting bonuses under bankruptcy while cutting employee severances.

http://www.theglobeandmail.com/globe-investor/n...

"Nortel says it won't appear before MPs "
"A day after receiving the invitation, Nortel said yesterday it would decline on the advice of its lawyers."
"all matters specified in the invitation are before the courts. "

(Reminds me of their answer to further inquiry or penalty when restating a restated restatement. They claimed "work was already done" when revisions encompassed even future periods. Tanked ultimatum settlement to claim profits on having to pay less...)

“Respectfully, Nortel on the advice of counsel, declines the invitation.”
(As in "all due respect" which really means with no respect at all....)

"Some members of the finance committee made it clear they wanted to question the CEO on the lucrative bonuses, at a time when the Toronto-based company has used creditor-protection laws to withhold payments to thousands of laid-off workers and reduce pension payouts to retired workers."

“We're trying to understand how that company is reasoning that they need those massive bonuses for the senior execs and they are still making decisions that will deprive people who have worked there and contributed and built the wealth in that company.”

“It does seem to offend your sense of fairness that certain people seem to be doing very well out of a bankruptcy and others seem to be left holding the bag. Inarguably, they each made important contributions to the viability of the company.”

"Mr. Mulcair said public response to Nortel's situation is mounting and represents the strongest reaction to any issue he has seen in 15 years of politics."

“We thought it was only appropriate in our system that we give Nortel a chance to give its side of the story,” Mr. Mulcair said. “We'll be hearing from the other parties nonetheless.”

"After Nortel filed for protection, Mr. Zafirovski held discussions with federal politicians about the possibility of government assistance. Those talks failed to produce any direct assistance. "

"Mr. Zafirovski received compensation of $9.7-million (U.S.) last year."

Thank You Proto for that one
WTF is going on?
The word was Summon!
summon
summon
summon
My ESL teacher says it's the same as subpoena
but hey
Mike Z lawyers say it's an option.
WTF?
How the MPs can work in your country Proto if Mike Z can not be questioned?
Let me be clear about Mike Z.
He is a shameless manager who destroyed Nortel in last 3 years!
Where is the Plan, Mike? /that's the question/
even the Psychiatrist will have to support my motion about CEO on this blog....

So where is the Enterprise deal. Lastest rumor is the announcement has been delayed because the NT management can not come to an agreement as to what their golden parachute payout should be. Go figure.

Personally, I think this is non-sense since that is usually contractual stipulated, but I don't know how the rules change in Chapt 11.

To that end, I have been trying to provide some insight into what is happening within the company as everything is pretty much silent to the public. Regardless, at this juncture there is growing fear the dorks at the top are so inept they won't be able to get this done. In fact most managers are say, "Whatever!" So even the first and second tier faithful are losing faith.

Here is a scary notion and speculation, if Siemens-Gore buys Enterprise who just let their CEO walk, who is the logical person to take the job? I'd hope the buyer has the sense to leave the current bozo NT management to waste on their piles of cash they stole.

So the rumor going around the Ottawa campus yesterday ( a close friend still works there) is that Mike Z made a statement at Global Connect, saying Enterprise is sold and the announcement will be made before months end.

previously we heard a different version of your estimate that a vice president's close friend's friend had said ent. would be sold but nothing done yet.:)

Nortel is the world leader in VoIP with 108M lines in service in the carrier space. Their carrier softswitch platforms are the most widely deployed in the world. Their service & support of all of their products is second to none. Just ask customers and they'll tell you as much.

Why should it just be an optical company? The switching business still makes money for Nortel. That's why they're separating it from the wireless side of the carrier business. The wireless carrier business is down while everyone waits to deploy LTE. The wireline carrier switching business is down but very easily survivable because of it's huge installed base.

Of all of their business', the one that needs to go is enterprise. Great technology but no margins in this business because the competition is fierce. It is the biggest money loser by far of late.

