October 17, 2005 9:22 AM PDT
Nortel names former Motorola exec as CEO
On Monday, the company announced that Mike Zafirovski, the former chief operating officer of Motorola, will take over for Bill Owens as president and CEO of the telecommunications equipment maker.
"Mike Zafirovski has the kind of proven, team-building leadership that has seen him create significant new value during his career in two of the world's most important global corporations," Harry J. Pearce, Nortel's chairman, said in a statement. "He's the right leader to build on the important work of Bill Owens--and take Nortel to the next level."
Zafirovski, 51, left Motorola in early 2005. Analysts have praised him for helping to return Motorola's struggling cell phone business to profitability. Zafirovski was considered for the top post at Motorola back in 2003, when then-CEO Chris Galvin announced he was stepping down. But Zafirovski was ultimately passed over for former Sun Microsystems President Ed Zander.
Zafirovski, a native of Macedonia, emigrated to the United States in 1969. He started his career with General Electric in 1975, working for the company in a series of executive positions for the next 15 years. In 2000, he joined Motorola.
Many Wall Street analysts are pleased with Nortel's choice of a new top executive.
"We are very happy to see 'Mike Z' (as he is known) take over," Steve Kamman, an analyst at CIBC World Markets, wrote in a research note to investors. "He is very well-regarded as a very strong operational manager. We believe he has the perspective needed to focus Nortel's strategy. More importantly, he has the guts/drive/stamina to clean house and actually implement it."
Owens joined Nortel in April 2004 after the company fired former CEO Frank Dunn. For the past two and a half years, Nortel has been mired in an accounting scandal that has forced the company to restate earnings.
Owens, 65 and a former U.S. admiral, has guided the company through this tumultuous time, but analysts have been critical of his strategic vision for the company.
"While Mr. Owens deserves praise for stepping into a very tough role after the firing of CEO Frank Dunn, we had been increasingly concerned about strategic drift at Nortel," Kamman said. "In addition, he signally failed to deliver on a promise for greater transparency in financial reporting."
Zafirovski will take over as CEO on Nov. 15, 2005.