Nokia Siemens Plays Nice with Canada

By Mark Evans | Published: July 2, 2009

Nokia Siemens Networks’ efforts to win public support for its $650-million bid for Nortel’s CDMA wireless business and LTE R&D unit went on the offensive yesterday when NSN CFO Luca Maestri told a press conference in Toronto that the company not only plans to keep all 800 wireless jobs in Canada but add more as its makes Canada a global “next-generation wireless development” centre.

“I made it very clear we want to make it the centre of excellence for LTE technology for us,” Mr. Maestri told the National Post. “We really want to keep Ottawa as a centre of excellence — it is going to be a global centre.”

Nokia has a vested interest in keeping jobs in Canada given Export Development Canada, a Crown agency, is providing $300-million of financing to support the company’s bid.

While there is a possibility that another bidder may emerge for Nortel’s CDMA business and LTE R&D unit, Nokia is clearly hoping that it can win approval to expand its North American foothold.

More: Unstrung has details on Nokia’s plans for Nortel’s LTE assets.

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  • broadbandbill

    “Exporting jobs to higher quality geographies” – are you listening Mr. Z (and yes, you too Mr. Welch – you overrated piece of management crap!).

    No wonder Nokia is the buy-er and Nortel is the buy-ee…–bb

  • Teleguy

    Center of excellence??…exactly the same language Nortel used for it's outsourced operations in Mexico and Asia. They were the first to go in Chpt 11.

    I think Nokia knows a good deal when it sees it, so I have no doubt they will want to foster the growth of the operations in Canada and the U.S.

  • exnt_x_2

    …not only plans to keep all 800 wireless jobs in Canada but add more as its makes Canada a global “next-generation wireless development” centre.

    You have no idea the resentment Canadians have for the foreigners swooping in to take our jobs. And if you weren't born here, you're not a Canadian.

  • horace_grimswold

    Compendium of Nortel divestitures which have resulted in “Centers of Excellence”

    –August 1999: SCI acquires Nortel manufacturing assets
    http://findarticles.com/p/articles/mi_m0BFP/is_…
    “Under the agreement, the employment of the existing personnel in Brockville will continue. Potentially higher volumes of business at Brockville resulting from the agreement announced Tuesday are expected to lead to the creation of up to 200 new jobs, and first consideration would be given to Nortel Networks' Belleville employees.”

    April 1, 2002: SCI closes Brockville manufacturing plant
    http://www.highbeam.com/doc/1G1-84903547.html

    –June 5, 2000: Solectron buys Nortel RTP facilities:
    http://triangle.bizjournals.com/triangle/storie…

    October 9, 2001: Solectron closes RTP facilities, 306 laid off:
    http://www.wral.com/news/local/story/100084/

    —May 5th 2000: ST Micro acquires Nortel Silicon Operations
    http://us.st.com/stonline/press/news/year2000/c…
    “Under the terms of the agreement, approximately 470 Nortel Networks employees will receive offers of employment from ST. No job losses are anticipated as a result of today's announcement.”

    May 31st 2001: ST Micro closes Ottawa plant:
    http://www.st.com/stonline/press/news/year2001/…

    —October 7th 2002: Bookham buys Nortel Optical Components Group:
    http://compoundsemiconductor.net/cws/article/ne…
    “The deal includes the sale of Nortel’s transmitter and receiver business in Paignton and Harlow in the UK and Ottawa, Canada and the pump laser and amplifiers business in Paignton, Zurich in Switzerland, and Poughkeepsie, NY. The transferred assets include patents, other intellectual property and trademarks. Approximately 1,000 Nortel employees will be transferred to Bookham.”

    1 year later: Bookham closes Ottawa facilities:
    http://www.photonics.com/Content/ReadArticle.as…
    “Bookham said approximately 75 percent of the 200 employees at the Ottawa facility have left the company, and the rest are expected to “transition out” as they gradually complete fab shutdown duties by the end of the year.”

