Manley Muses About Nortel’s Demise

By Mark Evans | Published: June 28, 2009

ManleyThe Financial Post ran an extensive cover story about Nortel’s decline yesterday, which recapped how Canada’s flagship high-tech company has fallen so dramatically over the past few years. There’s little that’s eye-opening but some quotes from Nortel director John Manley are, frankly stunning.

“It is a huge loss for Canada and for our Canadian research and development,” Manley said, adding that he is “personally and deeply saddened by what’s happened. And I am heartsick about the impact on individuals. One of the things that always impressed me about Nortel is the loyalty that employees, and former employees, had toward the company. It is a tragedy.”

With all due respect, shouldn’t Manley and his fellow board members be taking a healthy part of the blame for Nortel’s demise as opposed to lamenting about they are “saddened” that Nortel has decided to concede defeat by selling all of its assets at firesale prices?

Manley has been a Nortel director since 2004 so he’s been representing the best interests of shareholders for the past five years. During that time, the board has been responsible for approving the hiring of Bill Owens as CEO, a puzzling move given his lack of telecom experience.

The board also backed Owens rather than embrace an ambitious and aggressive makeover created by COO Gary Daichendt and chief technology officer Gary Kunis – a plan that may have changed Nortel’s fortunes. Daichendt and Kunis resigned after the board rejected their plans.

The board also hired Mike Zafirovski, who had never been the CEO of a Fortune 500 company.

And during Mike Z.’s three year reign, the board has watched as Mike Z. has suffered from a terrible and fatal case of strategic paralysis. While Mike Z. has fiddled with reducing costs, Nortel has burned. When Nortel needed a strong vision of the future and decisive strategic moves, Mike Z. has been unable to do what needed to be done.

At the end of the day, Manley and his fellow corporate directors will have to take their share of the blame.

If Manley was smart, he’d be wise to stay away from offering his condolences given he’s had a ringside seat to one of Canada’s biggest corporate declines.

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  • protosphere

    Madoff gets 150 years with no guarantees by Wall Street there aren't more Madoff's out there, the Canadian mint is claiming 15 million from their insurance for missing gold as RCMP probe, Mulrooney testifies with bells on and answers for overwhelming circumstances, Manley gets appointed to head CEOs after trading options for cash at insolvent Nortel, etc… When will it cease…I am feeling more like a conspiracy theorist nowadays, is it me? =)

  • yes4aapl

    Madoff gets 150 years
    —
    re
    In any other country exposed frauds go to the court.
    Even in many dictatorship and communist countries.
    In Canada after the first exposure they go back under cover with gag orders. We don't even know if Frank Dunn trial is pending or already over. There was the gag order on that “trial” which someone lately just posted about.

  • scalppeeler

    I heard Frank is selling calculators at the stittsville flea market.

  • scalppeeler

    Credit for speaking up?
    Credit for speaking up?
    The rest are too scared and embarrassed to speak up.
    They have a conscience and some brains.
    Manley is living the politico Dream.
    Full of BS and vinegar.
    He thinks he is stalin and can do no wrong and all the peons are wrong.
    Credit my ass.

  • scalppeeler

    Ya know as much as it pains me to say it, I think you're right.
    We might as well be communist.
    It can't be any worse than it is now.
    At least the immigration problem would be dealt with properly.

  • scalppeeler

    Oh I see so because something is broken it gives you the excuse to lie to people and make them think nothing is broken?
    Good plan!!!

  • http://nortelinsider.wordpress.com/ Desk Jockey

    How very right you are. While they certainly could not a run a company if their lives depended on it, they were good at one thing, ensuring payouts for themselves even as they defrauded investors and employees.

    This can be seen in the BoD electing to take cash payments instead of stocks/options after the Ch.11 filing. You cannot get much more shameful than this.

    And then at the same time we have Manley playing the victim, claiming he was clueless, shocked, etc. Even if that was true he should be sued for gross negligence.

  • yes4aapl

    So either Manley, you are super dumb or did not do your job as a Director. Take your pick Manley.
    ====
    re
    zeroman, let me vent here…
    He did what he was supposed to do. He is not dumb for his pocket, is he? Former finance Minister!
    Lets go back to Nortel's ex CEO Jean Monty.
    He “groomed” John Roth to be next CEO. They were friends.
    So what they did?
    When NT stock was at the pick Jean Monty shorted the stock very much so. At that time he was CEO of BCE. BCE shareholders got NT shares in spin off and NT stock reached the pick of $124 on TSX /in old numbers/. At the end of 2001 Jean Monty bragged about profits for BCE of $4 bill. What about friends at Nortel he left? They still played golf together I guess. Jean Monty did more friendly advice for his old friend.
    John Roth cashed his $150 mill or so! Should he complain?