Again, I would state that just because of the media coverage and the horrible exec management, everyone thinks Nortel should just be ground up and blown into the wind. There are very valuable technologies and actual good business' within Nortel, all primarily on the carrier side. Nortel's installed base of eqpt worldwide represents very good run rate business, but the enterprise & slow wireless drag everything down right now.

I stand firm in my belief. Dump Z man & company, bring the guys in the white hats back (the "real Nortelians"), dump enterprise and possibly wireless, and leverage the huge installed base that Nortel has (that includes the Fed Govt business which did not file Chapter 11). Most Nortel customers are very dependent upon them and so do not want to see them disappear. Talk to them and that's what you'll hear.

Most importantly, let's not throw the baby out with the bathwater as generally all seem intent to do these days.

Succession aka Carrier VoIP aka CVAS has never made a sustained profit, despite its strong market share and having a high-margin contribution from supporting the DMS business.

True, but that huge TDM base is not going to disappear overnight. 10 years ago, there were 10,000 DMS switches. Today there are 7,000. Customers are generally slow to adapt IP switching for now because 1) it's more complex than they thought, 2) the demand for residential VoIP is still in the early stages, and 3) the need for a broadband access network is driving most telco spending. Nortel sold off their access business back in 2001. Service & network models nationwide for all carriers large and small will start to look like FIOS. Nortel is amazingly enough, well positioned to steal share from the current market leaders with their new FTTP product. It's the technology coming out of the LG - Nortel JV that is being deployed in Asia, Europe, and very soon North America. Nobody else has this technology in the carrier space at the moment and it's in the sweet spot of the market. Anyway, I digress.

Customers are starting to look harder at softswitching. The burning desire to move to broadband access networks is driving the need for IP interfaces for voice switching. Customers are reluctant to put money into TDM eqpt of any kind, including access networks so if they plan it right and use gateways properly, they can also evolve themselves into a softswitch.

At any rate, while I don't disagree with your assertion regarding CVAS profitability, those 700+ CS2000's out there, drive large parts of the worlds public IP voice networks, and the CS1500 softswitch is growing base quickly. That represents serious value. Nortel is well positioned but needs to "resize" this business to reflect new realities, not just summarily executed as some would have.

Problem is, those installed DMS machines aren't generating revenue for Nortel anymore. Most carriers have frozen the software loads and have taken the switches off hardware maintenance. With declining TDM traffic, the carriers have more than enough spare parts to service the switches themselves indefinitely. Besides, Nortel and its CMs can't manufacture most of the DMS packs anymore.

JR did get Nortel out of the access business. Can't second-guess him on that; the portfolio of AccessNode, UE 9000, UE IMAS, etc was a loser. Ironically, access turned out to be a hot market. Maybe LGN can sell ONTs, but that's only part of the opportunity. In any event, LGN would be better off alone -- just like Arris, who did splendidly after they completely broke away from Nortel.

There is definitely demand for softswitching. If Nortel had their product cost under control, maybe they could monetize the demand. But product cost is a killer in many (most?) Nortel businesses.

Those installed DMS machines are all targets for CS2K & CS1500. Not all will transform but many will. There is certainly no money in the TDM hardware business but there still is in SW & services associated with those machines. I get orders all of the time. That base does continue to generate revenue, albeit not like it used to because of the decline in telco wireline access lines from wireless, cable, and CLEC competition.

Agreed that AcN & UE9K were dogs. Too complex & expensive (in typical Nortel fashion). The WDM PON product though is ahead of the competition and as of right now, there is not a single vendor out there with comparable technology. It is the only access product that Nortel has and the business is not just the ONT's. The OLT's and PON blades are a vital part of that business.

Lastly, product cost has been an issue for Nortel as long as I've been with them. If they would do away with the ridiculously lengthy & complex WIN form process and move to a quicker. simpler, approval process for pricing, quotations, and other administrative functions in general, the LC's could begin to cut cost from their products. Everyone is too focused on the trees to see the forest.

But again, I see no reason to just throw this all away. Check out AlcaLu's recent numbers. They're worse than Nortel's. NT is not the only vendor experiencing these problems at the moment. Just the one with the most debt.

