In a time when we are all too familiar with the word ‘recession’, Nortel faces bankruptcy, which is a direct reflection of the industry it is competing in. The consumer wants everything better, faster and cheaper. Additionally, this market is changing by the minute; one bad decision can devastate a reputation which is then reflected in the stock market. This was certainly the case with Nortel; at its peak in mid 2000, the stock was valued at more than $1100 per share as compared to 15 cents Canadian on the Toronto Stock Exchange on the day of the bankruptcy announcement.
Impressively, Nortel remains one of the countries largest employers, and a quick look at their web site will confirm that this company is staying connected with progressively new and competitive technology. There is great potential here. By the way, the site also offers a look at its restructuring plans.
The fate of the company seems to lie in the hands of the current CEO, Mike Zafirovski, who has admiringly taken over the monstrous task of saving the Nortel name since 2005. He does not see bankruptcy as the end but a new beginning and is quoted as saying "So we looked at how do we redirect R&D spending”. In hockey terms, he "wanted to go to where the puck [was being hit] rather than where the person is.” Thankfully he is not a coach in the NHL or he would already have his walking papers in hand.
From all I have read, I kinda like Mike. To begin with, his goals are to be more focused and financially sound which I believe is the key. He is committed to regaining shareholders' confidence. When looking at Nortel history, it would appear they got big fast (during the boom of the late 1990’s, Nortel had over 90 000 employees), and they were quite diversified. After the down hill slide began, the company went through a controversial process of selling off some of its technologies in order to focus on others; the complaint was it choose the wrong technologies to sell and the wrong areas to focus on. However, what those squeaky wheels neglect to highlight is the fact that Nortel is committed to quality in the products it does produce; a value I find commendable.
I am thinking of giving him a call right now on my Nortel made phone just to let him know that I am behind him all the way. I’ll let him know that I am hopeful for that miracle stock market jump that will save the many who invested their savings in 2000. I am glad the corporate jet has been grounded as I am sure the money saved here is going to go to the deserving pensioners and I am looking forward to the face of our ‘new Nortel’.
I am on hold…