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Judge approves Nortel's plan to pay up to $22M to 'key' employees. Madness?

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“They are out of their mind.” – Nortel retiree about management

“Madness. Madness.” – Maj. Clipton, “Bridge on the River Kwai”

RESEARCH TRIANGLE PARK, N.C. — A bankruptcy court in New Jersey on Thursday approved Nortel’s request to pay up to $22 million in retention bonuses to key employees, Bloomberg reports.

“It is a very stirred-up work force,” John Dempsey, a Nortel payroll consultant, told the court, according to Bloomberg. “There is a need to send a strong message that we need them and we want them.”

Say what? I sure hope my next-door neighbor, whom I won’t identify, is one of those key folks. Every day, I wonder if my neighbor will keep his job at Nortel. Amidst the meltdown taking place at that troubled company I also wonder how he keeps his sanity.

Jerry Aiken, a 27-year Nortel veteran, now retired, has a more concise view of what’s happening in the management suite: “They are out of their mind,” he told me Thursday.

His reference point? Nortel’s plan to pay up to $45 million in retention bonuses to so-called key executives and key employees.

With Nortel stock trading for a dime, losses in the billions and cash burning, Aiken points out that existing management helped create the mess. Who should be retained?

Asked Aiken rhetorically: “This leadership team is a major factor for the mess that NT is in, and now they want retention bonuses to ensure key players don’t leave?”

Aiken stepped forward to talk about Nortel retirees’ plans to seek legal representation at the bankruptcy proceedings. These folks are worried about pensions, of course. But they also are angry about how the company is treating recently laid-off personnel. Terminating severance was OK’d by the courts, so those who thought they had at least some kind of cushion now have nothing. And what about the 3,200 people Nortel plans to cut in the next wave of reductions?

Nortel is trying to save itself. It needs to keep in place key scientists, engineers, researchers, sales people and management to have a chance to survive, so to some extent the incentive plan is understandable. But who picks the key people – and who are they? (The prospective recipients’ names are apparently protected by court order.)

As the Nortel saga continues, I couldn’t help but think of the fine actor James Donald, who as the character Maj. Clipton uttered an immortal one-word line – twice – to end the classic “Bridge on the River Kwai”:

“Madness! …. Madness!”

The Skinny

WRAL Local Tech Wire Publisher and Editor Rick Smith dishes out tidbits from the local technology sector. Read more articles…