Debt.
What are you talking about.
They don't have debt.
Remember the word bankruptcy protection.

Mark Evans
Congratulation for your idea of cross_posting CBC.ca. article
You/ve got about 50 posts here and there are about 120 there /so far/
Good job,, Mark!
http://www.cbc.ca/canada/ottawa/story/2009/06/0...

Let me see....$1 billion....that isn't enough to even begin to rebuild Nortel. Especially if it will be restricted to only doing business in Canada. Face it...unless someone comes up with $8 - 10 Billion to but off the ELT and the current organization nothing good will happen.

Recently I say an upate on sales base on cell sites in NA. Nortel was at 0. How do you recover a business that has decided to get out of the wireless business? Please...do not say that there is life without wireless...there isn't. But many of the old folks in Nortel never wanted it and did all that they could to make it fail. I have a very clear memory of a conversation dating to 97 - 98 where "traditional" wireline Band 9s were saying that Nortel needed to stay with wireline and circuit switching...wow how out of date today!

GM is a large part of Canadian industry and jobs, a far cry from pay happy Nortel with only 4,000 forever declining workers.

If the government were crazy enough to lend or give the largest frauds in Canada another red cent, it would be worthy of a coup worse than the Liberals faced after their ad-scandal. Even though tens of millions of gold is missing from the mint lately, I have faith in better governance today than yesterday. =)

If it were any other government, unlike this one who is distancing itself from past tyranny, I would be worried.

The people don't want a Nortel bailout and with any luck as things improve (performance to be regulated against bonuses in the news today too) the corrupt OSC who act contrary to what they are there for with their reluctance to put their pals in jail will also be tossed their ear too.

Things are getting better thank goodness. Some day they will get enough laws straight enough so taxpayers, investors, employees, and creditors will not have to worry about how loopholes and theatrics can steal massive money legally to induce such unfathomable suffering. And what's this, they shamelessly want even more? Are they kidding?

Letting Nortel fall through to liquidation would be a huge mistake. It is tantamount to "throwing the baby out with the bathwater". FACT: Nortel is still the world leader in a number of different market & technology areas. They lead competitors by up to 2 years in some cases. FACT: Nortel has suffered tremendously from gross mismanagement at the executive level which is the fault of the BOD.

IMO. the smart thing to do is to fire all of the current exec team (and BOD for that matter) and bring in the former execs like Ferchat, Craig, and Mann and give them a shot at righting this floundering ship. Certainly, everybody is angry about what Nortel has done over the past decade but there is still great value in this company and it's technology. Ferchat, Mann, and Craig can unlock this. Z Man, Hackney, and their six sigma cronies never had a clue about this industry and were only ever interested in lining their pockets. Let's get them out and let the people who ran this company successfully in the past do it again.

I strongly disagree with what you call "FACT" This is 2009. They lead no where and follow everywhere, where do you see a 2 year lead. That area would have been sold by now if that were true. They can't even liquidate after bankruptcy let alone before.

As for the Keystone. green, and incompetent management and board, they tried. It would be like scolding a mentally retarded child for chronic error. Ethics may also be a reflection of intelligence, note the academic correlation of past leaders. Hard to fill positions just became impossible to fill now. Even their financial rewards would have been greater had those risking careers made it.

Nortel is toast. Smartest thing to do is walk away and don't turn back. Unfortunately, our best and brightest (some of the best engineers in the world as Chambers might even agree) will be developing for other than Canadian firms if they are not already. Nortel had its chance and blew it with enough disappointment to make anyone see red for the damage it did. Only the criminals deserve a swift kick like Ebbers and Skilling (good luck in Canada) , the rest went down with the ship. Lets hope the subpoenas in the upcoming fraud trials will at least find them all as things improve.

