John Roth’s Legacy

http://www.reuters.com/article/technologyNews/i...

May 21, 2009
The co-chief executives of BlackBerry maker Research in Motion Ltd said on Thursday they would donate about C$290 million ($253 million) of RIM shares owned by them to two charitable foundations.

Co-CEO Jim Balsillie will make weekly share donations up to C$100 million over 24 months to a charitable foundation he has established.
Balsillie will also donate another C$57 million of shares to the Center for International Governance Innovation (CIGI), an Ontario-based think tank.

Co-CEO Mike Lazaridis will donate about C$190 million over 22 months to his charitable foundation.

There exist a handful of former NT employees who could use as little as $1-2k to make it into the new year. Wheres the love?

Roth was nothing but lucky, he happened to be in the right place at the right time, nothing more. He ultimately sowed the seeds of Nortel's demise by accumulating all of the long term debt resulting from the failed acquisitions he made. When he announced his retirement, I knew then & there that he was simply being a coward. He was going to take his money & run so he didn't have to face the destruction he knew would be coming at some point. I'll never..ever... forget his announcement at the 2000 annual sales conference in Las Vegas that Nortel had bigger market cap than IBM at $200B+ and nobody could/would ever stop us. Nortel was a "bellwether" of the stock markets and all eyes were on us.

He's got his money.... wonder if he sleeps at night.

Roth made some nice moves. Buying Bay #2 to Cisco would have taken the company into a new direction. famous right angle turn saying. Nortel could have done a lot but management just did not get the Bay story. They did not understand what the products were, the competition. so the bureaucrats killed that business.

nobody ever in the life of Nortel could integrate acquisitions well. they should have hired some cisco people to retain the talent for which they paid the big bucks. there were acquisitions that just did not make sense like Clarfiy. extended Nortel too much too quickly.

the boom resulted in a lot of useless people getting promoted who knew squat about the industry, the technology or the competition. Roth could not control all this. I think he had good vision but bad execution killed the company.

Another example is he did away with gating processes and banding for employees as soon as the company broke away from Bell. This should have made the company more agile allowing people to move around the company faster. Instead the way it was done, it had the exact opposite making the company slow and locking up talent (their way of retention) because Bell era management did things the same way, useless HR never got it and all the cronyism just killed off enthusiasm from passionate people.

You only say that because you don't know him. I met Roth and presented to him and I can tell you that he knew his market a hell of a lot better than John Chambers knew his (presented to him too). John Roth took risks and placed big bets because he had to. He led Nortel in era of eat or be eaten. If you weren't making acquisitions (good or bad), the fools at Verizon and AT&T wouldn't view you as a serious player. Table stakes to be in the game were high. John Roth would never have hired Joel Hackney, John Roese, or the other losers that MZ brought in. John Roth would never have allowed a jobsworth like Richard Lowe to lead Nortel's Carrier business.

John Roth had to leave because he was at the helm when the telecom market - and Nortel's top line - cratered. Had he been able to stay on, I have no doubt that Nortel would have turned around quickly.

I'm sure I'll draw a lot of flak for this post but I'm only interested in hearing opinions from others who had direct dealings with Roth. The rest of you are just winers and gossipers.

Like, uh, by that same measure if you've never personally presented to Z, Roese, Lowe and Hackney you don't know them, so....

I'd agree that the market got pretty brutal during Roth's tenure, although it looked more like a veritable fairyland toward the bottom of its food pyramid for a while.
You opine Roth was more or less kicked out, but a wholly different rumor persists saying Roth was very adamant about retiring and on his own terms, so a needy, greedy NT brass wooed him with hefty cash incentive. Roth said, okay, show me the money, took it - and booked, nonetheless.

http://www.kelowna.com/2009/11/08/nortel-networ...

Roth had been determined to retire when he did. He had done every job asked of him during a 30-year career and he'd had enough.
"My retirement date is 2001," Roth had said. When an astonished Wilson pointed out that would make his term one year shorter than typical, Roth emphasized, "That's the way it is."
Whatever the reason, Roth's eagerness to escape the firm should have been a warning sign
When Roth learned that Chandran was too ill to take over as CEO, he was furious. The board pressed Roth to stay on as CEO until they could find a successor to Chandran. He did so, but grudgingly.
When the board convinced Dunn to take the top job, it also persuaded Roth to serve as vice- chairman until Dec. 2002. Roth was rarely seen in the office


A truly better occassion to flip the ultimate bird at a pack of dirty, lazy, self-serving rat jerks and walk away rich doesn't come along that often, but look at the fallout it caused in the end.

NT brass got just smart enough to not beg Mike Z to stay, so he has to sue NT for $12mio. Still, NT's remaining money is being placed in the most deserving hands, according to the ever wise and venerable NT.

Haha - yeah, in reality Roth admonished Canadian firm Nortel "get off its duff" and join the present while threatening staid Canada give him a (tax) break lest he take Nortel elsewhere, namely the US. "We were a slow company and we had to work very hard to become a fast one"

What did he do and how was it perceived?

