Even as Nortel completed the first stage of plants and assets to Flextronics, its CEO was telling an investment conference in Arizona that expansion could be looming for operations in China.
“In these joint ventures and in our pure Nortel employees in China we have over 3,500 people there. But that’s just the beginning, and stay tuned,” William Owens said at an event put on by Morgan Stanley, according to Reuters.
“Nortel will compete in that marketplace and we think we know how to do that, and you’ll see a number of things as we go forward related to those kinds of initiatives,” he added.
Nortel has already laid off more than 3,000 workers and shuttered some office space under cutbacks instituted by Owens, Reuters noted.
Owens also reiterated that Nortel plans to issue reviewed financial statements by the middle of the month.
On Friday, Nortel announced it had received another waiver from a Canadian government backed loan guarantee as the company continued to review financial statements.
On Monday, Nortel and Flextronics said the first stage of a deal under which manufacturing plants in four countries would be transferred to Flextronics were complete. This stage include factories in Ottawa and Northern Ireland. Factories in France and Brazil will be transferred later.
Nortel estimates the plant transfers and the 2,500 employees will save the company $500 million over several years while generating revenues up to $700 million.
“This is a milestone for both companies as we take our growing relationship to a new level,” said Sue Spradley, president of Global Operations for Nortel, in a statement. “With Flextronics now focusing on product cost reduction and fast-tracking the development of new features related to our well-established optical products, Nortel Networks will be better positioned to concentrate on next-generation optical architectures, products and solutions – areas where we believe we can gain the most competitive advantage.”
Nortel: www.Nortel.com