Yes, t his is 2009 and much of the current leadership has been working to get out of the business. Not certain who has enough cash to bring back Nortel....but if they were able to do it to be really successful it would have to be a global company...not simply selling into the Canadian market. The Carrier Networks President has said publically that Nortel cannot compete in China and India...if not there then where? They have already decided that Nortel is not competive so just let them shut it down ASAP but of course that will be after 2 or 3 more bonus payments.

I work for them in sales. I see what the competition has out there and Nortel has optical technologies that others aren't even close to bringing to market. Do you talk with Nortel customers everyday? I do. I know very well what's going on in the market and the market is not as sour on Nortel as the media coverage would lead you to believe.

Once again, you are only focusing on the management which we all know is horrible. They STILL have great technology and lead the market in many areas. I see it and live it every day. That is a fact.

I do not talk to Nortel customers every day, no. That's a redundant question.

Can you answer
what many areas?
what parts of optical? PBT peanuts?
are the gagged analysts determining marketshare wrong?
are their declining numbers reflecting demand with the customers you speak with daily?
can you be more specific on any of these facts they STILL have great technology to lead in any one area let alone the "many" you claim as a salesperson there?

I do not even believe you are a salesperson there with the caps as a dead giveaway, no offense. The fraud at Nortel is overwhelming.

You can believe what you want. I've been in Nortel sales for over two decades. Telecom in general for almost four decades. I'm not a spring chicken. I've been through the Roy Merrills and Des Hudson days. I've seen Paul Stern nearly destroy this company & watched Jean Monty revive it.

Optical strengths: WDM PON, OME6500. MEN: ERS8600. All are very strong and are market leaders in their respective segments. The Fed Govt & military both use ERS8600 extensively and the army just executed another large contract installing hundreds more. Only exception being WDM PON which is still new in the space, but well ahead of the competition. The CVAS portfolio, #1 worldwide. Don't take my word for it, Dell 'Oro just reported it this week.

If you believe everything the analysts say, I have a bridge you might want to buy. The fact that you believe analysts any more than Nortel's fraudulent execs tells me something about your beliefs. How many of those same analysts have been correct (or even close) over the past decade of market prognostication.

Short of giving you my employee ID, I'd have no way to prove my Nortel sales credentials. I prefer my anonymity because I do still need a paycheck. And what do caps have to do with this? Seriously. You must be someone who has been hurt by Nortel, so am I. I won't elaborate so as to maintain my anonymity. You are painting all of Nortel with the same brush and that's just not appropriate. Don't blame me or any other rank & file worker bees for the fraud at Nortel. I have been equally disgusted by it. Letting that blind you to the value that does exist though is shortsighted at best. Since 2000, Nortel exec management has been intent on killing the goose that laid the golden egg to put more money in their pockets. None of them ever addressed the $12B in debt accumulated prior to the bursting of the internet bubble. So now we all pay the price for that.

I DO (caps intended for emphasis) talk with customers every day. Nearly all ILEC's have pulled back and it's not because they dislike Nortel. It's because they are under severe competitive and market pressures. They are losing access lines & revenues and are struggling to make ends meet. I have customers whose revenues are down by 25%. Certainly not their choice, but many of them have never had to seriously compete before and are at a loss to respond. A drop like this does affect spending.

I agree that the fraud at Nortel is overwhelming, but those of us at my level, continue to work hard, focusing on keeping our customers. You seem to be more intent on cursing the darkness that is Nortel's position these days. I prefer to light a candle and work through it.

Hey and then whoever buys the technology will make money. Or the "
"new Nortel"....optical only....maybe 3,000 employees top...selling only in Canada?

Even if they could sell any of their rapidly depreciating assets, this would never cover what they owe.

Everyone is becoming increasingly impatient with NoTell's tactics of late to a degree of overkill.

Being hopeful is only being increasingly delusional by the day at this stage with manyu fabricating in hope for years.

Never mind optical, they ruled that a decade ago but they have squat today. Bankrupt and still disgracing themselves with bonuses.

Hear, hear!!! Please let it be so...

Agree!!

I again appeal to Canada government and people who oppose to bailout Nortel and pls “Keep Nortel or Leave Nortel”.

