Nortel Networks Corporation
Type Public
OTC Markets GroupNRTLQ
Industry Telecommunications, Networking
Fate Under Liquidation[1][2][3]
Founded Montreal, Quebec (1895)
Headquarters Mississauga, Ontario, Canada
Key people John Doolittle, Chief Financial Officer[4]
Products Telecommunications and computer network equipment and software (see details below)
Revenue decrease$620 million USD (2010)[5]
Employees 550 (July 2011)

Nortel Networks Corporation (OTC Markets GroupNRTLQ), formerly known as Northern Telecom Limited and sometimes known simply as Nortel, was a multinational telecommunications equipment manufacturer headquartered in Mississauga, Ontario, Canada. On January 14, 2009, Nortel filed for protection from creditors in the United States, Canada, and the United Kingdom, in order to restructure its debt and financial obligations.[5] The period of bankruptcy protection has been extended to December 14, 2011.[6]

In June 2009, the company announced it would cease operations and sell off all of its business units.[7]




In 1882, a mechanical department was created within Bell Telephone Company of Canada to manufacture telephones and telephone equipment for Canada,[8] due to restrictions on importing telephone equipment from the United States.[9] In addition to phones, four years later, the department started manufacturing its first switchboard, a 50 line Standard Magneto Switchboard.[8][10] The small manufacturing department expanded yearly with the growth and popularity of the telephone to 50 employees in 1888.[10] By 1890 it transformed into its own branch of operations with 200 employees and a new factory was under construction.[8]

As the manufacturing branch expanded, its production ability increased beyond the demand for phones, and faced closure for several months a year without manufacturing other products.[11] This was a problem because the Bell Telephone Company of Canada charter would not allow them to build other products. So in 1895, Bell Telephone Company of Canada was required to spin off its manufacturing arm to build phones for sale to other companies as well as other devices such as fire alarm boxes, police street call boxes, and fire department call equipment. This company was incorporated as the Northern Electric and Manufacturing Company Limited.[8]

Northern Electric and Manufacturing Company

"The Northern Electric and Manufacturing Company" Limited, was incorporated on 7 December 1895, by the following Corporate Members/Board of Directors:[12] Charles Fleetford Sise Sr., President of Bell Telephone Company of Canada – Provisional Director; Robert Mackay, merchant – Provisional Director; Hugh Paton, manager of the Shedden Company - Provisional Director; The Hon. Joseph Rosaire Thibaudeau, Senator - Provisional Director; Robert Archer, gentleman - Provisional Director; Charles P. Sclater, secretary - Provisional Director; Lewis B. McFarlane, manager, all of the city and district of Montreal, Que.

The initial stock capital was $50,000 at $100 per share, with 93 percent held by Bell Telephone Company of Canada and the remainder held by the seven corporate members above.[12] The first general stock holders meeting was held on March 24, 1896.

In December 1899, The Bell Telephone Company of Canada bought a cabling company for $500,000 and a Canadian charter named it The Wire and Cable Company.[13] Northern Electric and Manufacturing further expanded its product line in 1900, manufacturing the first Canadian wind-up gramophones that played flat discs.[14] In 1911 the Wire and Cable company changed its name to the Imperial Wire and Cable Company.[10]

Northern Electric Company

1950 Logo

The construction of a new manufacturing plant started in 1913 at Shearer Street in Montreal, Canada, as preparations began for the integration of the two manufacturing companies. Then, in January 1914, the Northern Electric and Manufacturing Company and the Imperial Wire and Cable Company merged into the Northern Electric Company, and the new company opened the doors on a new manufacturing plant on January 1915. This facility at Shearer Street was the primary manufacturing center until the mid 1950s.[14] Edward Fleetford Sise was the president and his brother Paul Fleetford Sise was the vice-president and general manager.[10]

During the First World War Northern Electric manufactured the Portable Commutator a one-wire telegraphic switchboard for military operations in the field. In 1922, Northern started to produce, for $5, the "Peanut" vacuum tube, which required only a single dry-cell battery. The use of alternating current was still under development during this time. The "Northern Electric Peanut tube was the smallest tube made, and drew only one-tenth of an ampere and was the most remarkable radio frequency amplifier ever made."[15] During the 1920s Northern Electric was making kettles, toasters, cigar lighters, electric stoves, and washing machines.[16] In January 1923, Northern Electric started to operate an AM radio station with call letters CHYC, in the Shearer Street plant, and much of the programming was religious services for the Northern Electric employees and families in the community. In July 1923, CHYC AM was the first radio station to provide entertainment to the riders of the transcontinental train in a parlor car fitted with a radio set to receive the broadcast as it left Montreal and traveled west.[17] Later in the 1920s, Northern created the first talking movie sound system in the British Empire for a theater in Montreal.[16]

During the Great Depression of the 1930s, Northern Electric was affected, like most other companies. From the beginning of 1930 through the end of 1933, sales dropped from $34 million to $8.2 million, and the number of employees dropped from 6,100 to 2,400.[18]

Independence from Western Electric

In 1949, an antitrust suit in the U.S. forced AT&T/Western Electric to sell its stake in Northern Electric to Bell Canada. Deprived of its Western Electric tie, Northern began developing its own products. In 1953, Northern Electric produced its first television sets using tubes made by RCA.[19] Bell Canada acquired 100 percent of Northern Electric in 1964; through public stock offerings starting in 1973, Bell's ownership of Northern Electric and its successors would be reduced, though it continued to have majority control.

In 1966, the Northern Electric research lab, Northern Electric Laboratories (the predecessor to Bell-Northern Research), started looking into the possibilities of fiber optic cable, and in 1969, began work on digitizing telephone communications. Also in 1969, Northern began making inroads into the U.S. market with its switching systems. In 1972, it opened its first factory in the U.S. in Michigan. In 1975, Northern began shipping its first digital switching systems, one of the earliest such systems to be sold.

Northern Telecom was, with Bell-Northern Research, in the early 70's, a part owner of MicroSystems International a semiconductor manufacturer based in Kanata, outside Ottawa.

Northern Telecom and "Digital World"

In 1976, the company name was changed to Northern Telecom Limited, and management announced its intention to concentrate the company's efforts on digital technology.

