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Nortel's Year

It's been a year now since Nortel Networks Ltd. filed for bankruptcy protection and restructuring. (See Nortel Files for Bankruptcy Protection.) And while the process seemed slow at times, it's been mercifully quick compared with the erosion, corruption, and gloom of the last nine years.

The Metro Ethernet Networks, wireless, and carrier voice businesses have buyers or potential buyers. (See Ericsson Delivers Knockout Blow to NSN, Ciena Beats NSN to Buy Nortel's MEN, and Genband Bids $282M for Nortel's VoIP Unit.) The former Alteon has come back to life at the hands of Radware Ltd. (Nasdaq: RDWR). (See Radware's New Superhero.)

The major pieces left are the patent hoard, which you'd have to think could fetch a sizeable sum; the LG-Ericsson Co. Ltd. stake, which was offered up but didn't seem to attract anyone; and some older mobile packet core assets. (See Nortel: What's Left on the Shelf?, Nortel Offers Up Its LG-Nortel Stake, and Nortel's Next Auction: The Packet Core.)

The real story ended a year ago, though. When the restructuring got announced, we at Light Reading realized Nortel was done for. Executives said they intended to rebuild Nortel out of this process, and we gave the statement fair exposure. It's the second sentence of last year's report, The Decline & Fall of Nortel Networks. But it just wasn't going to happen.

That report's title was chosen deliberately. Even if Nortel somehow reemerged, it was never going to be the same Nortel. At best, it would be a new company driven by one or two major product lines, not the Pride of Canada. It would be a fractional Ciena Corp. (NYSE: CIEN). The rest would be scattered to the winds. (Didn't Nortel once use "Come Together" as its theme song?)

It's certainly been frustrating for those close to Nortel. Mark Evans, who's kept track of the decline and fall via his "All About Nortel" blog, had a Happy Anniversary posting yesterday that brings up a few exasperated questions about the past year: Why the fire-sale prices for the assets auctioned off? What changed Mike Zafirovski's mind about rebuilding Nortel?

(Some of the answers might be pretty simple, actually: That's what happens when you declare bankruptcy, and he finally admitted the truth in public.)

And yet, this Globe & Mail piece from earlier in the week practically screams relief that Nortel got as much as it did out of the auctions. Shareholders won't see a dime of the proceeds, of course.

During the whole process, the word that kept coming up in interviews was "sad," and usually in very short sentences. "So sad."

There's a sense of loss here, a recognition that an era has ended. It's a milestone for Canada, but it's also a reminder of how corporate life has changed in the past few decades. Big companies don't nurture. Sure, Google (Nasdaq: GOOG) has trampolines and gourmet cafeterias. (Do they offer sabbaticals yet?) But pensions and lifetime healthcare, or even the long-ago HP Inc. (NYSE: HPQ) policy of no layoffs, are relics.

So if Nortel's former (and current) employees are feeling discarded in this whole mess, it's partly because employees have become a disposable commodity. They're a cost center. If a public company could get away with having no employees, only shareholders, it would.

The changes may well be for the better; a pension fund is a burden that doesn't exactly get lighter over time. But consider this: Not every longtime employee at Nortel was pension-fattened deadweight. Some good people gave blood to this company, not just because it was their job, but because of a sense of mission. Being a part of Nortel was a source of pride. Do you feel that way about the company you work for now?

— Craig Matsumoto, West Coast Editor, Light Reading

booksforabuck 12/5/2012 | 4:44:45 PM
re: Nortel's Year

I had the good fortune to spend a decade at Nortel during the 1980s and early 1990s when it seemed like they would conquer the world. Very exciting and an incredibly strong group of middle managers. Even in the early 90s, however, it was easy to see the changes, the focus on making the quarters rather than on delivering long-term value.


Still, it's sad to see Nortel go away. As I wait to see what the pension benefit guarantee corporation is able to give me out of the small pension I earned, I agree that Nortel really was once a special place.

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