Bailout will revive the company and selling it to other companies will save jobs and money can be paid to creditors.

But the condition now is Canada government do not want Nortel to be sold because 1. Security Issues 2. They think they will loose their high-tech company and will not get anything in return.

No interested in bailout bcoz 1. It will benefit peoples in other countries. 2. Nortel is not making profit.

But my question is what Canada will achieve if Nortel is closed down. All jobs would be lost. No money for creditors, shareholders.

Nortel is getting down day-by-day. So pls break this deadlock

Pls “Keep Nortel or Leave Nortel”.

PLEASE please do not spend my hard earn money of this LOST CAUSE.

My observation is that the good talents are already gone. Those who stay out of loyalty will have no problem landing elsewhere, or spinning out as new startups which will really drive innovation in Ontario.

Government should think more seriously about supporting small medium companies with promising technologies and talents. Not throwing good money after bad.

PLEASE!

Agree 100%. Investment in viable small businesses would make much more sense than flushing more capital down this toilet. How many hundreds of billions have been destroyed on this pig? It is criminal.

Z and Joel offer lifetime warranties! -)

Not only do they take their employees for fools, they take their customers for fools. A lifetime warranty from a company in bankruptcy protection! This is what it has come too.

http://www.crn.in/Networks-010Jun009-Nortel-Int...

//Nortel has introduced lifetime warranty for its stackable Ethernet routing switch (ERS) portfolio.
Joel Hackney, President, Nortel Enterprise Solutions, said, “This places Nortel in the best-in-class position for lifecycle support. Our Lifetime Warranty is the most comprehensive, the most future-looking available and is focused squarely on delivering customer benefit....//

Gee....and after cutting the standards folks that support this! Wow....just follow Cisco.

If Joel Hackney said it, it must be true ... yeah, right.

This is about as valuable as a lifetime warranty on a Sham-Wow... Scam-Wow I guess...

Or the lifetime of Nortel, whichever is the shorter.

I don't think this will improve customer confidence in Nortel Enterprise. Need to come out with a plan (sell or whatever) or it will just carry on downhill. Once there is a viable plan for all to see, then lifetime warranty will have some real meaning. Until then it is bluster.

To me it looks like a competitive response to HP Procurve which has offered this type of warranty for a few years.

I do agree though, that a plan for Nortel Enterprise is required soon. I think they are going to be sold to The Gores Group frankly.

Nothing has been sold yet.

What makes you speculate this?

So the brilliant plan is

1) Borrow $1Bn from the government to buy Nortel
2) Concentrate on building a high speed Canadian network financed by who?? You guessed it - the Canadian Government.

So the Government gets to buy Nortel and then gets to pay off the loan too!!

Genius! and people are complaining about the current managment.........

More vultures trying to get in on the feast. Nortel is dead. Those left on payroll are demoralized and marooned without a severence package. If we could just cut these world-class engineers loose with the 6-month sev packages they deserve, the will have the flexibility to put their energy into fresh entrepreneurial activities. None of these guys have anything left for this turd, and another $1B won't buy anything other than another 2 quarters of suffering and more capital destruction.

Actually, the proposal is to use hundreds of millions of dollars of R&D tax credits the EDC has already given to Nortel - and which would evaporate if Nortel is broken up and sold to foreign interests - to fund the build out. In other words, taking money the government has already given to Nortel for private gain (but amazingly not yet spent on exec bonuses) and use it for the public good instead! The idea is supposed to be win-win, but it all depends on your point of view...

http://www.ottawacitizen.com/Life/Tech+vets+sav...

The Tax Credit is actually valuable to the Creditors (i.e. us).

It happens all the time. Say after they sell off the different divisions. Nortel essentially becomes a shell company and at that point the only valuable assets are the IPRs that were not taken by the acquirer, AND the tax credits. The remaining tax credit makes the shell company valuable because a profitable company in need of tax savings can buy the remaining shell company to get the credit.