"Digital World" was Northern Telecom’s daring declaration, made public by a three-page advertisement that appeared in major trade publications in 1976, that digital technology was the key to the future. It was the first to announce, and to deliver, one year ahead of schedule, a complete line of fully digital telecommunications products under the Digital World brand. The most well-known of the Digital World product family, the DMS-100, a fully digital central office switch serving as many as 100,000 lines, was a key contributor to the company’s revenue for close to 15 years.

In 1977, Nortel introduced its DMS line of digital central office telephone switches, providing explosive growth for the company, especially after the AT&T breakup in 1984. Northern Telecom became the first non-Japanese supplier to Nippon Telegraph and Telephone, and the company took advantage of opportunities in Europe and China.

Deregulation and the optical boom

In 1983, due to deregulation, Bell Canada Enterprises (later shortened to BCE) was formed as the parent company to Bell Canada and Northern Telecom. Bell-Northern Research was jointly owned 50-50 by Bell Canada and Northern Telecom. The combined three companies were referred to as the tricorporate.[20][21][22]

As Nortel, the streamlined identity it adopted for its 100th anniversary in 1995, the company set out to dominate the burgeoning global market for public and private networks.

In 1998, with the acquisition of Bay Networks, the company's name was changed to Nortel Networks to emphasize its ability to provide complete solutions for multiprotocol, multiservice, global networking over the Internet and other communications networks. As a consequence of the stock transaction used to purchase Bay Networks, BCE ceased to be the majority shareholder of Nortel. In 2000, BCE spun-out Nortel, distributing its holdings of Nortel to its shareholders. Bell-Northern Research was gradually absorbed into Nortel, as it first acquired a majority share in BNR, and eventually acquired the entire company.

In the late 1990s, stock market speculators, hoping that Nortel would reap increasingly lucrative profits from the sale of fibre optic network gear, began pushing up the price of the company's shares to unheard-of levels despite the company's repeated failure to turn a profit. Under the leadership of CEO John Roth, sales of optical equipment had been robust in the late 1990s, but the market was soon saturated. When the speculative telecom bubble of the late 1990s reached its pinnacle late in the year 2000, Nortel was to become one of the most spectacular casualties.

At its height, Nortel accounted for more than a third of the total valuation of all the companies listed on the Toronto Stock Exchange (TSX), employing 94,500 worldwide, with 25,900 in Canada alone.[23] Nortel's market capitalization fell from C$398 billion in September 2000 to less than C$5 billion in August 2002. Nortel's stock price plunged from C$124 to C$0.47. When Nortel's stock crashed, it took with it a wide swath of Canadian investors and pension funds, and left 60,000 Nortel employees unemployed. Roth was criticized after it was revealed that he cashed in his own stock options for a personal gain of C$135 million in 2000 alone.[24]

After the Internet bubble

Accounting restatements

CEO John Roth retired under controversy in 2001 and was succeeded by CFO Frank Dunn. Dunn presided over a dramatic restructuring of Nortel, which included laying off two-thirds of its workforce (60,000 staff) and writedowns of nearly US$16 billion in 2001 alone. This had some initial perceived success in turning the company around, with an unexpected return to profitability reported in the first quarter of 2003. The black ink triggered a total of US$19 million in bonuses to the top 43 managers, with US$5 million alone going to Dunn, chief financial officer Douglas Beatty, and controller Michael Gollogly. Independent auditor Deloitte & Touche advised audit committee chairman John Cleghorn and board chairman "Red" Wilson to look into the suspicious results, who promptly hired the law firm WilmerHale to vet the financial statements.[25] In late October 2003, Nortel announced that it intended to restate approximately $900M of liabilities carried on its previously reported balance sheet as of June 30, 2003, following a comprehensive internal review of these liabilities. The Company stated that the principal effects of the restatement would be a reduction in previously reported net losses for 2000, 2001, and 2002 and an increase in shareholders’ equity and net assets previously reported on its balance sheet. A dozen of the company's most senior executives returned $8.6 million dollars of bonuses they were paid based on the erroneous accounting. Investigators ultimately found about $3 billion in revenue had been booked improperly in 1998, 1999, and 2000. More than $2 billion was moved into later years, about $750 million was pushed forward beyond 2003 and about $250 million was wiped away completely. The accounting scandal hurt both Nortel's reputation and finances, as Nortel spent an estimated US$400 million on outside auditors and management consultants to retrain staff.[25]

To improve Nortel's liquidity in support of its operations, Nortel reached an agreement in 2003 with Export Development Canada for it to provide Nortel with a credit support facility of up to US$750 million.[26] Walter Robinson of the Canadian Taxpayers Federation denounced the line of credit, calling it "corporate welfare at its worst."[27]

Dunn, Beatty, and Gollogly were fired on April 28, 2004 for financial mismanagement, and were later charged with fraud by the RCMP, with a trial date scheduled on January 16, 2012.[28][29] The SEC also filed charges against them, as well as four vice-presidents, for civil fraud.[28]

Owens and Zafirovski

After Dunn's firing, retired United States Admiral Bill Owens, at the time a member of the board of directors, was appointed interim CEO. Nortel Networks subsequently returned to using the Nortel name for branding purposes only (the official company name was not changed). Nortel acquired PEC Solutions, a provider of information technology and telecommunications services to various government agencies and departments, in June 2005, renaming it Nortel Government Solutions Incorporated (NGS).[30] LG Electronics and Nortel formed a joint venture in August, with Nortel owning 50% plus one share, to offer telecom and networking solutions in the wireline, optical, wireless and enterprise areas for South Korean and global customers.

Peter W. Currie, previously the Chief Financial Officer (CFO) of the Royal Bank of Canada, was named CFO of Nortel in 2005, having previously served as Northern Telecom's CFO in the 1990s. Gary Daichendt, the former Chief Operating Officer of Cisco Systems, was hired as President and COO, and was expected to succeed Owens as CEO. Shortly afterward, Daichendt appointed ex-Cisco Chief Science Officer Gary Kunis as Chief Technology Officer (CTO). Both Garys were concerned about the overall direction of Nortel, especially when compared to Cisco, their previous employer. Just three months later, Daichendt resigned after both his restructuring plan and his suggestion that Owens and Currie leave the company immediately were rejected by the board of directors. Kunis quit shortly thereafter.[31] At the end of the year, directors "Red" Wilson and John Cleghorn retired from the board.

