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Nortel Names Zafirovski New CEO

Mike Zafirovski, 51, is to be the new president and CEO of Nortel Networks Ltd. (NYSE/Toronto: NT), replacing 65-year-old Bill Owens on November 15.

Zafirovski's name has been linked with the position for nearly a year, becoming a chief contender after leaving Motorola Inc. (NYSE: MOT), where he was chief operating officer. (See Nortel's CEO: Next to Go? and Moto COO Quits.)

In a prepared statement, Nortel's chairman Harry J. Pearce said Zafirovski is "the right leader to build on the important work of Bill Owens -- and take Nortel to the next level."

Having endured a damaging accounting scandal as it tried to cope with the telecom downturn, Nortel is now trying to restructure itself to attack growth markets like the large enterprise sector. (See Nortel Reorganizes Again , Enterprises: More Fiber in the Diet? , and Nortel's Pretty Penny.)

The news sent Nortel's share price up by 5 cents, nearly 2 percent, to $3.30 in pre-market trading.

In Nortel's prepared statement, Zafirovski stated: "I've had the privilege, through my career of working for organizations whose success was based on understanding and leveraging tremendous internal brainpower and human capital. And that's why I'm so excited about Nortel. I see those same characteristics at play. They're the foundation of Nortel's tradition of leadership and innovation, its global presence and its iconic status for technical excellence...

"Candidly, there are very few companies that combine Nortel's rich legacy of innovative leadership and customer base with its enviable position in the world's most important and fastest growing markets. I'm thrilled to have the opportunity to work with the global and dynamic team of men and women at Nortel."

He added that Owens, who was widely regarded as a stop-gap leader when he replaced disgraced CEO Frank Dunn in April 2004, "is leaving a company uniquely positioned for the future that can capitalize on vital opportunities around the world. His dedication and results are both evident as well as significant, and I thank him for his support and contributions."

Despite the positive words, though, Zafirovski will know he has a number of key areas to address, as some recent admissions have shown. (See Nortel CEO: We Blew It on DSL and Nortel Suffers China 3G Setback.)

— Ray Le Maistre, International News Editor, Light Reading

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digits 12/5/2012 | 2:57:15 AM
re: Nortel Names Zafirovski New CEO Will a change of CEO help Nortel? Is the former Motorola man the right person for the job?
It would be interesting to hear what skills people think the new Nortel CEO will need to get the company back on track.
Balet 12/5/2012 | 2:57:14 AM
re: Nortel Names Zafirovski New CEO Great points, Krypton_Blue.

Unfortunately, most of CEOs fly so high in the sky that they don't have eyes to look at the right direction.

Nortel has become a joke of failed M&As. Nobody takes real responsibility or is accountable for wrong or stupid doing.
Krypton_Blue 12/5/2012 | 2:57:14 AM
re: Nortel Names Zafirovski New CEO Well Ray,

It goes somewhat like this, he'll have his first general presentation in front of 3 or 4 thousand talented people in the largest Nortel R&D center ...that being Ottawa. There he will deliver, as all others have done before him, a really good ra-ra speech with a promise to do what's right and build the company back up to its past glory ...sound familiar.

Unfortunately, the high ranking BullSh_ _ ers who have yet to be fired will give him all kinds of wonderful advice which will blind him of taking immediate and correct decisions to attack Nortel's lingering cancer right off the bat.

My advice to Mr. Zafirovski, don't trust anyone at the top ...including the board as they were part of the problem to begin with ...still some cleaning up to be done there as well. Go on your own for walks in the rank & file within the R&D labs and ask questions ...lots of them. Like, - who are the person(s) (former or presently still in the company) you feel has shown and demostrated courage and leadership in this company? - Who has stood up for what is right? - Whom in your view, amongst present management, is not fit to lead in this company? Ask the hard questions to the board like ...why the heck would you hire a new CTO & tech sidekick only to fire him 4 months down the road? ...obviously someone didn't do their homework! After spending $500 million or so acquiring that services company, where the heck are we with our return on investment? ...did this create more cash? more leads? Who the hell keeps selling our equipment and solutions at a loss in India? Show me all the R&D projects on the "GO" and then show me the ones which will actually make money... etc, etc, etc...

