No Review for You, Nortel

By Mark Evans | Published: August 19, 2009

The Globe & Mail has an interesting story on how Canada isn’t likely to stop the sale of Nortel’s CDMA business to Ericsson because the book value of the assets involved falls below a threshold that would trigger a review.

Although the deal is worth $1.13-billion, Nortel values the assets at $149-million, which is less than half the $312-million benchmark that would cause Investment Canada to look at the deal.

Of course, it doesn’t make sense anyway to review or stop the deal because it involves a business dying a slow death. Although still profitable, CDMA sales are declining as GSM and 4G technology become increasingly popular.

In hindsight, Nortel should have sold the business a few years ago when it could have fetched a higher price. Of course, Nortel should have also sold the enterprise business a few years ago.


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  • mtvessel

    I find the comment that Nortel should have sold the entrpise business puzzling. This is the business that Cisco has just entered to great success. Rim is making a fortune with its enterprise-oriented telpehones. Apple and Palm are trying to market their phones in the same way.

    Just what business would Nortel be in if it did not have enterprise services – wireless – no, networking – no

  • zeroman

    it was mainly a lack of vision of where to take Nortel. and then a complete lack of execution. sure some units could have been sold off because the company was lagging in wireless and enterprise with major competitors.

    they could have sold enterprise and gone to their core which is carriers. be it wireless or fiber. Nortel also got out of critical businesses it had to play in so it always ended up having to partner with someone for these critical pieces.

    Z wanted to compete in Enterprise. Sure but it was a space dominated by companies in that area for years. If they had been smart about #2 Bay to explout the market years ago, then yes. Nortel never understood enterprise. It still does not.

    just re-emphasizes the lack of vision of where to take the company by defining what it should be for its customer.

  • stillNT

    Zafirovksi is jealous; RIM is successful while he brought Nortel to bankruptcy

  • PM_Guy

    I think Mark is referring to before Nortel went into bankruptcy. There may have been enough money to pay off creditors and pay employee serverances.

    Clearly Nortel has been too sick for too many years to recover and still exist as a company. The Board and Management were too incompetent or arrogant to realize it.

  • PM_Guy

    Ridiel had stated this fact during his testimony on parliament hill. The conservative government is using this for political cover not to have to do a review and get entangled in to this mess.

    It's a no win situation for them to get involved as they would then need to pump in money into Nortel or find a Canadian company like RIM to take over the business. This is the easy way out for them.

    The Gov't made their decision last fall not to support Nortel before they went into bankruptcy. They new the consequences then and were willing to support the NSN deal before RIM popped up with the Canadian Flag.

    This is not a suprise.

  • exnt_x_2

    Think about what it must be like living his life now, though. I don't think there is anything malicious about this guy, just character traits that make him less desirable to be around.

    But think back to those hard times each of us have had to go through in life, breakups, divorce, incarceration; each morning we wake up new and the oppression we carry around with us gone. But that lasts only a few seconds and then we remember, and there's still a day to gr through again anew.

    This board shows a distinct lack of compassion and depth. Which is interesting, because it's also something I saw in my days at Nortel back when. We all get what we deserve and deserve what we get. Quit whining.

  • exnt_x_2

    Sort of like Chretien steamed us around the Iraq debacle. Too bad we didn't have the same sense for Afghanistan.

  • less

    There may have been enough money to pay off creditors and pay employee severances – but – what to do with trusty bitch-slapping sidekick, Joeliekins?

    I do believe that in some folk's minds that the idea choosing between his loyalty and the livelihoods of 1000s was never much of an option.

  • GoProto

    General Motors Co. on Tuesday announced that it is boosting production by 60,000 vehicles in the third and fourth quarters as sales rise due to the Cash for Clunkers incentives and a recovery in the U.S. market. About 1,350 laid-off workers will be recalled, while 10,000 more will get a shot at overtime pay. The major U.S. and Canadian factories affected by the increases:

    _ Ingersoll, Ontario: Add third shift at assembly plant that makes Chevrolet Equinox and GMC Terrain crossover vehicles.
    _ Lordstown, Ohio: Add second shift at assembly and stamping plants that make Chevrolet Cobalt small car. Add two production days this month to schedule.
    ————————————————–

    While this is good news for GM and their employees, it's news like this that makes it even tougher to bear that NT received Zero help from the gov't, although we all know why – lack of a viable plan being submitted by a clueless CEO and amoeba-like BoD. No re-structuring plan = Zero chance , Zero hope

  • less

    “Thanks for the pep talk, but from now on, just send money.”