Mike S. Zafirovski, who had served as President and CEO of GE Lighting and then as Motorola President and COO, succeeded Owens as president and CEO on November 15, 2005.[32] Motorola filed a suit against Zafirovski's hiring, alleging that his new position would break the terms of the non-disclosure agreement he had signed. Nortel agreed to pay $11.5 million on his behalf to settle the lawsuit.[33] Nortel also paid out US$575 million and 629 million common shares in 2006 to settle a class-action lawsuit that accused the company of misleading investors about the health of the company.

Peter W. Currie stepped down as Executive Vice President and CFO in early 2007. In February, 2007, Nortel announced its plans to reduce its workforce by 2,000 employees, and to transfer an additional 1,000 jobs to lower-cost job sites. The Securities and Exchange Commission filed civil fraud charges against Nortel for accounting fraud from 2000 to 2003 to close gaps between its true performance, its internal targets and Wall Street expectations. Nortel settled the case, paying $35 million, which the Commission distributed to affected shareholders, and reporting periodically to the Commission on remedial measures to improve its financial accounting. Dunn, Beatty, and Gollogly were charged in June 2008 by the RCMP for criminal fraud related to their activities in 2002–2003.[34]

Nortel announced plans in February 2008 to eliminate 2,100 jobs, and to transfer another 1,000 jobs to lower-cost centres.[35] As part of the reductions, Nortel shut down its Calgary campus in 2009.[36]

During its reporting of third quarter 2008 results, Nortel announced it would restructure into three vertically-integrated business units: Enterprise, Carrier Networks, and Metro Ethernet Networks. As part of the decentralization of its organization, four executive positions were eliminated, effective January 1, 2009: Chief Marketing Officer Lauren Flaherty, Chief Technology Officer John Roese, Global Services President Dietmar Wendt, and Executive Vice President Global Sales Bill Nelson. A net reduction of 1,300 jobs was also announced.[37] As its stock price dropped below $1, the New York Stock Exchange notified Nortel that it would be delisted if its common shares failed to rise above $1 per share within 6 months.[38] Rumours continued to persist of Nortel's poor financial health, amid the late 2000s recession, and its bids for government funds were turned down.[39]


Protection from creditors

On January 14, 2009, Nortel filed for protection from creditors, in the United States under Chapter 11 of the United States Bankruptcy Code, in Canada under the Companies' Creditors Arrangement Act, and in the United Kingdom under the Insolvency Act 1986.[5][40][41] Nortel was the first major technology company to seek bankruptcy protection in this global downturn.[42] Nortel had an interest payment of $107 million due the next day, approximately 4.6% of its cash reserves of approximately $2.3 billion.[43] After the announcement, the share price fell more than 79% on the Toronto Stock Exchange. Export Development Canada agreed to provide up to C$30 million in short-term financing through its existing credit support facility with Nortel. The Canadian government resisted characterizing its position on Nortel as a bailout.[44]

Nortel initially hoped to re-emerge from bankruptcy. It paid out retention bonuses to almost 1,000 top executives, totalling up to US$45 million.[45] This drew criticism due to the fact severance payments to employees laid-off prior to the creditor protection filing were withheld.

At the end of January 2009, Nortel announced that it would be discontinuing its WiMAX business and its joint agreement with Alvarion.[46][47] Nortel subsequently sold its Layer 4-7 application delivery business to Israeli technology firm Radware for $18 million, after Radware had initially placed a stalking horse bid.[48][49] Nortel had acquired the application switch product line in October 2000 when it purchased Alteon WebSystems.[50]


With the worsening recession and drop in stock markets deterring potential companies from bidding for Nortel's assets, and many of Nortel's major customers reconsidering their relationships with the restructuring company,[51] in June Nortel announced that it no longer planned to emerge from bankruptcy protection, and would seek buyers for all of its business units.[1] After announcing it planned to sell off all of its assets, Nortel shares were delisted from the Toronto Stock Exchange on June 26, 2009 at a price of $0.185 per share, down from its high in 2000 when it comprised a third of the S&P/TSX composite index.[1][2][52] Mike Zafirovski subsequently resigned in August, and Nortel's board of directors was reorganized with three members instead of nine.[53] Nortel handed out $14.2 million in cash compensation to seven executives in 2009. Nortel also paid out $1.4 million to 10 former and current directors, and paid $140 million to lawyers, pension, human resources and financial experts helping to oversee the company’s bankruptcy proceedings.[54]

Nokia Siemens Networks made a stalking horse bid to purchase Nortel's CDMA and LTE assets for $650 million.[1] By the July 21 deadline for additional bids, MatlinPatterson and Ericsson had made offers,[55] and Ericsson emerged as the victor in the following auction, with a purchase price of $1.13 billion.[56][57] Avaya won an auction for Nortel's Enterprise Solutions business, including Nortel's stake in Nortel Government Solutions and DiamondWare, for $900 million,[58] after having placed a stalking horse bid of $475 million.[59] In November, Nortel sold its MEN (Metro Ethernet Networks) unit to Ciena Corporation for US$530 million in cash and US$239 million in convertible notes,[60][61] and its GSM business at auction to Ericsson and Kapsch for US$103 million.[62][63][64][65] Hitachi purchased the Next Generation Packet Core assets.[66] As insurance against judgments in class action lawsuits filed by former employees, John Roth filed in December 2009 for a US$1 billion indemnification from Nortel, joining the list of U.S. creditors.[67]

In February 2010, Ernst & Young, the court-appointed monitor of Nortel's Canadian bankruptcy proceedings, reported that the assets of Nortel's Health and Welfare Trust had a shortfall of $37 million in its net assets as of December 31, 2008. The trust supports pensioners' medical, dental and life insurance benefits, as well as income support for some groups such as long-term disability recipients.[68] Also in February, Nortel negotiated a $57-million deal to wind up the health care and other benefits provided to former Canadian employees. Shortly afterwards, Nortel proposed spending $92.3M on retention bonuses for 1,475 employees in its Nortel Business Services and Corporate groups, with $2.5 million in incentives going to Christopher Ricaute, president of Nortel Business Services; $27 million allocated for Canadian employees; and $55 million allocated for U.S. employees.[69] The proposed plan was later extended by an additional $27 million.[70] Claiming that the retention bonuses proposal is extraordinary, acting US trustee, Roberta DeAngelis, objected to the payment of $55.6 million to 866 employees.[71] However, court appointed representatives for Nortel former employees, who are creditors in the Ontario bankruptcy court, have signed an agreement to not oppose any employee incentive program.