Well, lots of options here:

First of all, selling all other units to pay Creditor loan, then it (new Nortel or whatever other names) becomes a non-loan start-up.

then remain only profit portions, like Carrier and MEN (remember latest Dell Oro reported Nortel Carrier soft-switch is No.1 market share lead), or Canadian Govt. can turn this new Nortel even into a Crown Corporation, and making money from it.

It is not impossible, but just matter of who eating which portion of the pie.

I think the Federal Government of Canada needs to do an honest review of the relevance of Nortel products and technology in the delivery of essential services to Canadians. What they will find is that the majority of Canadian citizens residing in Canada receive direct benefit from Nortel technology in the essential services that protect them. This is far greater than saving a few thousand jobs.

I do not believe in a blank check given to any company to fund an acquisition or fund their operations. However, I would be in favor of funds structured against their Tax Credits as collateral to retain critical parts of Nortel technology within Canadian jurisdiction.

Nortel inspite of its well documented problems can actually be a viable concern,it has the history of creating value for phone companies,being first to market with optical technologies to name a few.

Nortel being sold off in pieces would never produce significant value for its creditors,as the best thing that could happen for Nortel right now is that the creditors cut out the parts that were created by bad management and allow them to focus on areas like MEN and VOIP carrier where they are actually relevent in the market. Unlike Z who was too stupid to know back in 2005 that Nortel would not be able to continue going on the way it was going and should have taken the drastic steps necessary to right Nortel on a path that made sense,selling the blade server business wasn't going to cut it,nor was selling UMTS to Alcatel when it was quite evident that they weren't going to compete in 3G access.

And finally the most compelling fact that proves Z and his cabinet were not qualified to lead Nortel into the future was that they used the economy as "the excuse" for filing CH 11 ,in other words if they couldn't see that Nortel was vulnerable before the global economy melt down kicked into full force,then they had no business calling themselves leaders.

There are many companies out there that have been hurt by the global recession but they are still managing without having to resort to using it as an excuse for entering banckruptcy protection.

Recessions always single out the poorly run companies.

Are you listening Mike?

I would reassess what you term essential services. What is so critical here? They are a following tanker gone bust now.

As for the tax credits, they are not collateral but intangible without profit. I would also reassess your reality there too on what anyone could bank on.

Do you personally believe that Military, Police Services, Fire & Ambulance Services, 911 Services and Hospitals as essential services for Canadians?

I think the Federal Government of Canada needs to do an honest review of the relevance of Nortel products
====
re
wow!!
What a great idea!
Let's do it!

Window-dressing, it will never happen.

MC

And I ask again... really... you're comparing Nortel to General Motors?

Nortel is a Canadian badge for a shell of a company that employs most of it's people offshore from Canada and spends most of its manufacturing dollars in Asia. There are only a few thousand employes left in Canada. What exactly is the economic impact of Nortel to Canada?

Why would Canadia tax payers and government hack want to spend money bailing out a company that has no interest in fostering economic growth for Canada?

Pride? Puuuhhhlease.

All you have to do is drive the highways to see what sort of econmic impact GM would have if it went away. It would impact millions of people in Canada and the US and that's just in jobs. The impact to car owners, parts stores, garages, etc is almost unimaginable. Neither the Canadia nor US Goverments can allow that. They are not just being nice.

Nortel is a Canadian badge for a shell of a company that employs most of it's people offshore from Canada and spends most of its manufacturing dollars in Asia. There are only a few thousand employes left in Canada. What exactly is the economic impact of Nortel to Canada?

Nortel is the central company in the high tech cluster in Ottawa. If the R&D facilities in Ottawa become idle then tis will be a serious blow to the Ottawa high tech ecosystem. Nortel is the place that graduates pass though before they move on, with the skills that Nortel taught them, to found new srart up, support mid-level companies etc. Without Nortel there is a danger that the high tech ecosystem in Ottawa will just wither away.