    —June 30th 2004: Nortel divests manufacturing to Flextronics:
    http://www.emsnow.com/newsarchives/archivedetai…
    “Under the terms announced today, it is also intended that approximately 2,500 employees would transfer to Flextronics. Of those employees, approximately 900 in Montreal, 650 in Calgary, 100 in Ottawa and 30 in Campinas will transfer to Flextronics. Under the terms proposed in Europe, approximately 440 in Monkstown (including approximately 55 designers) and 330 in France would transfer.”

    April 2008: Flex St-Laurent closes: http://www.allbusiness.com/company-activities-m…

    Moral of the story: Nokia Siemens can say whatever it wants, but Nortel's history speaks for itself.

  • rfc1149

    Tell will tell of course.

    Your examples all appear to be manufacturing oriented. Nortel's UMTS sale to ALu seem more on point and it seems to be fairing reasonably well within ALu. It is even hiring (small numbers) of additional Nortel people.

    Similarly I would suggest that the future of the Nortel bits within NSN will depend on how successful NSN is in LTE (CDMA's days are obviously numbered) and how successful the former Nortel bits are able to add value to NSN's LTE solution.

    Based on the UMTS example it is not ridiculous that this will be reasonably successful but success certainly is not guaranteed.

  • Anonymous

    If EDC is injecting to recover, I hope they aren’t throwing good money after bad.

    Keeping employees as wonderful as this might sound, I hope is not just a contagious pipe dream or another investment of desperation yet again.

    Does NSN even have a plan? Or is this a just another gamble with them too. =)

    I hate to sound negative but there is reality.

  • protosphere

    Is this a pipe dream or another injection of desperation to recover what the EDC invested in Nortel.

    I hope they aren't throwing good money after bad, even though keeping jobs sounds great again.

  • protosphere

    Do you have a link ALA-LU is hiring even small numbers?

  • protosphere

    “I think Nokia knows a good deal when it sees it”

    Have you calculated the revenues and at what margins they will need to recover this initial $650M injection? Seems the only winners will be their customers, if they can keep them that is.

  • borissss

    I don't believe that they will keep the jobs for years.After a couple of years,they will start cost-cutting process too.These greedy monsters can kill for a penny.I bet,two years later china will be the centre of excellence for LTE since engineers earn 10 dollars per month there.

  • zeroman

    'Lies – all Lies' from the movie Austin Powers rings in my ears.

  • boo_urns

    Wow, with a comment like that, you must be a true Canadian!

    So I'm guessing if you were to trace back you're entire family tree, you would find that you're ancestors were all born here, lest they be called…”foreigners” (shudder)…oh the horror that would be.

    Please tell me, is it true that ignorance is bliss?

  • darthbane

    I work in Mexico and currently no entity is on Ch11, nor the corp office is Sunrise for CALA…yet.

  • rfc1149

    Sorry no link, I happen to know some of the people.

  • broadbandbill

    Not very worldy of you Mr. Ehhhhh?—bb

  • NTblinker

    Do you think NSN deal will affect your job as to the company you will work for. Nortel or NSN? Will you be transfered to NSN or Mexico Nortel will not be affected from this CDMA sale process due to there is not a CH11 filing there.

  • freqmgr

    Based on business reality I expect that NSN will “keep” 1) customer facing (VzW, Sprint, etc.) employees….the marketing folks and 2) only those “technical” types needed to make a show presence in varous standards bodies and other places that may continue to tweak CDMA. The former are important to NSN developing mindshare in the LTE marketplace, the latter are window dressing. Bottom line is the latter group has a very limited future with NSN and will also be limited in numbers. Remember…the 2500 jobs to be “retained” are not all in Canada, the US or any single location…but represent Nortel's presence in front of their CDMA customers globally. Let's reveiw 12 -18 months after the acquisition to see how many of the 2500 are still with NSN.

    As for Alu….how many of the former DSC folks are still with them? Many of those jobs in the US went to folks with lifetime contracts in France.