Genband purchased the Carrier VoIP and Application Solutions (CVAS) unit in May 2010, as Nortel accepted its stalking horse bid of $282 million, with adjustments that decreased the net sale price to about $100 million, without a formal bidding process.[72][73][74] Ericsson purchased Nortel's share in its joint venture with LG Electronics for US$242 million, forming LG-Ericsson, in June 2010.[75][76] Ericsson also purchased Nortel's final operating unit, the Multi-Service Switch division, in September 2010 for US$65 million.[77][78][79] Nortel's Ottawa campus on Carling Avenue was purchased by Public Works and Government Services Canada (PWGSC) in October 2010, for a cash purchase price of CDN$208 million.[80]

The last major asset of Nortel, approximately 6,000 patents and patent applications encompassing technologies such as wireless, wireless 4G, data networking, optical, voice, Internet, and semiconductors, was sold for $4.5 billion to a consortium including Apple, EMC, Ericsson, Microsoft, Research In Motion, and Sony, pending American and Canadian court approval.[81][82] (Google had placed the initial stalking horse bid of $900 million[83] and later upped the bid to $1,902,160,540, then $2,614,972,128, and eventually $3.14159 billion, which are references to Brun's constant, Meissel–Mertens constant, and pi.)[84] Bankruptcy filings state that Nortel owes former Canadian engineers $285,000 for patent awards that were not paid.[85]

In October 2011, the administrators of Nortel's British subsidiary lost their appeal to overturn a court order requiring them to pay £2.1 billion into Nortel's underfunded pension plan.[86]


Nortel made telecommunications and computer network equipment and software. It served both general businesses and communications carriers (landline telephone, mobile phone, and cable TV carriers). Technologies included telephony (voice) equipment of all kinds, optical fiber, local wireless, and multimedia.

Past products included:

Telephone Systems Telephone sets and terminals LAN and MAN equipment
Application Server 5200 and Application Server 5300 (AS5300) Nortel business phones, digital sets for Meridian and Norstar Baystack and ERS (Ethernet Routing Switch), managed network switches for Ethernet; ERS-8600, ERS-8300, ERS-5600, ERS-5500, ERS-4500, ERS-2500
Digital Multiplex System (DMS and SL-100 families) large-scale digital carrier phone switch Northern Electric home phones Multiservice Switch (MSS) (formerly Passport); MSS20000, MSS15000, MSS7400, MSS6400
Meridian 1 (SL-1) medium-to-large-scale PBX Northern Telecom home phones Metro Ethernet Routing Switch 8600
Meridian Norstar small-to-medium-scale digital key telephone system Nortel payphones Nortel Secure Network Access (switch and software)
Nortel Communication Servers, medium-to-large-scale VoIP PBX Systems; CS2100, CS2000, CS1500, CS1000 Nortel IP Phone 1120E
DV-1 minicomputer digital voice and data system Nortel IP Phone 1140E
SG-1 analog stored program control PBX
SP-1 analog stored program control carrier switch
Routers Software Other WAN equipment
Secure Router 1000 Systems; SR1004, SR1002, SR1001S, SR1001 Visualization Performance & Fault Manager (VPFM) 1 Mbit/s modem
Secure Router 3120 Nortel Enterprise Switch Manager
Secure Router 4134 Nortel File and Inventory Manager
Secure Router 8000 Systems; SR8002, SR8004, SR8008, SR8012 Nortel Multi-link Trunking Manager
VPN Routers; 1750, 2700, 2750, 5000 Nortel Multicast Manager
Nortel Speech Server
Passport Carrier Release
Nortel Routing Manager
Nortel Security Manager
Nortel VLAN manager
Unified Communications Management
Agile Communication Environment

Criticism and controversy

The criticisms and controversies outlined below revolve around government bailouts, illegal breach of trust in Nortel's Health and Welfare Trust, bookkeeping irregularities, excessive compensation for Nortel executives, the treatment of company pensioners and the creditor claim made by Nortel's ex-CEO[citation needed]

Government bailouts


On Feb 16, 2003 the Winnipeg Sun published an article criticising the Canadian Federal government for propping up “mega-loser Nortel” through Export Development Canada (EDC). The article interviewed Walter Robinson of the Canadian Taxpayers Federation who termed this EDC support as "corporate welfare at its worst." Mr Robinson was appalled that Canadians who already lost billions on Nortel on the stock market would be asked for even more money through their taxes to support Nortel.[27]


EDC had agreed to provide up to $30 million in short-term financing through an existing bonding facility. The Canadian government resisted characterizing its position on Nortel as a bailout.[87]

Illegal breach of trust in Nortel's Health and Welfare Trust

There have been reports of financial irregularities at Nortel's Health and Welfare Trust. Diane Urquhart, a financial analyst, testified before a parliamentary committee that $100 million is missing from the HWT and that a $37 million loan to the corporation has not been paid back.[88] The HWT was an unregistered trust maintained by Nortel to provide medical, dental, life insurance, long-term disability and survivor income and pension transition benefits.[89][90] Until 2005 Nortel fully funded the disability insurance in its HWT. However, it is alleged that since then, the HWT Governance Committees and third party trustee, Northern Trust, breached their fiduciary duties to protect Nortel's disabled employees and survivors of deceased employees by allowing Nortel to misdirect over $100 million from the HWT for purposes inconsistent with the terms of the HWT.[91]

Bookkeeping irregularities

In 2007 the Ontario Securities Commission laid charges against former senior financial officials from Nortel.[92]

Executive compensation


In 2003 Nortel paid tens of millions of dollars in so-called "return to profitability" bonuses, largely to a select group of senior managers. The "return to profitability" was a fabrication achieved by the release of $490 million in reserves to boost earnings.[93]