The above is the common analysis that one hears in Ottawa. The only trouble with it is that it was not Nortel that was the main company in the high tech ecosystem in Ottawa. It was BNR. As I see it, the BNR culture was entirely different than that of Nortel. It was BNR that created a center of engineering excellence. Nortel, or Northern in those days, was not this way. It was highly conventional, regimented and hostile to new ideas and the people who had them.

What Ottawa needs is BNR and not Nortel and BNR is long dead. Northern Telecom management killed it.

Nortel was not always so heavily into outsourcing - back when the execs who want to return ran the show, Nortel was indeed a Canadian company on the surface and under the hood, despite a large American employee base (to work closely with the predominantly American telco's who made up the bulk of revenues).

Despite the differences in scale between Nortel's meltdown and the North American Auto Industry's meltdown, Nortel does represent a sizable annual R&D investment - Canada's largest, or so I've heard. So there is some collateral damage to worry about if Nortel is allowed to slip into oblivion to feed the greed of its current execs. And if the sale to these former execs goes through, the result would be a Canadian-centric company once again, with a lot owed to the Canadian taxpayer, both morally and legally.

So this is a serious investment opportunity, even if it isn't one you'd care to take advantage of, not just a bad joke with no possibility of any return. If Nortel is salvaged in time then it CAN be profitable once given the chance - for a while it has been under-performing the combined value of its parts because the people at the top (BoD and execs) don't know how to run a telecom equipment company profitably, the way those former execs do (with proven track records in this business with these customers).

Perhaps it is too late to save Nortel now, but that doesn't mean that it isn't (or wasn't) worth saving, even if the Canadian government has to step in for that to happen. Nortel has done more for Canada and Canadians than just given them a reason to be proud, once upon a time. Sure its loss would not have the same seismic impact as the permanent shuttering of all Canadian auto plants, but that doesn't make the impact negligible, nor does it mean that the parallels in terms of indirect impacts does not hold true, even if the scale is not as large...

If said private investors were interested in bringing the jobs and tech back home I would support a bailout under the condition they refrain from prattling on about being a more focused, leaner, recognized global green team leader at innovation and synergies leveraging.

But then, bringing it home will burn a lot of cash and only make the Asians mad. Mad enough to forego greenhouse gas reductions initiatives unless we pay therm to - and, of course, outsource these green technology to lower-cost centers of excellence abroad.

Who would run the show?

How could anyone support a culture that migrated from technological innovation to financial rewards right into its final days. They loot the corpse whether they were at the crime scene or not. How much more damage are they willing to facilitate. No credibility and endless contradiction while always asking to burn money, when is enough enough... they already ran out.

Personified, this is as sinister and underhanded as any corporation can legally go thanks to existing laws they take advantage of with their powerful legal, political, and economic powers that are thankfully rapidly diminishing too.

Anyone giving it further consideration deserves further scrutiny too, even if it was viable to harlot principle yet once again under the guise of extending the benefit of doubt.

Give the cool billion (whopping one thousand million) to good employees for any start ups, and not any past or present management to burn ...if anything.

Nortel is a joke, like Enron. Only the faces have changed, the game plan remains the same... promote pals. bonuses, lie, and to heck with the business or those that finance it. They seek to milk it for as much and as long as they can, buying losing revenues to cut costs or look big with, it's so over at this point and they want to keep the tanker alive for how much longer. I guess big money attracts them like flies.

Your post got me thinking. What makes up an "innovation engine"? People? If so, is today's Nortel the same as the past Nortel? I'm not saying that one group of people is better than another. I'm only thinking that, over the past ten years, Nortel has gone through so many changes that the culture had but no choice to change. Although employees doubtfully support the executive decisions, especially the ones of late, these decisions have an impact on how employees see and do their jobs. Many employees who were responsible for innovation have left. Those that remain likely have it in them, but are they truly able to execute? Right now, no. But will changing the executive staff make it any easier? Nortel needs to go through an exorcism of sorts (IMHO) in order to get beyond the current madness. Many executive level team swaps have occured over the past decade and all have failed in some way. Is the problem partly systemic? I think so. Is change (for the better) actually possible? I wouldn't go so far as to say no, but I think there are HUGE (insurmountable?) challenges.

