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Optical/IP

Nortel COO Resigns

Nortel Networks Ltd. (NYSE/Toronto: NT) COO Gary Daichendt has resigned after only three months on the job, the company said in a statement released this morning.

So what happened? In a short, blunt press release, Nortel CEO Bill Owens, who hired Daichendt, basically said the top executives couldn’t work together.

"It has become apparent to Gary and me… that we have divergent management styles and our business views differ,” said Owens in the statement.

Nortel also announced that Gary Kunis, chief technology officer, who joined Nortel following the appointment of Daichendt, will also be leaving the company. Kunis previously worked alongside Daichendt at Cisco Systems Inc. (Nasdaq: CSCO).

The departure of the two top executives throws Nortel’s leadership back into question, just days after Owens spoke at Supercomm, saying things were just dandy.

Owens told a packed auditorium earlier this week in Chicago that “Nortel is doing well -- business is good. We’ve been through a transition.” Clearly that transition hasn’t yet ended.

Daichendt, former executive vice president of worldwide operations at Cisco before retiring in 2000, looked to be in position to eventually take over the CEO spot (see Ex-Cisco Exec Named Nortel COO). Owens had shed some responsibilities when Daichendt came on board.

The departure of of Kunis means Nortel has gone through three CTOs in less than a year. In October 2004, Brian McFadden took over for Greg Mumford. In March, McFadden was replaced by Kunis, becoming chief research officer (see Nortel Changes CTO – Again ).

— R. Scott Raynovich, US Editor, Light Reading
(Ray Le Maistre, International News Editor, contributed to this story)

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Krypton_Blue 12/5/2012 | 3:11:42 AM
re: Nortel COO Resigns Well, here we go again ...what a travesty!!!

The incompetency continues. Unless someone with balls of steel gets in there and fires most of the senior execs in this company, this ship will will vanish just like ENRON.

Come on you all you share holders ...once and for all, get working together and oust these fools at the helm.
Machavelli 12/5/2012 | 3:11:42 AM
re: Nortel COO Resigns A few months ago, I said there might be hope for Nortel when they snagged two top Cisco guys who could infuse quality leadership, some ethics and good management into Nortel.

Now that Daichendt and Kunis have left, Nortel will become history soon. Nortel is quickly losing its battle with the five "C"s.

1) China has commoditized the industry with companies like Huawei and ZTE. There is no way Nortel will make anything but razor thin margins on their businesses.

2) Cellular. Nortel has managed to screw up its leadership position in the wirlese arena. While Lucent has grown 33% in wireless in the last year, Nortel is at the bottom with 3 or 4% growth. The industry average is between these two extremes.

3) Cisco will continue dominating enterprise and VOIP. Nortel had a 15% stake in the market 5 years when the bought Bay Networks, but managed to screw it up (like everything else) and now holds a 7% market share at best.

4) Consolidatation. Now that all the big players are consolidating (SBC + AT&T, Verizon + MCI, Sprint + Nextel, etc.) reduced revenues along with razor thin margins are a certainty.

5) Culture. There was hope a few months ago when Owens, brought in Daichendt and Kunis, but now he will probably appoint some incompetent and corrupt top managemers from within Nortel. It is obvious outsiders have no faith in the company now.

Mach
Krypton_Blue 12/5/2012 | 3:11:40 AM
re: Nortel COO Resigns The 4 "C"s indeed. Perhaps we need to look at the 4 "I"s as well...

> Incompetence GǪthese ineffective & arrogant leaders have ultimately killed the company. Many top-level technical people are leaving or making plans to do so since they can no longer support this type of incompetent leadership GǪthis was the execGs last chance and they screwed it up royally. The employees had hope a few months ago but it has evaporated along with the company's chances for survival.