In 2008, despite continuing losses, layoffs and declining share prices at the struggling telecom-gear maker, Nortel Networks CEO Mike Zafirovski is awarded a 21.5 percent pay increase to $10.1 million.[94]


As Nortel entered protection from creditors proceedings, it paid out retention bonuses to almost 1,000 top executives, totalling up to US$45 million,[45] drawing criticism as the company withheld severance payments to employees laid-off prior to the creditor protection filing. Nortel proceeded with thousands of additional layoffs without severance,[95][96] and the pension fund remained underfunded,[97] while Nortel paid $14.2 million in cash to seven executives. Nortel also paid $1.4 million to ten former and current directors, and paid $140 million to lawyers, pension, human resources and financial experts helping to oversee the company’s bankruptcy proceedings.[54]


In a U.S. court filing on February 11, 2010, Nortel proposed to spend $92.3M on retention bonuses for 1,475 employees in its Nortel Business Services and Corporate groups. According to the plan, Christopher Ricaurte, president of Nortel Business Services, will receive $2.5 million in incentives. In all, Canadian employees are eligible for $27 million, U.S. employees $55 million, and about $10 million will go to others. This proposed plan came the same week Nortel negotiated a $57-million deal to wind up health care and other benefits for former Canadian employees.[98] Claiming that the retention bonuses proposal is extraordinary, acting US trustee, Roberta DeAngelis, objected to the payment of $55.6 million to 866 employees.[71] However, court appointed representatives for Nortel former employees, who are creditors in the Ontario bankruptcy court, have signed an agreement to not oppose any employee incentive program.

Treatment of Nortel pensioners

On June 23, 2010 the newsobserver published a story critical of the treatment pensioners have been receiving from their former employer, Nortel. According to the article Nortel has asked a federal court to terminate medical coverage, prescription drug coverage, long-term disability and life insurance of 4,000 retirees and dependents, claiming the benefits are costing the company $2 million per month. Nortel blamed the company's creditors for this decision.[99]

Nortel ex-CEO files as a creditor seeking $1 billion from the proceeds of bankruptcy

In the middle of the decade several class-action lawsuits were filed against John Roth and others, by former employees who felt that their 401K company plans were depleted due to misrepresentation by the defendants. They claimed they were duped into investing in Nortel stock, when those who encouraged them to do so allegedly knew that the company was ailing. John Roth left Nortel in 2001 with more than $130 million.

In 2009 Mr. Roth filed a claim for $1 billion, aiming to become a creditor to the assets of Nortel along with all other Nortel employees, in case the class action lawsuits against him succeeded.[100][101]

Corporate information


Nortel's former head offices at 195 The West Mall.

Nortel's current headquarters is located at 5945 Airport Road in Mississauga, Ontario.[102] Previous locations of its head offices include Brampton, Ontario (sold to Rogers Communications in 2006 and now known as Rogers Park, Brampton), and at 195 The West Mall (now used by SNC-Lavalin) in Toronto.[103]

Global worksites, partners, and customers

Former campus in California

Nortel expanded into the U.S. in 1971. The company eventually had employees in over 100 locations in the U.S. with R&D, software engineering, and sales centers in many states including California, Florida, Georgia, Illinois, Maryland, Massachusetts, North Carolina, Texas, and Virginia. Nortel's full service R&D centres were located in Ottawa (its R&D headquarters), Beijing, and Guangzhou.[104] In Canada, Nortel also has R&D sites in Montreal, Belleville, and Calgary. In the United States, Nortel's major R&D sites were in Research Triangle Park (North Carolina), Richardson (Texas), Billerica (Massachusetts), and Santa Clara.

Nortel had a significant presence in Europe, Middle East, Africa, the Caribbean, and Latin America. Nortel delivers network infrastructure and communication services to customers across Asia in Mainland China, Hong Kong, Taiwan, South Korea, Japan, Singapore, Thailand, Malaysia, India, Pakistan, Australia, New Zealand, and Turkey (Nortel owned 53.17% of Nortel Netaş, originally established as a joint venture with Turkish PTT in 1967[105]). In addition, the company had three joint ventures in the People's Republic of China, including Guangdong Nortel Telecommunications Equipment (GDNT), who operates Nortel's full service R&D centres in China.

Business structure

At the start of 2010, based on membership in Nortel's benefit plan, there were 1,637 employees working for Nortel Networks and 982 working for Nortel Technology in Canada.[106] In February 2008, Nortel employed approximately 32,550 people worldwide, including 6,800 employees in Canada and 11,900 in the United States.[35] Nortel operations are divided into the following segments:[107][108]

  • Carrier Networks (CN): Mobility networking solutions, including CDMA, GSM, and UMTS, and carrier networking solutions, both circuit and packet based.
  • Enterprise Solutions (ES): Enterprise networking solutions, including circuit and packet based voice, data, security, multimedia messaging and conferencing, and call centres.
  • Metro Ethernet Networks (MEN): Optical and metropolitan area networking solutions, for carrier and enterprise customers.
  • Global Services (GS): Services in four areas: network implementation, network support, network management, and network applications (including web services).

Corporate governance

Current members of the board of directors:[53]

Former members of the board of directors:[109]

  • John Roth
  • Robert Ellis Brown
  • John Cleghorn
  • Robert Alexander Ingram
  • James Blanchard
  • Yves Fortier
  • Guylaine Saucier
  • Sherwood Smith
  • Lynton "Red" Wilson, former chairman of the board
  • Frank C. Carlucci, former chairman of the board

Past Leaders:[110]

See also

Portal icon Ottawa portal
Portal icon Toronto portal
Portal icon Companies portal


