Wednesday, April 29, 2009

Is it Possible to Save Nortel?

Former president of Nortel Canada, Robert Ferchat, made an impassioned plea to save Nortel. His arguments are long on emotions, but short on specifics.

Ferchat bemoans the potential loss of a 114-year old company with “a stellar reputation as a telecommunications industry leader.” He calls for public support of both the company and its current and former employees.

Unfortunately, he is vague about what he means by “public support.” How many billions of dollars would it take to pay off all of Nortel’s creditors and fill up its pension plan? There is a good chance that the reason public officials at all levels have been silent on this issue is because the dollar amounts are simply too large.

If public money were used to save Nortel in some form, I’m not sure what management should be put in place. It’s doubtful that public officials could handle the task, and existing management at Nortel for the past 11 years have managed to lose over 40 billion dollars!

I share Ferchat’s desire to save Nortel, but costs matter. It may be that he has some good ideas for how to go about saving Nortel. If so, I’d like to hear them.


  1. If Nortel got bailed out, I'd be shocked. This isn't a company that is a victim of the current economic situation, they shot themselves in the foot, then then arm, then the head about a dozen times over the years. Sorry, but it deserves to fail, and those who were in charge during its downfall deserve to be blamed. I stopped feeling warm and fuzzy about the history of that company and its place in Canada years ago.

  2. As a former NT employee I agree with Astin...let it fail. We are going through a period of "Economic Darwinism", where the dinosaur companies that are not able to adapt, made bad business decisions, emptied its coffers through fraudulent financials, run by inept, incompetent management, must be allowed to fail despite the hurt it will cause. This is the only way to purge the system of marginal companies such as this one and make way for innovative new enterprise.