  • zeroman

    aw! how old are you? 5 mentally. nothing malicious abot this guy. I almost fell off my chair laughing.

  • less

    The govt musta read “Computerworld Security” from April 21, 09, too and realized

    RIM sucks.

    BlackBerry Tips: Delete Carrier Crapware, Icons
    Every so often, wireless carriers take it upon themselves to push out their own branded, or at least sanctioned, applications and services to BlackBerry users in the form of “service book” updates–regardless of whether or not said users actually want them.

    And Nokia is dangerous to homeland security

    Nokia: We don't know why criminals want our old phones
    Hackers have been offering up to $32,413 in underground forums for Nokia 1100 phones made in the company's former factory in Bochum, Germany. The phone can allegedly be hacked so as to facilitate illegal online banking transfers,

    But Ericsson's clean

    Ericsson profit declines, plans to cut 5,000 jobs
    Swedish telecom equipment vendor Ericsson saw declining profits for its fourth quarter and will lay off 5,000 employees in a continuing effort to cut costs, the company said today.

    ..but that was January 21, 09, so…

  • exnt_x_2

    So you think he's evil?

    Read the posts on this board. Very few people here are any different in hear from Mike. He just got to the head of the line and you didn't, that's what's pissed you off.

    You want to point fingers, go find a mirror.

  • exnt_x_2

    So a government prints up a pile of money and hands it out to industry and that's a recovery?

    Dude, you need to visit Austria sometime.

  • GoProto

    No, that's not a “recovery” and that's not what I said. My point was that GM was given a chance to recover largely due to the help they got, which they got because they were able to show succint and viable plans for a recovery if they were able to get help in the interim, and now, according to this article they are beginning to hire back some of the people that were laid off.
    Are you saying that NT would not relish being in that situation??
    BTW, thanks, I have been to Austria while visiting my family whose roots go back to Budapest and Vienna.

  • Another_Nortel_Watcher

    “In hindsight, Nortel should have sold the business a few years ago when it could have fetched a higher price. Of course, Nortel should have also sold the enterprise business a few years ago.”

    Disagree. In hindsight, Nortel should have hired people who knew what they were doing to run the company and grow the portfolios, not sell them.

  • NTInfidel

    Both.

    Nortel mgmt should have picked a few business units to concentrate on and sell the rest when they were valuable. Then they would have less debt/more cash to concentrate on winning those businesses.

    It was mistake to try to stay in every business and give mediocre efforts to all of them.

  • forgive

    Nortel may have lots of temporary positions opening very soon.

  • zeroman

    A lot of people are different from Z. Some of us are at the head of the line. The difference with us is we also look back, wave and speak with everyone. We are not arrogant idiots just holding their head up high, thinking they were GE's gift to save the world.

    I went to a mirror and saw you in the background. Seemed to look like Z too.

  • zeroman

    if Z had a plan he could have got it. we never saw a restructuring plan in 3 years nor did we see one after chapter 11. asking for amounts of money that changed every time they spoke to government does not paint a very good impression of a business who knows what they are doing. 7 years and they still cannot get the books right.

    no business plan. no money. if you think Nortel derved a handout with no plan,go try and get $1000 from your local bank for a business venture.

    If the government had handed out money and it went towards bonuses, bad business practices and losses, you as a taxpayer would have complained about giving huge bailout money.

  • scalppeeler

    Your stupidity and gullibility amuses me. GM is boosting production because the government gave them billions upon billions with a bailout. Not only are the assemblers working there set for life but now even more will be hired and set for life. They were given so much money they had no idea what to do with it all. First thing to do as anybody knows in the government or military is to use up all you were given for your quarter or week, or whatever to ensure you get the same amount next time. Who cares if you waste, hide or throw it away. Always make sure you use up what you were given to justify more even if you didn't need it or shouldn't have been given it in the first place. This lesson applies one hundred percent to the assembler. They have money to build many more vehicles to basically sit on lots. More money to hire car salesman who will be brought in because the lots will be full. But the cars won't sell. Sales are not rising and cash for clunkers is dying. Only reason there may have been some good news in the sales department is again becuase vehiclees are basically being given away. Again all to satisfy and falsely justify the billions in bailout that never should have happened. The government at the federal, provincial and municipal levels all failed Nortel, even though Mike, senior execs and most of all the Board of Directors should have been thrown in jail. Just wait and see what happens to the auto industry, particularly in ontario. The last laugh will be on McGuinty and Harper.