  1. ^ a b c d "Nortel To Sell CDMA Business and LTE Assets; Company Advancing in Its Discussions With External Parties To Sell Other Businesses" (Press release). Nortel Networks. 2009-06-19. Retrieved 2009-06-19. 
  2. ^ a b "It's official: Nortel shares are worthless" (Press release). The Globe and Mail. 2009-06-22. Retrieved 2009-06-22. 
  3. ^ Silver, Sarah (June 20, 2009). "Nortel Will Liquidate Assets". The Wall Street Journal. Retrieved June 22, 2009. 
  4. ^ "Nortel Executive Leadership". http:// Retrieved 2011-10-14. 
  5. ^ a b c "Nortel Reports Financial Results for the Fourth Quarter and Full Year 2010" (Press release). Nortel Networks Corporation. 2011-03-04. Retrieved 2011-03-15. 
  6. ^ "NORTEL OBTAINS FURTHER EXTENSION OF STAY PERIOD UNDER CCAA" (Press release). Nortel Networks Corporation. 2011-06-30. Retrieved 2011-07-02. 
  7. ^ Gillies, Rob. "Nortel to sell itself off in pieces". Associated Press, via Retrieved 2009-11-18. 
  8. ^ a b c d Nortel Networks (2008). "Corporate information: Nortel History - 1874 to 1899". Nortel Networks. Retrieved 2009-04-30. 
  9. ^ Murphy, George Joseph (1993). A History of Canadian Accounting Thought and Practice. Taylor & Francis. p. 82. ISBN 0815312482, 9780815312482. 
  10. ^ a b c d Rens, Jean-Guy; Roth, Käthe (2001). The Invisible Empire: A History of the Telecommunications Industry in Canada. McGill-Queen's Press - MQUP. p. 129. ISBN 077352052X, 9780773520523. 
  11. ^ Rens, Jean-Guy; Roth, Käthe (2001). The Invisible Empire: A History of the Telecommunications Industry in Canada. McGill-Queen's Press - MQUP. p. 130. ISBN 077352052X, 9780773520523. 
  12. ^ a b Sessional Papers. C. H. Parmelee. 1896. p. 34. 
  13. ^ Babe, Robert E. (1990). Telecommunications in Canada: technology, industry, and government. University of Toronto Press. p. 177. ISBN 0802067387, 9780802067388. 
  14. ^ a b Nortel Networks (2009). "Corporate information: Nortel History - 1900 to 1919". Nortel Networks. Retrieved 2009-04-03. 
  15. ^ Lewis, H. Spencer (1998). The Mystic Triangle: A Modern Magazine of Rosicrucian Philosophy. Kessinger Publishing. ISBN 0766107051, 9780766107052. 
  16. ^ a b Nortel Networks (2009). "Corporate information: Nortel History - 1920 to 1929". Nortel Networks. Retrieved 2009-04-03. 
  17. ^ Rens, Jean-Guy; Roth, Käthe (2001). The Invisible Empire: A History of the Telecommunications Industry in Canada. McGill-Queen's Press - MQUP. p. 197. ISBN 077352052X, 9780773520523. 
  18. ^ Chapuis, Robert J.; Joel, Amos E. (2003). 100 Years of Telephone Switching: Manual and Electromechanical Switching, 1878-1960's (2, illustrated ed.). IOS Press. p. 282. ISBN 1586033492, 9781586033491. 
  19. ^ Nortel Networks (2007). "Corporate information: Nortel History - 1950 to 1959". Nortel Networks. Retrieved 2007-11-17. 
  20. ^ "Northern Electric - A Brief History". Retrieved 2006-09-12. 
  21. ^ Rens, Jean-Guy (2007). "Canada and the Birth of the Digital World: The Contributions of R. Charles Terreault". Canada's Telecommunications Hall of Fame. Retrieved 2007-10-14. 
  22. ^ Oliver, Richard; Scheffinan, David (1995). "The Regulation of Vertical Relationships in the US Telecommunications Industry" (PDF). Managerial and Decision Economics 16 (4): 327–348. doi:10.1002/mde.4090160407. 
  23. ^ Wahl, Andrew (2009-03-24). "The good, the bad and the ugly: Nortel Networks". Canadian Business magazine. Retrieved 28 July 2009. 
  24. ^ Canada (2005-01-12). "New board 'is an improvement by a mile'". Retrieved 2011-03-12. 
  25. ^ a b [1][dead link]
  26. ^ "Nortel Networks Announces US$750 Million Support Facility with EDC and Details of Special Matters to be Considered at Upcoming Shareholders Meeting" (Press release). Nortel Networks Corporation. 2003-02-14. Retrieved 2009-12-09. 
  27. ^ a b McKibbon, Sean (2003-02-16). "Bailout Billion; Taxpayers to prop up mega-loser Nortel". Winnipeg Sun (Winnipeg: Sun Media): p. 8. 
  28. ^ a b Ottawa Citizen (2008-06-20). "Top former Nortel execs charged with fraud". CanWest MediaWorks Publications. Retrieved 2011-10-07. 
  29. ^ Postmedia News (2011-10-03). "Nortel criminal trial to begin Jan. 16". Montreal Gazette. Retrieved 2011-10-03. 
  30. ^ Nortel Government Solutions (2008). "Corporate Information: Nortel Government Solutions". Nortel Government Solutions. Retrieved 2008-06-01. 
  31. ^ [2][dead link]
  32. ^ "Nortel Announces Mike Zafirovski as President and CEO" (Press release). Nortel Networks. 2005-10-17. Retrieved 2008-06-01. 
  33. ^ McMillan, Robert. "Motorola, Nortel settle Zafirovski dispute". Retrieved 2006-09-05. 
  34. ^ Austen, Ian (2008-06-20). "3 Ex-Nortel Executives Are Accused of Fraud". The New York Times. Retrieved 2008-06-25. 
  35. ^ a b CBC News (2008-02-27). "Nortel cutting 2,100 jobs". Canadian Broadcasting Corporation. Retrieved 2008-06-01. 
  36. ^ CBC News (2008-05-27). "Nortel to close Calgary operations". Canadian Broadcasting Corporation. Retrieved 2008-06-01. 
  37. ^ "Nortel Reports Financial Results for the Third Quarter 2008" (Press release). Nortel Networks. 2008-11-10. Retrieved 2008-11-11. 
  38. ^ "Nortel gets delisting warning from NYSE". Triangle Business Journal. Friday, December 12, 2008. Retrieved 2008-12-14. 
  39. ^ "Who killed Nortel?". National Post. 2009-01-09. Retrieved 2010-08-14. 
  40. ^ Ricknäs, Mikael (2009-01-14). "Nortel files for Chapter 11 bankruptcy protection". International Data Group. Retrieved 2009-01-15. 
  41. ^ Greene, Tim (2009-01-14). "Nortel bankruptcy filings are last-ditch effort". Network World. Retrieved 2009-01-15. 
  42. ^   (2009-06-22). "Canada's Nortel to sell itself off in pieces". Retrieved 2011-03-12. 
  43. ^ CBC News (2009-01-14). "Nortel Networks files for bankruptcy protection". Canadian Broadcasting Corporation. Retrieved 2009-01-14. [dead link]
  44. ^ Palmer, Randall (2009-01-14). "Canada government pledges to help Nortel". Reuters. 
  45. ^ a b Hill, Bert (2009-03-01). "Nortel pays big bonuses to keep execs". National Post. Retrieved 2010-03-03. 
  46. ^ "Nortel Refines Focus of Carrier Business: Ends Joint Agreement with Alvarion for Mobile WiMAX" (Press release). Nortel Networks. 2009-01-29. Retrieved 2009-01-31. 
  47. ^ Drew, Jeff (2009-01-30). "Nortel getting out of WiMAX". Triangle Business Journal (American City Business Journals). Retrieved 2009-01-31. 
  48. ^ correspondent, Globes (2009-02-322). "Radware buys Nortel product line". Globes [online]. Globes [online], Israel business news. Retrieved 2009-02-21. 
  49. ^ "Nortel Completes Divestiture of Certain L4-7 Data Assets to Radware" (Press release). Nortel Networks. 2009-03-31. Retrieved 2009-07-25. 
  50. ^ "Nortel to Divest Layer 4-7 Data Portfolio: Enters into Asset Purchase Agreement with Radware" (Press release). Nortel Networks. 2009-02-19. Retrieved 2009-02-22. 
  51. ^ "NP Story". National Post. Retrieved 2010-08-14. 
  52. ^ Tedesco, Theresa; Jamie Sturgeon (2009-06-27). "Nortel: Cautionary tale of a former Canadian titan". Canwest Publishing. Retrieved 2009-07-25. 
  53. ^ a b "Nortel Announces Board of Directors, Management Team and Organizational Changes" (Press release). Nortel Networks Corporation. 2009-08-10. Retrieved 2009-08-10. 