  • NortelEmp

    I'm a Canadian and I don't agree with the “resentment” statement. Speak for yourself, not for all Canadians.

    I do believe that Nokia Siemens' behaviour is related to the $300M from EDC. It appears that they guarenteed 800 jobs over 5 years, or thereabouts.

  • freqmgr

    When Nortel divests itself of product groups what will the good folks in Sunrise and DF sell? Those dealing with CDMA marketing should still have a role. The Center of Excellence, indeed the Torre Mural, will be emptied out.

  • scalppeeler

    Doesn't matter.
    Anyway you slice it employees who are transferred to NSN are winners.
    Absolute worse case is they get laid off after moving to NSN.
    They get to keep their seniority upon moving and they get severance.
    That's more than they'll get at Nortel.
    And that's worse case.

  • NTblinker

    So only Matlin Patterson can survive the CoEs globaly set up.

  • rfc1149

    Agreed, time will tell.

    CDMA development is obviously coming to an end, so any future will clearly depend on LTE.

    It is easy to see Verizon's hand in all of this. Nortel has existed for the last quite a few years essentially to be Verizon's alternate equipment provider. There was a 'covenant' between Nortel and Verizon ('You build (more or less) what we ask for and we'll give you a comfortable existence.')

    With the evaporation of NA specific standards, Verizon no longer needs NA specific vendors and can look for world class companies. The covenant is now broken. Verizon has explicitly told Nortel that they no longer consider Nortel a 'tier one' provider. It does like some Nortel technology and does want to keep doing business, though.

    It is depressing that when told their entire business model was defunct, Nortel's 'leaders' were too stupid to understand what this meant and too arrogant to care. :(

    In the LTE trial, VzW did like Nortel's technology but had no confidence in Nortel's ability to deliver a solution (especially once the 'big boys' got serious). NSN of course did not do well in this trial. NSN can now come back with key bits of Nortel technology provided by an actual tier one provider (along with as you allude to all the Nortel relations etc.).

    The future will depend on a few things. 1) The success of NSN's LTE offering. 2) The ability of NSN to see value in Nortel's technology (certainly not absurd) and to be able to integrate it (independently of VzW) 3) If VzW is sufficiently interested in the combined offer.

  • freqmgr

    No, Matlin has little chance of doing that. Without CDMA Nortel will have no presence in CALA, why keep a CoE?

  • freqmgr

    TMO supposedly also like Nortel's LTE solution…except it didn't conform to what they had asked for. The main value for NSN in buying that portion of Nortel's wireless business is the access to the CDMA customer base for the ability to market LTE. Of course LTE Advanced has a set of regulatory issues that Nortel just doesn't care about and NSN has yet to really begin to deal with.

  • rfc1149

    Don't want to quibble too much around the word 'main'. I would say there are a number of values, some 'slam dunks' some more with potential.

    Unequivocal
    - (As you mention) relationships with a number of significant customers
    - Nortel CDMA profits. Does make the deal pretty cheap even if you have to pay a bunch of future severance packages.
    - …

    Possible
    - Access to technology that at very least has impressed some customers and maybe required to get into VzW. The trick here is the ability and desire to integrate.
    - Access to some decent engineers. Again requires ability and desire to integrate. You seem more negative about this (than I am). It certainly is predicated on NSN being successful in LTE in general and (likely) NA specifically and on the formerly Nortel bits adding value.
    - …

  • freqmgr

    Remember that in February that Richard Lowe said that Nortel did not have a LTE strategy..that has not changed. Most of the high end folks (engieneering) have left or been cut. Why buy the IPT when you can simply hire the person who developed it?

  • freqmgr

    Part 2….Nortel failed dismally to provide the promised support for CoE's in Africa….why would this ben any different? That time Nortel wasn't bankrupt…. simply did not understanding the marketing

  • freqmgr

    Excuse me! Why do you think that NSN will provide severance to the Nortel former employees that cross over? At the best the “clock” will restart with the “hire” dates and staff will be laid off again without severance. Why would NSN support Nortel's severance debt load and underfunded retirement plans?