  • exnt_x_2

    Well, as I said, compassion was a quality distinctly missing with everything about Nortel. You make that clear enough.

  • exnt_x_2

    Dude. It's fake. A fraud. You can make a brick fly if you strap on a large enough engine.

    And I was referring to a school of economics in Austria. People seem to enjoy posting things here they know nothing about. Reminds me of a certain company.

  • exnt_x_2

    Nortel failed Nortel. Government has nothing to do with this nor should it ever.

  • scalppeeler

    BS.
    Gov't has everything to do with it.
    Canada and specifically McGinnys ontario want ditch diggers, painters, grass cutters, construction workers and auto assemblers. That's where the money is targeted and the innovation flourishes. Heavy dose of sarcasm
    The only alternative to this and the other preferred position you want to be in if living in Ontario is of course if you are on the welfare or refugee payroll.
    That's McGinnys ontario.

  • Anonymous

    compassion that he is an idiot who can only blow hot air.

    conviction that he milked Nortel for what it was worth.

    comdemnation that he threw in the towel after all that pep talk of turning around the company.

    conmpulsion to say he is a loser CEO because he could have stayed on for $1 and seen all the unit sales through, negotiating top dollar. If he was feeling that guilty doing nothing, he could have taken a dollar easy.

    therefore,

    convulsion that all these b$tards are there for the mney.

  • less

    Well lets see –

    Compassion is a human emotion prompted by the pain of others. More vigorous than empathy, the feeling commonly gives rise to an active desire to alleviate another's suffering.

    So for me to feel compassion toward Mike I'd first need to know what the source of his pain is. His own lack of compassion? He too modest to speak out?
    I don't recall too many Mandelas or Mother Teresas out there telling the press they hold their heads high over a job well-done.
    “The patient is dead, but my operation was a success''.

  • Another_Nortel_Watcher

    No, that is 'loser think'. 10 years ago Nortel was strong and a leader in all of it's business units. It's all about implementing the right structure run by the right leaders.

  • zeroman

    scalppeeler you sure are a hypocrite and two faced. on other posts you were anti-socialism, anti-immigrant and anti-Canada. You did not want your taxpayer dollars going to help people. Aw! Now you are saying that the Canadian government failed giving bailout money (socialism) to Nortel. Why to save your job?????????? You lying quack.

    if Z had a plan he could have got some government loans. GM and Chrysler both came back with business plans, took steps to reduce their costs and made agreements giving some control.

    Z's egghead ego came in the middle and now its splattered like egg yolk all over Nortel. Nortel management is also not unscathed. They are equally to blame.

    A $10 billion company with no profit ever for the past 7 years bit the dust because of their own arrogance. The dinosaurs never saw it coming. Neither did Nortel. Nor does mr. redneck scalppeeler for that matter.

  • zeroman

    aw!! boo hoo you two faced slimedog. viva la socialism for you but not for the others.

  • zeroman

    this man threw in the towel saying its not worth staying anymore with no need for Nortel to pay him as CEO.

    well if he was that concerned he could have worked for $1 to see the sale of Nortel through.

    Thats what honourable CEOs do. Gutless, moneychasers like Z move onto their next kill right away.

  • scalppeeler

    I am seriously contemplating just that you gutless piece of manure.
    Welcome to McGuineas Ontario and Harpos minority government of Canada. Where politicians are afraid to speak the truth and lay down the law for fear of losing millions of votes thanks to the overinflux of immigrants thanks to years of liberal rule and lax immigration policies.

  • horace_grimswold

    The last time I tried declaring the value of the $11.3g's worth of gold chains swingin' 'round my neck being worth $149, it triggered an automatic review by the Canada Customs officer. He wasn't impressed.

  • exnt_x_2

    Hey, Ontario Works (OW) is great when you need it.

  • zeroman

    I am gutless. You have been seriously thinking about this for so long, yet you are still here. Go to the redneck toilet where you belong and join the rest of the rednecks who live on in the sewage of the 16th century.

    do us all a favour. get out. we can use your weekly EI for someone who really deserves it.

  • biddut

    Why?

  • painful_truth

    Nortel is a great company!!

  • scalppeeler

    So you live in ontario coward?