  54. ^ a b "Bankrupt Telecom Company Doled Out $8.6M in Bonuses Last Year". 2010-03-19. Retrieved 2011-03-12. 
  55. ^ Bagnall, James (2009-07-24). "Moment of truth for Nortel's wireless unit". Ottawa Citizen. Retrieved 2009-07-25. 
  56. ^ "Nortel Selects Ericsson as Successful Bidder For CDMA Business and LTE Access Assets" (Press release). Nortel Networks. 2009-07-25. Retrieved 2009-07-25. 
  57. ^ Bagnall, James (2009-07-25). "Ericsson prevails in fight for Nortel's wireless business with $1.13B bid". Ottawa Citizen. Retrieved 2009-07-25. [dead link]
  58. ^ "Nortel selects Avaya as successful bidder for Enterprise Solutions Business." (Press release). Nortel Networks Corporation. 2009-09-14. 
  59. ^ "Nortel To Sell Enterprise Solutions Business" (Press release). Nortel Networks Corporation. 2009-07-20. Retrieved 2009-07-21. 
  60. ^ "Nortel Selects Ciena as Successful Bidder for Optical Networking and Carrier Ethernet Businesses" (Press release). Nortel Networks Corporation. 2009-11-23. Retrieved 2009-12-20. 
  61. ^ Musgrove, Mike (24 November 2009). "Ciena buys Nortel unit to expand footprint". The Washington Post. Archived from the original on 24 November 2009. Retrieved 24 November 2009. "subtitle: $769 million deal to triple Maryland tech firm's market share" 
  62. ^ "Nortel Selects Ericsson and Kapsch as Successful Bidders for GSM/GSM-R Business" (Press release). Nortel Networks Corporation. 2009-11-25. Retrieved 2009-12-20. 
  63. ^ "Nortel Announces Plans to Sell its GSM/GSM-R Business" (Press release). Nortel Networks Corporation. 2009-09-30. Retrieved 2009-10-01. 
  64. ^ ""Nortel to sell Entire GSM Business"". Retrieved 2011-03-12. 
  65. ^ "Nortel Provides Update on Auction Date for the Sale of its GSM/GSM-R Business; Obtains Further Extension of Stay Period Under CCAA; and Obtains Canadian and U.S. Court Approval for Sale of Packet Core Assets" (Press release). Nortel Networks Corporation. 2009-10-28. Retrieved 2009-11-14. 
  66. ^ "Nortel Completes Sale of Assets of Next Generation Packet Core Network Components to Hitachi". 2009-08-10. Retrieved 2011-03-12. 
  67. ^ "John Roth seeks $1B protection from lawsuits". CBC. 2009-12-17. 
  68. ^ Hill, Bert (2010-02-23). "Nortel leaves $37M health-fund gap". Ottawa Citizen. Retrieved 2010-01-03. [dead link]
  69. ^ Hill, Bert (2010-02-12). "Nortel allots $92.3M for top staff; Retention bonuses 'standard procedure' for key workers in bankruptcy proceedings". Ottawa Citizen (Ottawa Citizen): pp. F.1. 
  70. ^ Hill, Bert (2010-02-24). "Retention plan gives Nortel added flexibility". Ottawa Citizen (Ottawa Citizen): pp. C.1. 
  71. ^ a b Post a Job. "Nortel's Proposed Incentive Payments Opposed by U.S. Trustee". Retrieved 2011-03-12. 
  72. ^ "Nortel Completes Sale of Carrier VoIP and Application Solutions Business to GENBAND" (Press release). Nortel Networks Corporation. 2010-05-28. Retrieved 2010-10-20. 
  73. ^ "Nortel to Sell Carrier VoIP and Application Solutions Business" (Press release). Nortel Networks Corporation. 2009-12-23. Retrieved 2010-01-05. 
  74. ^ Le Maistre, Ray (2009-12-23). "Genband Bids $282M for Nortel's VoIP Unit". Light Reading. Retrieved 2010-01-05. 
  75. ^ "Acquisition of Nortel's stake of LG-Nortel completed" (Press release). Ericsson. 2010-06-30. Retrieved 2010-10-20. 
  76. ^ "Nortel Completes Sale of Shares in LG-Nortel to Ericsson" (Press release). Nortel Networks Corporation. 2010-06-29. Retrieved 2010-10-20. 
  77. ^ "Acquisition of Nortel's Multi-Service Switch business" (Press release). Ericsson. 2010-09-25. Retrieved 2010-10-20. 
  78. ^ "Nortel Announces Ericsson as Successful Acquirer of Its Multi Service Switch Business" (Press release). Nortel Networks Corporation. 2010-09-25. Retrieved 2010-10-20. 
  79. ^ Hill, Bert (2010-09-26). "Ericsson beats Ottawa bidders for last big Nortel division". Ottawa Citizen. Retrieved 2010-10-20. 
  80. ^ "Nortel To Sell Ottawa Carling Campus To Public Works and Government Services Canada" (Press release). Nortel Networks Corporation. 2010-10-19. Retrieved 2010-12-31. 
  81. ^ Musil, Steven (2011-06-30). "Apple, RIM in group buying Nortel patents for $4.5B" (HTML). CBS Interactive.$4.5b/?part=rss&subj=news&tag=2547-1_3-0-20. Retrieved 2011-10-07. 
  82. ^ "Nortel sells patents to consortium for $4.5B". The Associated Press. 2011-07-01. 
  83. ^ Marlow, Iain (2011-04-04). "Bid for Nortel patents marks Google's new push into mobile world". The Globe and Mail (Toronto). 
  84. ^ Damouni, Nadia (July 01, 2011). "Dealtalk: Google bid "pi" for Nortel patents and lost". Reuters. Retrieved July 02, 2011. 
  85. ^ Hill, Bert (2011-10-05). "In patent wars, the casualty is progress" (HTML). Ottawa Citizen. Retrieved 2011-10-20. 
  86. ^ Chellel, Kit (2011-10-15). "Lehman, Nortel lose $3.5B pension appeal" (HTML). Ottawa Citizen. Retrieved 2011-10-20. 
  87. ^ Palmer, Randall (2009-01-14). "UPDATE 2-Canada government pledges to help Nortel". Reuters. 
  88. ^ Standing committee on Finance hearings[dead link]
  89. ^ Superior Court of Justice - Ontario Endorsement[dead link]
  90. ^ "CTV Ottawa- Senate kills bill that would help disabled Nortel workers - CTV News". 2010-12-09. Retrieved 2011-03-12. 
  91. ^
  92. ^ "This page is available to GlobePlus subscribers". Toronto: Retrieved 2011-03-12. 
  93. ^ "SEC Charges Four Former Senior Executives of Nortel". 2007-03-12. Retrieved 2011-03-12. 
  94. ^ Ottawa, The (2008-02-29). "Troubled Nortel boosts CEO's pay". Retrieved 2011-03-12. 
  95. ^ Nortel slashes 10% of workforce
  96. ^ "Nortel cuts another 3,200 workers worldwide with no severance pay". 2009-02-25. Retrieved 2011-03-12. 
  97. ^ by Kelly M. TealKelly Teal, Senior Editor (2009-07-17). "An Oral History: Inside Nortel's Meltdown". Retrieved 2011-03-12. 
  98. ^ Nortel allots $92.3M for top staff[dead link]
  99. ^ "Nortel wants to dump retirees". News Observer. June 23, 2010. 
  100. ^ .}. 
  101. ^ {{ | title = John Roth Wants Nortel’s Help! | author=Mark Evans | date = 2009-12-18 | url = | accessdate = 2010-12-06 }}
  102. ^ Nortel Networks Corporation (2009). "Nortel in Canada - Local Offices". Nortel Networks Corporation. Retrieved 2009-12-10. 
  103. ^ "Nortel Selects Toronto Location for New Global Headquarters" (Press release). Nortel Networks. 2005-12-20. Retrieved 2006-09-12. 
  104. ^ Nortel Networks (2008). "Nortel's Major Research & Development Locations". Retrieved 2008-09-04. 
  105. ^ Nortel Networks (2007). "Nortel Netaş". Retrieved 2007-08-08. 
  106. ^ Ernst & Young (2010-02-23). "Supplement to the Thirty-Ninth Report of the Monitor" (PDF). p. 28.'s%20Reports/SupplementtoThirty-NinthRedatedFeb232010.pdf. Retrieved 2010-02-25 
  107. ^ Nortel Networks (2006-09-30). "United States SEC filing, 2006 Third Quarter Form 10-Q" (PDF). Retrieved 2006-11-12. 
  108. ^ Nortel Networks (2007-03-31). "United States SEC filing, 2007 First Quarter Form 10-Q" (PDF). Retrieved 2007-06-26. 
  109. ^ Nortel Networks. "Board of Directors". Retrieved 2006-10-23. 
  110. ^ "Nortel's List of Past Leaders". 