  • borissss

    yes you are right.But after some years canada will have 2000 more unemployed people.If a foreign company will make money from Canada,they should add some value to the country.

  • NTblinker

    No. now they are preparing themselves to fight with NSN to buy the CDMA. later if they succeed it, then they will need to keep the coe there. And also they are low costers and if they win the auction they are vert eager to work with low cost regions.

  • CS1000

    10 dollars per month
    are you out of your mind? dude

  • Nortel watcher

    freqmgr/NTblinker,

    The way darthbane puts it, it seems CALA has been unaffected by CH11 which surprises me very much as others like NortelSouth have stated the contrary.

    Can one of you confirm what the layoff numbers have been on CALA since NT filed CH11 in January?

  • borissss

    :) it should be 1000.Of course it is the salary of recently graduated engineer.I think it is 1/6 of US standards.

  • freqmgr

    If they keep CDMA R&D it seems more likely that would be in the US. The biggest Canadian users have already announced that they are changing/evolving their networks away from CDMA.

  • scalppeeler

    You have not been reading press releases or listening to what Nortel employees that are being transferred already know.
    Yes they will keep their seniority.
    If you have 10 years at Nortel, you start with 10 years at NSN.
    And yes, if you are laid off after the transfer you would get the same severance current laid off NSN people get it.
    It really is that simple.
    This has already been communicated.

  • zeroman

    it is 10/hour

  • rfc1149

    I am not aware of of any strategy Nortel has had in any major part of the business in the last 10 years. (Where putting a small bet on every number on the roulette wheel is not a strategy.) :(

    And as Lowe's job is the long term evolution of his business, it certainly is 'interesting' having him admit to being utterly incompetent.

    What this does means though is that the best/only hope for the continuation of Nortel's technology is as part of someone else's solution (such as NSN's). And this is exactly what the Garys, BB, Verizon etc have been telling Nortel for years now.

    NSN has of course bought the IPR. That said, recreating IPR with the people (assuming no patent encumberence) while cheaper than originally creating it, is still expensive. Conversely having the IPR (software, hardware schematics etc) without the people is only useful if the design is mature (part of the reason for Nortel outsourcing 'strategy' being such a cock-up).

    I do though certainly agree that Nortel has lost a lot of good people, both by laying them off and them leaving. Its been pretty easy to poach Nortel for a long time now.

  • freqmgr

    Richard said that there was no LTE strategy during a GIS. It was the same time he said Nortel could not compete in China or India. That statement fits with ELT memo saying Nortel “is too small”.

  • scalppeeler

    freqmgr and his comments really are out of touch and reek of sour grapes.

  • scalppeeler

    Canada lets in far too many immigrants who won't work, can't learn and are just here for the free asylum seeking, refugee handouts, welfare payments and desire to make large families so the liberals
    get lots of votes. That is basically what Canada has turned into. Even fifty years ago if you came here, you worked, and you worked hard to earn and deserve a place in your adopted country Canada.
    Ask immigrants who came during that time. They sweated blood for Canada. You were lucky, fortunate and grateful if you were let in and you appreciated it with all your heart giving back to your country and not demanding changes to culture and traditions. Trudeaus Charter ruined all that. Canada needs to change its immigration system back to how it was fifty years ago with smaller quotas with much more pre-requisites, and more importantly institute new laws so people can't take advantage of the system, but instead work hard and earn their place in canada.
    It really is that easy.

  • scalppeeler

    What is it like working tech in mexico.
    Work, break, siesta, nap, work, break, nap, tequila sunrise?

  • rfc1149

    I don't believe size is the issue with Nortel's ability to compete in those markets. It was a choice.

    Nortel's business strategy (for good or ill) is to be Verizon's alternate supplier, period.