Do your homework Mr. Zafirovski with help from people you are sure aren't in it for themselves, their ego or the cash. Look at past presentations and speeches from the present leaders to see where they stack up with their "quotes". DIG deep and wide until you scrape the bottom and build it up from there ...otherwise you will end up regretting taking on this job.
optical_man 12/5/2012 | 2:57:13 AM
re: Nortel Names Zafirovski New CEO Krypton_Blue says:
"My advice to Mr. Zafirovski, don't trust anyone at the top ...including the board as they were part of the problem to begin with ...still some cleaning up to be done there as well. Go on your own for walks in the rank & file within the R&D labs and ask questions ...lots of them"

Huh? What planet do you live on?
Why in God's name would the new CEO want to talk with any of the workers?
Do you think the BOD hired a commie hippie?
I'm sure in the BOD interview, the new CEO stood there and said "I'm going to be ONE with the People! They WILL have a voice!"
And then the BOD hired him. Yeah, OK, right. Sure.
NO they hired one of their own, as they were supposed to.
Why would anyone give up the Country Club to go see how things are going in "Worker's Village".

Come on Krypton, think.
stephencooke 12/5/2012 | 2:57:12 AM
re: Nortel Names Zafirovski New CEO HI,

I just listened to the webcast of Nortel's CEO press conference. I found it quite interesting. I have to say that Bill Owen seems like a true class act. He could have made all sorts of appointments to senior positions within the company to leave his mark but he took the high road and will let Mike Zafirovski build his own management team.

Bill Owen did a wonderful job in terrible circumstances and has now passed the torch on to a younger 'visionary'. He was absolutely dead on in the press conference when he said that Nortel has come back to a solid footing and now is the time for a new leader to take the company forward. Basically, he did his job but the next phase of growth is for someone else.

I hope that Nortel can move forward under Mike Zafirovski. It is time for some good news to come from Nortel.

Steve.

P.S. Ocassionally top leaders have walked through the labs at Nortel. I had George Smythe come, alone and unannounced, talk with me in the TransportNode lab once while he was President of BNR.
dljvjbsl 12/5/2012 | 2:57:12 AM
re: Nortel Names Zafirovski New CEO I am surprised that none of the accounts that I have seen inidcate Owens' view on this. If the move was planned, one would ahve expected that the announcment would have been made by Owens to welcome his successor.

What does this move indicate for the future of the strategies being followed by Owens. Does this indicate a new strategic direction or the hiring of someone with a better recoered on execution.
dodo 12/5/2012 | 2:57:11 AM
re: Nortel Names Zafirovski New CEO Good points KB
BUT....

It ain't going to happen... Too bad the institutional investors who hold the most shares went along with the BOD.

Thes responsible actors are the members of the BOD and the corporate officers and I doubt the new guy will really have the gut to clean house because he will be tempted to depend on the BSers to define the strategic vision of the corporation (everyone thought that Owens would do that and yet nothing tangible has been accomplished apart for the accounting clean-up) though he has a good grasp of the wireless industry.

Let's wait for the next musical chair event to happen in November or December. We won't be surprise also if another re-org does not occur after the FY 2005 results or the q'1-2006 results.
whyiswhy 12/5/2012 | 2:57:11 AM
re: Nortel Names Zafirovski New CEO Would it be fair to characterize Nortel as a lifestyle company? Comfort for those employed or on the BOD seems to be the number one priority. Yawn.
Machavelli 12/5/2012 | 2:57:09 AM
re: Nortel Names Zafirovski New CEO This Zafirovski character, at least, has some redeeming qualities.

1) He actually worked in the Telecom industry (unlike Owens).

2) He was not promoted internally. I just hope he has the courage to really clean house at the executive level (unlike Owens.)

3) He comes from a company (Motorola) that normally doesn't engage in useless and foolish acquisitions like Nortel does. Every acquisition Nortel was involved in not only did not create any synergy, but destroyed value both in Nortel and the acquired companies.

I wish him well, but Nortel was relegated to irrelevance in the Telecom industry long ago. Just look at a recent industires statistics.

2004: Nortel has 5% of the entreprise market
2004: Nortel has 9% of the wireless market
2004: Nortel has 15% of the optical market

"M"
konafella 12/5/2012 | 2:57:09 AM
re: Nortel Names Zafirovski New CEO Somehow, comparing the BNR of old to the current-era Nortel (even in jest) seems to be terrible injustice to BNR. In my mind, BNR was a well run organization with solid tech skills/vision and tremendous execution. They seemed to be a very ethical and very honest corporation. Although I suppose their customer base was made up nearly 100% of monopolies themselves, so it was a different era indeed.

Yes, (sniff) I foldly remember the old OC48 TransportNode myself. Those were the days :)

KF
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