Nortel CEO steps down in massive restructuring
Nortel CEO Mike Zafirovski is stepping down from his position today as the nearly bankrupt Canadian telecommunications company continues its liquidation and reconstruction.
After losing almost $7 billion in two years, Nortel filed for chapter 11 bankruptcy in January of this year.
"Mike came to Nortel to transform this company," said Chairman of Nortel's Board of Directors, Harry Pearce. "He made great progress on many fronts including addressing significant accounting and related legal issues; improving the quality of Nortel products and the company's cost structure. His ambitious vision helped shift the economic center of the company from legacy to growth investments. It was unfortunate the transformation was derailed by a deteriorating economic climate and the company's legacy cost structure. The operating improvements and strategic investments made during his tenure significantly contributed to the fact that Nortel's businesses are so attractive to potential buyers today."
At the end of July, New Jersey-based Avaya Inc. agreed to purchase Nortel's Enterprise Soultions unit for around $475 million, and Swedish wireless communications company Ericsson entered into an agreement to acquire parts of Nortel's Carrier Networks division related to CDMA and LTE technology in North America.
At an emergency House of Commons Industry meeting on Friday, Research in Motion's co-CEO Mike Lazardis said Nortel's LTE assets should not be turned over to a foreign company.
"Nortel's intellectual property and workforce devoted to next-generation wireless research, known as LTE, is nothing short of a national treasure that Canada must not lose," Lazardis said to the committee.
Lazardis argued that the deal should be subject to government review even though it was below the limit that would require a government oversight. Transactions worth more than $312 million require a review, but Ericsson is buying Nortel's properties for only $149 million. It is unlikely that a review of the transaction will take place.