    To make Verizon not unhappy requires big, complex, expensive products and solutions (built to NA standards) that are not competitive in India, China or Africa (1/2 the world's population and most of the growth in wireless).

    To build products that would be competitive would require focus, a change in mindset (perhaps impossible with Nortel's 'carrier grade' mentality) and given the lack of credibility in the market certainly at best would be a very slow fight.

  • freqmgr

    Not sour grapes at all. Just having had a role in wireless business development…which of course stopped in 2008. I guess you are probably in Richard's cabinet or close to it, right?

  • freqmgr

    Yes, there was a time when I was lectured that for Nortel being the second or third supplier was “good enough”….not to lead the way but to follow the crowd. Seems not to have worked too well, eh?

  • rfc1149

    This has been my biggest frustration with Nortel for a long long time. This 'striving for mediocrity' :(

    I remember being in a situation where a large customer was upset that a critical feature was missing. We could easily have just done it (was a small number of weeks of development), but instead spent a bunch of time working to pare it down to the minimum that would make the customer not happy but not furious.

    I do wonder if this is part of Nortel's Canadian heritage. The desire not to lead, not to be noticed, to stay below the radar, to be number 2. Stereotypically Canadian. :(

  • less

    Its a fairly moot point to debate because of Godwins Law:

    To atone for the crimes of the Third Reich, Article 16/2 of West Germany's Basic Law offers liberal asylum rights to those suffering political persecution.

    Until the 1980s, relatively few refugees took advantage of this provision. But in the second half of the decade, a new class of “jet-age refugees” began to make its way to Europe and especially to West Germany, which accepted more than any other West European country.

    From 1986 to 1989, about 380,000 refugees sought asylum in West Germany. By comparison, in the 1990-92 period, nearly 900,000 people sought refuge in a united Germany.

    Although only about 5 percent of requests for asylum are approved, slow processing and appeals mean that many refugees remain in Germany for years. Because financial aid is also provided for the refugees' living expenses, their presence has become a burden on federal and local government. The resulting social tensions made imperative an amendment to the constitutional provision regarding asylum. After heated debate, in 1993 the Bundestag passed legislation that amended the Basic Law and tightened restrictions on granting asylum.

    “Nazism is regaining foothold in Germany again!!!” complained the lefties and rejected asylum seekers.

    Imagine all and any (illegal) immigrant not only given a monthly government allowance, but also (legally) forbidden to seek/be given employment until their case was heard, which could take more than 7 years.

  • less

    I was still around when scores of DMS switches were being shipped to China Nortel.

    Dumbest Moments in Business 2009…midyear edition

    Following a speech at Peking University on his first trip to China as Treasury Secretary, Tim Geithner was asked to share his thoughts about the safety of Chinese investments in the United States. They are “VERY safe,” he quickly asserted.

    At which point the audience burst out laughing. Apparently, the audience was amused not only by the answer's substance, but by the flat “don't worry your little young heads about it” certainty with which Geithner insisted that China's U.S. debt holdings were A-OK. Because as even a group of Chinese college kids understood, that's just not as clear as the Treasury Secretary insisted it was.

    China are burrish on Amelica, but do wonder they're thinking about all them shared CDMA switches…

    http://money.cnn.com/galleries/2009/fortune/090…

  • How_long

    It fits with what's gone on in other Nortel businesses too. Do Canadaians like to be me-too people? Or is it more a Nortel thing?
    Unwillingness to develop a couple of fairly simple features lost loads of business but those in charge wouldn't listen as not invented in Canada.

  • How_long

    That sounds familiar. UK is not totally unlike that. Labour govt has done us no good, other than build up a huge US-like debt.

  • yes4aapl

    Labour govt has done us no good, other than build up a huge US-like debt.
    —–
    re
    Do you want to play politics here?
    What about conserv_republican_PC governments around the world? (G20) They did not have money for basic needs and now they subsidize own countries to the tune of trillions $$$!!!
    Stop the politics on this board, pls.

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