External links

Business data

Wikimedia Foundation. 2010.

Игры ⚽ Нужен реферат?

Look at other dictionaries:

  • Nortel — Networks Corporation Rechtsform Corporation ISIN CA6565685089 Gründung …   Deutsch Wikipedia

  • Nortel — Lema Business Made Simple Fundación 1895 Sede …   Wikipedia Español

  • Nortel F.C. — Nortel Full name Nortel Football Club Founded 1964 (as Standard Telephones Cables) Ground Monkstown Avenue, Newtownabbey Chairman Alan Beggs …   Wikipedia

  • Nortel — (Northern Telecommunications) n. worldwide network communications company (headquartered in Toronto, Canada) …   English contemporary dictionary

  • Nortel — Création 1895 à Montréal Forme juridique  ?? …   Wikipédia en Français

  • Nortel Matra Cellular — Nortel Logo de Nortel Networks Corporation Création 1895 à Montréal …   Wikipédia en Français

  • Nortel Networks — Nortel Logo de Nortel Networks Corporation Création 1895 à Montréal …   Wikipédia en Français

  • Nortel Networks Corporation — Nortel Logo de Nortel Networks Corporation Création 1895 à Montréal …   Wikipédia en Français

  • Nortel Networks Ltd. — Nortel Logo de Nortel Networks Corporation Création 1895 à Montréal …   Wikipédia en Français

  • Nortel Networks — Corporation Unternehmensform Corporation ISIN …   Deutsch Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”