Nortel is losing in the market place with ZTE and Huawei.
That's why we have seen Nortel bidding below costs in India and they lost $0.5 Bill on one deal with BSNL.
On top of that someone above said

"Nortel has been plagued with ethics and corporate governance issues, dubious accounting and, recently, terrible corporate morale that would make the company difficult to resuscitate."

The $2.5 bill fraud accusation settlement is still going on with ex-CEO and CFO charged with criminal acts by RCMP and the new class action law suits for 2008 are pending....
Bail out for Nortel would be difficult if not impossible.
Nortel employees about 5k in Canada, 4 k in China some in US and India, Mexico, Poland Turkey...
It's not really true that Nortel is a Canadian company...
CEO is an American shameless manager defrauding Motorola to get Nortel's job. Nortel's customers need to be sure that Nortel will stay in business for next 5-10 years if they get the deal.
As you see, I am not delusional about Nortel, but hear me, I am for the bail out with conditions!!

Carleton University business historian Duncan McDowall said that Nortel has been plagued with ethics and corporate governance issues, dubious accounting and, recently, terrible corporate morale that would make the company difficult to resuscitate.
re
who is Duncan McDowall ?

Anything - yes, anything - is better than just letting the Zidiots destroy Nortel. I hope this initiative gets off the ground.

anything - is better than just letting the Zidiots destroy Nortel.
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re
Z-words are getting their life on its own.
but hey
if everyone knows about Zidiots, why they are still there with their hands in the cookie jar loaded with $3 Bill cash?
???????

Because the clueless BoD are like deer stuck in headlights, overwhelmed by the mess Z and his team of crack execs have created. They didn't know enough about the business to avoid Z, and they don't know enough about the business to replace him.

Perhaps the most refreshing aspect of the proposal from Ferchat & Co is that both the BoD and the Zidiots will get the sack (hopefully without severance, to get a taste of their own medicine)...

They need to more clear on what they mean by "ultra high-speed broadband network across Canada". Canada's transport network is pretty sophisticated, especially within and between the large Canadian cities. Where it suffers is in the remote areas. Building up the network into northern communities is a great idea. The problem is that the investment cannot be recouped from those who live in those communities - populations are too small (relatively). So... in order to do this, someone else has to pay. Taxpayers? Is it a loan they are looking for or a grant. I don't see how this ultra high-speed network could generate the revenue required. Maybe this has all been explained in some PPT presentation. Would like to see it. The little info available publicly certainly is not making the business case too clear.

I read where the former execs behind this are trying to cut a deal where hundreds of millions of dollars of unused R&D tax credits from the EDC already on Nortel's books (so far unused because Nortel is not turning a profit under its current bonus-mad mgmt) would be used to help fund the rural upgrade project. If Nortel is broken up and sold to foreign competitors and/or investors, those EDC tax credits would just evaporate...

Reference this Ottawa Citizen article:
http://www.ottawacitizen.com/Life/Tech+vets+sav...

The little info available publicly certainly is not making the business case too clear.
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re
good one, NortelEmp
if the idea had business sense it would be implemented by business community, aka investors, aka creditors.

Personally can't see it happening.
Just makes too much sense/cents.
In Canada that means it is a bad idea.
McGuinea, Iggy and Harpo would rather spend money wisely on things like this===
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The Big Three automakers.
Official Bilingualism.
The Arts.
Multiculturalism.
Special Interest Groups.
Minority Hiring Practices, Incentives and Quotas.
Quebec.
The Green Campaign. Don'tcha know the world is ending with global warming!
Retraining Programs to be a grass cutter or painter.
Arar.
Foreign Countries.
Free Legal Aid for New Canadians.
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Yea.
This is where all the smart money goes!

Gee, until you mentioned Quebec and Canadians, I thought you were talking about the "new" US. ;>)

You nailed it! These are the 12 top Canadian priorities.

wow, interesting enough, but why we have this topic now but not half year ago?