> Incredibly Stupid Mistakes GǪ(1) not integrating Bay Networks like they should have to enhance their enterprise market share; (2) holding on to Optical dreams with their silly comeback stories for products like the HDX all the while driving the GǣwholeGǥ Division into the ground; (3) not capitalizing on the Wireless industry (4) not cleaning house when they should have GǪwho the hell ever heard of a company with more presidents then divisions to lead GǪby a wide margin!!!; (5) etc, etc, etc GǪto many to list

> Inquiries GǪ(1) from the SEC; (2) from the numerous on-going class-action lawsuits; (3) from its partners; (4) from its creditors; (5) etcGǪ GǪnot looking good for a happy ending here folks.

> Incapable GǪ(1) of making any sound decisions; (2) of retaining the good people and leaders they need to survive; (3) of making the GǣrightGǥ business decisions due to exec cronyism and arrogance; (4) of realistically evaluating a market such as the GǣServices MarketGǥ and how to enter it and who to hire to win; (5) of dealing with incompetent management; (6) of creating lasting & winning partnerships; (7) etcGǪ

And last but not leastGǪ

> Insolvent GǪas this is where itGs all headed folks.

This is indeed sad news for the remaining employees at Nortel GǪas all they constantly see is the same rotten bunch enriching themselves as their expense.

Shareholders GǪRISE UP!!!
laser_lover 12/5/2012 | 3:11:39 AM
re: Nortel COO Resigns I wonder if this indicates there is something major coming down the pipe?

I expect the ex-Cisco guys thought they were signing on to run a company, and probably wouldn't like the idea of playing "Oui-monkey" to bosses in Paris or Beijing.

Could that drive them out after 12 weeks?

LL
OptixCal 12/5/2012 | 3:11:37 AM
re: Nortel COO Resigns Where in the hell did Nortel's management go to school? Harvard Business School or the Harvard Coop? it looks like some of them went the Carnegie Mellon(head) as well. For crying out loud, these guys keep stepping on it's own "member". Get a hint you clowns! SELL...!
DZED 12/5/2012 | 3:11:36 AM
re: Nortel COO Resigns Sad, but they do seem doomed.

If the calibre of management at Nortel is this bad, and it seems it is, then there doesn't seem to be any hope.

PS Give a thought for the Bookham shareholders and employees. They got the dud Nortel execs even Nortel didn't want.
dljvjbsl 12/5/2012 | 3:11:36 AM
re: Nortel COO Resigns Nortel -- another turn on the death spiral

Nortel laid everybody off. Now they are:

NOrtel
NOtechnology
NOproducts
NOexecutives
NOfuture

The spiral just keeps on turning.
freetoair 12/5/2012 | 3:11:35 AM
re: Nortel COO Resigns Nortel has problems, no doubt, and they make spiral to death, but these fools should have never been hired anyway (which does not reflect well on Nortel mgmt / decision making, to say the least). But just becuase they had a Cisco pedigree does not mean they are magic. These guys did not make Cisco, etc. The magic days at Cisco are long, long gone as well.

Nortel should have hired some Cisco sales guys not these tech types. Cisco is not a tech company but a sales & cut-throat business company. Nortel technology, at least perhaps up to recent history has always been much stronger and better than Cisco's. Cisco was early on routing and the market never looked back and they used aggressive, clever business techniques to grow to a gaint - not better technology.
boozoo 12/5/2012 | 3:11:34 AM
re: Nortel COO Resigns Anybody knows why did the 2 Garry leave CSCO in the first place?
laserboy 12/5/2012 | 3:11:34 AM
re: Nortel COO Resigns I just love how you guys (dljvjbsl & Machavelli) keep bashing no matter what Nortel does and continually predict the demise of the company. If you guys were so "bright" you would have shorted Nortel stock long ago and would not be wasting your time with your continuous (yawn) doom and gloom postings. Ever think that having the COO/CTO leave is a good thing for Nortel? Ever think that perhaps it was them that would have destroyed the company with their new ideas? No, that would mean you could not bash Nortel.

Yes, you will bash Nortel no matter what they do. Yes, Nortel is in trouble. Yes, Nortel will survive.
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