  • scalppeeler

    Incorrect.
    When Nortel went into bankruptcy protection their debt/deficit far outweighed their assets. BP was something they had to do, as unpopular as it was.
    The shame in it all is the Canadian government at all three levels.
    Where were they for their “fellow canadian” citizens who worked hard, paid taxes all their lives and in some cases are drawing pensions.
    The gov't was not there for this type of canadian.
    The canadian gov't should have been there for the ex employees. Even the americans take care of nortel employees better than canadian politicans and Nortel is a canadian company. Witness the details about pensioners.
    Woe Canadud.

  • forgive

    I learned one bankruptcy company many years ago, at the end of closing door, all upset employees took company asset(laptop, computer, etc) back home!!!! Some sales guys claimed company owed him big chunk of delayed commission etc. At last, creditors had to hire 3rd party workers in office to take care of asset.

  • yes4aapl

    I would exercise an idea that Canadian Gov is killing two birds with one stone if they don't help Rimm by helping Nortel.
    Rimm wanted something from Nortel. Nortel shot them out of the bidding. It's almost impossible for Gov to reverse the actions taken.
    Competition for smart Phones is growing. Rimm will be next Nortel in few years if…
    Do I know what I am talking about?
    Look at my ID which I have been using for the last 6 years.
    I knew Nortel was Doomed with their culture of deception and AAPL was going to the moon with their culture of innovations.
    You can send me a Thank You notes for warring you about RIMM
    example
    The good news for both RIM and Apple is that the overall smartphone market is growing faster than ever. In 2008 a total of 1.19 billion mobile phones were sold worldwide, according to IDC, of which some 155 million were smartphones, or 13%. In 2013, IDC predicts that 20% of the 1.4 billion phones sold will be smartphones, or 280 million.

    The competition, though, is getting increasingly stiff. New entrants like computer manufacturers Acer and (if rumors are true) Dell (DELL, Fortune 500) are rushing into the market. A revitalized Palm (PALM) has taken aim at the iPhone with its Pre, which debuted on the Sprint network in June and will be available on Verizon next year. And Google (GOOG, Fortune 500) is pouring resources into its Android smartphone operating system
    http://money.cnn.com/2009/08/12/technology/blac…

  • yes4aapl

    Nortel is a great company!!
    —
    re
    Correction'
    Nortel used to be a great company!!

  • zeroman

    thats what I posted a few blogs before. Rim in over in a few years. the others have other products. Rim is a single product company. in a few years there will be a smartphone out of China that will kill everyone.

  • zeroman

    just leave crackpot. hitch a ride on cargo boat somewhere. you cant afford a flight.

  • GoProto

    “My point was that GM was given a chance largely due to the help they got, which they got because they were able to show succint and viable plans for a recovery”
    ______________________
    Did my post (excerpt above) not just say what you did?
    That was my point entirely. NT may have been able to get help (as GM did) if only they had submitted a viable plan. I never said they should have gotten help without one.

  • GoProto

    You are the one who told me to go to Austria sometime, with no explanation as to why. I was trying to be ironic referring to why I visited there. I guess the hint of humour was lost on you..I posted what I do now about, which was my trip.
    As far as the fake and fraud, tell that to the people at GM who just got their jobs back. I really don't give a s*it about your “bigger picture” right now as no one really knows what is and is not true in the corporate world or gov't, but a man knows when he is receiving a paycheck to feed his family.

  • GoProto

    BTW, the excerpt I copied was from my later post (below), which was in response to exntx2. However, I did state that in the post you replied to that we all know why there was no help given- no viable plan ever submitted.

  • GoProto

    Thanks for the personal comments, I am quite sure I have been stupid and gullible at some points in my life. It's not my intention, but oh well..
    My comment was about one thing only- People getting their jobs back right now. Period. Paychecks putting food on the table. All your other comments may or may not be viable, but I think people working is the number one factor that may lead to a turnaround in the present economy.

  • less

    What the phones will need is a network capable of delivering UC/cloud-computing and x gigs of bandwidth, so the populace can watch the latest PPV slasher flicks on their dash-mounted HD GPSs at every red light, all handsfree. And all made in China.

    Opting for the deluxe package will allow kids to do the same on their respective wireless playstations. Not to mention per-order fastfood meal to be eaten on the way to soccer practice. Sure they got a Kiddies' McCybercafe so kids can e-mail and IM @ 720p or 1080i resolution.

  • less

    Did he send word, word to yo mutha? :o

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