While Cisco and Lucent pluck away at purchasing smaller voice and data vendors for less than a half billion dollars, Nortel made the big, bold move by acquiring Bay for $9 billion. That's the way John Roth does things.

Piddly Cisco.

12.13.00 SILICON VALLEY - John Roth doesn't look like an Internet entrepreneur. At 57, he's as buttoned-down as a lifetime employee of a telecommunications company--which is what he is.
Over the past couple of years, however, Roth has behaved very much like a new age mogul, turning Northern Telecom--a Clark Kent of a company--into Nortel Networks (nyse: NT - news - people), a Superman of the Internet

Twas, "John Roth, upwardly mogul" so they named Roth a bold visionary; Forbes one of the best CEOs of 2000.

Of course, a few months later John Roth blamed what he called a "disastrous" U.S. market for the company's woes. Quick, what else? A collapse in orders: “In my 30 years, I’ve never seen anything like it”.

As early as 2001 there were widespread fears in Canadian business circles that Nortels declining stock valuation would render it easy prey for a foreign takeover.
So John retired as promised with his pals showering him with money on the way out, cementing the negative trend for his/their successors and the BoD to exploit.

Monday? Old news. It was in the Ottawa Citizen yesterday. Read away.

http://bit.ly/3WYOTl

Whatever happened to accountability?

Roth retired to bucolic Caledon, Ont. with $130-million where he has kept an extremely low profile.

Where would a Richardson employee go with $744,260 thrown at them? I'll bet alcolic Plano. jk

Its ironic how cheap Nortel talk was as it simultaneously cost 'em billions, eh. But I do sometimes wonder if Roth, specifically, didn't indeed feel an occasional tinge of guilt or remorse by accepting those hefty stock bonuses.
I couldn't believe my luck when I came to Nortel in '99, but I also felt an (odd) obligation to always deliver my money's worth. Then I saw management throwing $$$ around/away, and some of my new co-workers were talking about having "outgrown" Nortel and moving on and up to real gigs offering real money. What to do but accept the bonuses like everyone else... and secure a few file cabinets to stash basic goods from the ever-hungry dumpsters. Because, no matter what, them weekly Units had to be reached.

Given the option between $744,260 and a garage full of decent tools in Plano, or $130 mio in a fully-staffed home in Caledon, I'd choose the former.

Roth's era was the years of great expenses. Nortel was hiring like crazy and numerous new facilities were added every year or so. Nortel was spending without
count but then in the midst of 2000 the bubble started to loose steam. John Roth was reassuring telling the troops that instead of growing from 25 to 30 % a year, the growth expected was now more like 20 to 25%. Of course in the same time he was selling like crazy all his options, cashing around 130 millions. In fact Nortel had started a terrible downfall that left Nortel a year later with a 33% decrease in revenues and losses in multiple billions.

We all know what happened after the meltdown when Frank Dunn took over. But don't you thing that Dunn(CFO during the Roth's year) was not also cooking the books back then ?

Sure, Nortel wasted $30B in acquisitions under Roth's watch but lets not forget that Nortel could not have grown made these acquisitions without him. Unlike others since, Roth was an engineer who knew telecom.

The bubble bursting had nothing to do with Roth, he was gone and well distanced from his predecessor's actions who gave rise to the fall of Nortel by fraud. Roth envy has been alive ever since with their exorbitant pay practices.

I don't think Roth had anything negative to do with Nortel, quite the contrary, he earned his bonuses through remarkable performance when he was CEO which is more than I can say for his predecessors.

During a bubble, everybody looks like a genius. Nortel/Roth happened to be better than most at getting financing/debt to be a "playah".

Then he stayed long enough to enjoy the party and exited when the going was good. Brilliant.

I

What gives with all the duplicates?

It would appear bad news also bears repeating.

Aye, one post for us, one for the credtors. And one for the IRS.

''Some analysts and investors say Roth's role in Nortel's meteoric rise was largely coincidental. Roth tersely dismissed that.''

but then he adds :

"We had the product, others didn't," he said.

Yep, back then, Nortel was selling more then $10 billions worth of optical products !
I remember asking one of the managers in place in that euphoria period: ok there is a boom for our products right now but what is the forecast for the next 5 years ? The answer was : I don't have a clue what to expect, what I can say is we just can't cope with the demand today ........... and not long after that was the downfall.
Nearly 10 years later, Nortel is now selling just over $1 billion of optical products.

In terms of the DWDM market share in Canada (given there are only 3 tier 3 operators: Bell, TELUS, Rogers), can anybody tell me the figure of Nortel, Al-Lu and Ciena? I don't think Fujitsu has a big market share here in Canada. Correct me if I am wrong... Thanks

And if we talk about the backbone (SONET+DWDM) plus Metro, then who is the number one in Canada optical market? Does anybody have a rough number of the income of 2008 that Nortel MEN made? 500M USD? Or?

I wouldn't call those players "Tier 3"