Nortel CEO said to be leaving soon
Nortel Networks CEO Mike Zafirovski
(Credit: Nortel Networks)Nortel Networks CEO Mike Zafirovski, who led the company into bankruptcy protection earlier this year and oversaw the sell-off of its wireless assets to Ericsson, will reportedly leave Nortel within weeks, according to a Wall Street Journal report citing "people familiar with the matter."
Nortel representatives did not immediately respond to e-mail seeing confirmation of and comment on the report.
Zafirovski was hired in 2005 to help turn around the company, much like he had done for Motorola's cell phone division. Initially, he had some success building profits from selling wireless gear to U.S. operators. Under his leadership, Nortel invested in new technology, and the company was preparing for the next wave of wireless networks. But then the economy tanked, and phone companies started to pull back on spending, which resulted in a sharp revenue drop for Nortel.
Once a giant in wireless gear, Toronto-based Nortel filed for bankruptcy protection in Canada and the U.S. earlier this year. And just last month, Ericsson cast the $1.13 billion winning bid in an auction for Nortel's wireless assets, picking up its cash cow, it's CDMA and next-generation LTE wireless technologies. That purchase virtually ensured that Nortel would be selling off the rest of its businesses, instead of reorganizing into a smaller company, making Zafirovski's departure someone inevitable.
Reuters is reporting that Nortel representatives on Friday appeared before a Canadian government committee to answer questions about the sale to Ericsson, which was opposed by BlackBerry maker Research In Motion, also of Canada. "It covets Nortel's next-generation LTE--or "long-term evolution"--wireless assets, which are being licensed as part of the Ericsson transaction. It has argued it was effectively prevented from bidding on them by Nortel," Reuters says.
CNET News reporter Marguerite Reardon contributed to this report.
Michelle Meyers is an associate editor who tracks online happenings in media, entertainment, and politics. E-mail Michelle. 
If you research it, you'll find that all that Mike Z did to improve things at Motorola was cost-cutting combined with not stopping the in-progress RAZR program. Nortel needed more than that. Nortel needed visionary leadership at a critical inflection point in the market and Zafirovsky wasn't up to that challenge any more than John Scully was up to a similar challenge at Apple. Zafirovsky doesn't have any depth in the telecom business and nor did he hire people that did. That is how he led Nortel into the abyss.
Through the years Nortel made many fatal mistakes, including:
1. Nortel thought it had a monopoly on telecom equipment, while competition was fiercy eating into its business in the post-deregulation era. What was it doing with 90,000 employees in 2000? Alcatel, Nokia, Ericsson, even Cisco were having a feast at Nortel's expense.
2. Nortel bet big -- really big -- on CDMA, and lost. The world went with GSM and Nortel found itself without customers. This is actually a reflection on the domestic (Canadian) market, where Bell Canada and Telus invested heavily into CDMA along with equipment makers like Nortel (and even RIM to a certain extent).
3. Nortel got blindsided by the Chinese. Standardization towards GSM and 3G technologies meant that Chinese players like Huawei and ZTE were able to break through with cheap telco equipment. They're able to do R&D at a fraction of the cost Nortel was paying for employees in Ottawa. The equipment business suddenly became a "commodity" business, and Nortel was not prepared for the change.
By the time Zafirovski joined Nortel (2005), the game was already long over. The only action that _maybe_ could have prevented Nortel's demise would have been selling all non-core assets then off-shore the rest to China -- something a "Canadian darling" company couldn't possibly do, with the likes of John Manley on its board.
1. In 2000, Nortel was a >$30B company with a strong position in all of Carrier, Enterprise, Wireless, and Long-haul optical. Revenue per employee was competitive and Nortel was taking business away from Alcatel and Ericsson in non-North American markets. Cisco by then owned the Enterprise router space but was at that time trying and failing to make a dent in the VoIP and Optical markets. Nokia wasn't even on the radar yet for the networking business.
2. Nortel bet big on CDMA and won. The national carriers in USA (Vz, Sprint), Canada, South Korea, Australia, and China all built up large CDMA networks. I think it was a missed opportunity to not also play to win in the GSM market but that hardly made it a mistake to bet and win with CDMA. The real blunder on Nortel's part was to only dabble in and then abandon the 3G markets, thereby losing the ability to transition networks from 3G to 4G when it happens. That mistake turned their CDMA portfolio into a dead end.
3. Yes, this is one of the big problems. Nortel's traditional switching and wireless business is being commoditized by the Chinese in market after market. Nortel needed to accept that this was going to happen and find new revenues from emerging opportunities but Zafirovsky and his cadre of obsolete and/or inappropriate business leaders allowed short-sighted decisions to kill off the seeds that had been planted a half dozen years ago.
Nortel needed a Steve Jobs of Telecom at the time when Zafirovsky was hired. Someone with insight and the ability to steer the company through the Chinese commoditization, WiMax/LTE debates, etc. Instead, they ended up with a GE Holding company six sigma zealot with no experience in Nortel's core businesses. And on top of that, he hired badly. The wrong guy at the wrong time. Ultimately the boards fault, but do not paint Zafirovsky as a victim of circumstance.
If they did Nortel would be owned by canadians...RIM
We are canadians LOOK OUT for the spin..
We are looking over for canadian intrests....
Not American intrests
Not German intrests
Not Swedish intrests
Not any other than companies intrest
CDMA and next-generation LTE wireless technologies
A gold mine
The Judge in the case was "Gleefull" because og the deal they got..
This is unbelievable.....We play by the rules and the bad guys CHEET CANADIANS.
JUST UNBELIEVABLE.....
Please Kill the deal
REMEMBER the anthem.....
STAND ON GUARD FOR THEE..
Erickson has lost market share.....
I also strongly believe money has changed hands...behind close doors.....
Why block RIM out....
For instance the PC and Smartphone OS should be a commodity, but MS has monopolized the PC OS game for over 20 years. But the Web standards are world wide, so write applications that runs in the browser and the OS underneath does not matter. The application will run on any OS anywhere in the world on PCs or phones. The new browser standards are making the browser more powerful so this can happen, then the OS will be a background thing that runs the hardware and the browser will run the applications. Netscape recognized this as the future, (and made the mistake of publicly stating it) but MS killed them with a free browser, with which it controlled the market and it only opened web pages (not run applications) and MS did no serious browser development for over 10 years.
This separation of the running of the hardware from the running of the applications would have lead to a lot more innovation, (which is what Google is preaching now) because hardware development (changes) will no effect application operation as much, nor will browser development and application changes effect the hardware/OS as much, thus removing some current development restrictions
The market is now starting to end run that MS monopoly ploy, and if MS does not appropriately react to that market they will loose their OS dominance. (maybe will anyway) Nortel was overcome by the same market forces in a very similar way, because they depended to heavily on monopoly and did not react appropriately to a commodity market.
"In 2007, President George W. Bush appointed Zafirovski to the National Security Telecommunications Advisory Committee (NSTAC). In its advisory role to the president, the NSTAC provides industry-based analysis and recommendations on a wide range of policy and technical issues related to telecommunications, information systems, information assurance, infrastructure protection, and other national security and emergency preparedness concerns.
As a presidential appointee to NSTAC, Zafirovski serves as a resource for the President and his national security team in efforts to safeguard critical U.S. infrastructure and telecommunications networks. In this capacity, Zafirovski participates in discussions on a broad range of policy and technical issues related to telecommunications, critical infrastructure protection, homeland security, and other security concerns.
- by gggg sssss August 10, 2009 2:57 PM PDT
- Hopefully jail is the next stop, along with his predesessors
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