    What BoD did when they saw that BCE is dumping Nortel stock?
    What BOD did when Frank Dunn was exposed as the crooked accountant and CEO? I don't have to use alleged here! They were very sorry to fire him, as there were close friends with him. The evidence was overwhelming thou.
    or
    next CEO Bill Owens
    BoD gave him his money! He got more than $10 mill for few months on the job but long enough to screw Nortel even more.
    Comes Mike Z who defrauded MOT from the day One.
    Did BoD know about that? Sure. That Mike Z character was the best for the job.
    Mike Z finished Nortel exactly as BoD wanted!
    end of the story
    I tried to protect my family and my friends so they did not lose on NT stock. because they did not buy that stock.
    Characters like TongueInCheek paint me as a liar when he was the one to paint rosy pictures of Nortel culture. Check how many excuses he finds today?
    That's what I call Nortel's PRopaganda machine still working.
    Discredit honest posters, divert public attention and deceive public.
    Come clean mr TongueInCheek!
    Who are you to lie so much on public blogs?
    Who pay you to do that?
    We have another example, The psychiatrist /posts above/ That character is converted now.
    He got clean many times when the facts showed crooked Nortel managers! He says he was just naive investor. I believe him now.
    So who's a$$ you have been protecting Mr TongueInCheek ?
    http://disqus.com/people/TongueInCheek/#main
    Are you playing golf together with Monty, Dunn, Red Wilson, Manley, B Owens, Mike Z?
    How much more proof you want Mr TongueInCheek?
    Do you want a proof Mike Z did lie about turn around using false margins?
    Oh you know that but diversion is your game!
    Btw
    Anyone can find that article
    Highs, then lows; [Final Edition]
    Bert Hill & Vito Pilieci. The Ottawa Citizen. Ottawa, Ont.: Dec 29, 2001.

    “BCE Inc. made the biggest splash in the media convergence game by snapping up CTV and The Globe and Mail with hardly a drop of debt. It did it by betting that the price of a huge pile of Nortel Networks stock might fall and made a $4-billion windfall when Nortel stock plunged. BCE is headed by Jean Monty, the Nortel chief executive officer from 1993 to 1997 who groomed John Roth for the top job.”

  • rfc1149

    In 2008 he got $215,273 (http://www.nortel.com/corporate/investor/report… pg. 265)

    So (not bothering to look at each year – http://www.nortel.com/corporate/investor/sec.html) he has pocketed around $1 million from Nortel.

  • rfc1149

    The really stupid thing is the the board did consult with real mechanics (the Gary's). The told the board – 'yeah your car may appear to be running ok today but it needs some serious repairs or it will not be running much longer'.

    The board 'decided' that 'hey that sounds expensive and we don't want the car in the shop'.

    So they then took it to a new age healer (MikeZ) and responded 'No no no, I don't even understand those twiddly bits under the hood (the telecom business), heck I can't even change the oil (or understand what oil is or why it would need to be changed), but they are never important. Hire me and for a ridiculous amount I'll polish up the car (LSS) and it'll be better than new'. And that is exactly what he did :(

  • Norterrible

    Check this out… this completely incompetent loser is actually being promoted that highlights the incredible lack of accountability in the business world today so I say I sincerely hope that the companies that ignored his useless tenure on the Nortel Board of Directors pay the same price as Nortel.

    “Manley to Lead Top Business Lobby Group”

    http://www.ottawacitizen.com/Business/Manley+le…

  • vvvv

    A few people in BNR RTP may still have their sunglasses promo with the inscription “The future's so bright, we gotta wear shades”.

  • MichaelGHughes

    I am sick, thur and thur, of senior nortel people spouting this fake empathy and concern. How can they possibly know what its like for ordinary people so have thier livelihood suddenly removed with no notice, severance or respect. They can THINK they know how it is, but they do not know.

    Quite simply they had DESTROYED many people and if they felt 1% of the turmoil we've been thru they would nto sleep for years.

    They have had many years to fix the patient and FAILED. Quite simply they FAILED. They might get to keep 1% of thier dignity if they actually admitted that but I will not hold my breath

    The RUINED many peoples lives – investors and employees alike.

  • How_long

    As Mark notes, he is writing about it as if he was a third party, not a member of the board of directors during the period Nortel failed. Looks to me he's trying to distance himself from it. I have a difficulty there. I don't really see how a board member can realsitically hope to distance himself from the company he was on of board of.

  • less

    Nortel brass is still abiding by its ad slogan – Business Made Simple. Thats what they meant by it. Just say: Whoa. Oops. Bummer, dude. Oh, well.

    Thats the Way. Thats Nortel.

  • less

    Nortel brass is still abiding by its ad slogan – Business Made Simple. Thats what they meant by it. Just say: Whoa. Oops. Bummer, dude. Oh, well.

    Thats the Way. Thats Nortel.

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