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''Kunis was stunned. Nortel, a corporation with $11 billion in annual sales (all amounts in U.S. dollars), had dozens of R&D locations around the world. He estimated the inefficient setup cost Nortel about $500 million more than it needed to each year.''
''Nortel was pouring money into areas where it had no hope of becoming a leader.''
''In 2001, nine of Cisco's 11 directors were current or former senior executives at high-tech firms. The 10th was a professor of electrical engineering and the 11th was a partner with a prominent venture capital company. These days Cisco's board reflects the company's broader reach. Six of 11 directors have a rich background in high-tech industry while others are experienced in human resources, banking and management consulting.''
By comparaison, with the exception of Red Wilson, the former CEO of Bell Canada Enterprises, none of Nortel's BOD were very knowledgeable about the telecommunications equipment industry.
During the past decade -- even as the company's position was weakening -- Nortel's five best-paid executives collectively took home $400 million in salary.
I rest my case !
Ottawa with the CEO MZ.explaining the justifications of big fat bonuses to the exec
while under Bankruptcy Protection?
Why was a former politician allowed to serve in the BOD? A former Finance
Minister of Canada. You were perfectly right that none of the BOD had
any background knowledge about telecommunications equipment industry.
Today, we learn It was not a matter of differing management styles as Owens claimed than a stark contrast to strategy. A strategy that may have saved Nortel earlier by trading CDMA and UMTS (which they got $300M from Alcatel) to Noika for $2B while reducing R&D waste by $500M a year.
What not for the faint of hearts canceled Oribtor and Neptune? Two areas that could have kept Nortel at the forefront years ahead of their time.
To top it off, Gary Daichendt had to come forward to dismiss Nortel rumor that he was insane, surprised no one from Nortel didn't dismiss it earlier let alone at all.
Owens seemed surprised at his own abrupt departure for a green CEO who wound up defrauding his past employer from day one while joining a company struggling to regain credibility.
In retrospect the comedy of errors that followed was like the perfect storm of Murphy's Law on steroids.
The culture stunk after the largest fraud in Canada they maintained than distanced themselves from by ultimatums and contradictions refusing to negotiate pay practices and promoting pals, it was endless to the end where they paid bonuses switched options and cut severances. Even a board members law firm defended Dunn with their reluctance to chase past officers even after repeated requests. The OSC fined them nothing and they went on to print billions more. What a joke.
Aside from the legacy inefficiencies from R&D, to accounting, to reinventing the wheel for every new project that building on past templates as Cisco had done, they remained committed to prioritizing exorbitant pay practices and rewarding refinancing than innovation or earnings. They even paid for losing money revenues while playing musical chairs with product groups making progress impossible to decifer. Notell was untransparent with endless Flextronics amendments.
By the time all was said and done, their demise was inevitable by doing all the wrong things, all of the time for a company this size betting on a handful of merging giant customers. Nor one consumer product unlike everyone else, no vision but a follower in chasing the same revenue stream. Nothing but hype from bright and eager people who were keystone clowns in telecom regardless of their good intentions.
Worse of all, so little commentary indicates, is that they had so little hope after the largest fraud in Canada and no hope at all after this accompanied even further revisions they downplayed.
The Gary's may have been one salvation, sure, retrospect is easy. But Gary was a Christian and Nortel a slandering contradicting fraud. How could integrity lead a evil empire or fit in with such a culture of pay happy deceit with so many still there.
What ever open markets and regulatory authorities extended Nortel the benefit of doubt, safe harbor, and so many profoundly astounding liberties must also bear as much shame as the timely resigned dream team who denied the obvious red flags.
Outrageously disgusting in my view. Profoundly astounding and to be seen to be believed.
=)
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re
Yet again it shows how clueless and dishonest BoD members were.
They chose Owens and Currie and let go twins from CSCO.
but just few months later they let go /fired/ Owens anyway and lied and misinformed public about the reasons.
So what was the reason Owens quit? was fired/ retired
Owens stated many times that he would never retire....too young to retire.... and all that BS.
Why BoD members of Nortel corp were never charged?
BoD mismanaged the corp. causing shareholders to lose all the investment and the corp to be dismantled in pieces; thousands of jobs lost, lost pensions, severance and other benefits which is a big fraud on its own.
Nortel name will always be associated with the biggest frauds ever.
Do public has the right to ask questions about that?
I don't see media digging into that....
In case of F Dunn there was publication ban imposed, wasn't there?
anyone knows about the ban? please share
and I am just angry of media choosing to publish things whenever they what to and whatever they want to....
Why NPost did not investigate Nortel, CSCO twins dismissal and the reasons when it happened?
NT =$300 Bill fraud
Madoff =$50 bill
Enron = $11 bill
(Enron's stock price, which hit a high of US$90 per share in mid-2000, caused shareholders to lose nearly $11 billion when it plummeted to less than a $1 by the end of November 2001.)
Oh look guys
Enron was only $11 bill fraud and shareholders are still getting compensations for that, including from big banks who knew Enron scams.
and one more thing
In 2000 I laughed at those who stated that NT with $300 bill in value was undervalued and they bought more shares
In 2004 when the reported numbers showed signs of optimistic recovery I decided that NT at $6 was undervalued / $25 bill market cap/
The reported numbers were false as the books were cooked for a reason.
Ask F Dunn why he did it?
and
I googled F Dunn publication ban
http://www.canada.com/windsorstar/story.html?id...
The three were charged and released on bail. Dunn posted bail of $250,000, while Beatty and Gollogly each posted $100,000. They are scheduled to appear in court next on Aug. 18. A publication ban was issued at the request of the defense lawyers.
I've never done the business school thing. Does this sort of thing work?
doing a cisco at nortel would have been disaster likely earlier. there were a few gem products but key pieces were missing to avoid a swatting by cisco. they should have focused the company back to becoming a carrier leader which was what the culture was about. thats what Owens, the Gary's and Z never understood.