RESEARCH TRIANGLE PARK, N.C. – Mike Zafirvoski’s disclosed plans to jump from the SOS or SS (as in sinking ship) Nortel helped set off a huge explosion in Canada on Monday. Nortel truly is sunk now.
Not only did most of Nortel’s board resign immediately, but so did the chief executive officer who also had a seat in the board room. (Jim Hunt, four-term governor of North Carolina quit the board; he declined comment when contacted by Local Tech Wire and WRAL.)
As for Captain Z’s departure, which was immediate, Nortel proclaimed he didn’t receive any severance – something denied to other Nortel workers thrown overboard in the bankruptcy process.
"He received no severance. He will become a creditor like everyone else," Samih Elhage, the top Nortel executive in Ottawa and head of Nortel’s carrier voice-applications division, told a Canadian news service.
The explosion’s blast damage included a decision to not even name an interim CEO but the new board’s plan to seek additional help from Ernst &Young, its advisor in the bankruptcy process since January.
Imagine how Nortel’s 1,800 employees in RTP must be feeling right now.
The coupe de grace for Nortel came quickly after Zafirovski disclosed plans in an interview on Saturday that he didn’t intend to run a “residual” Nortel and that he was job shopping.
On Monday, as Nortel announced quarterly financials it also disclosed the sweeping out of the boardroom.
The shakeup clearly surprised analysts and Canadian media.
“While Zafirovski’s departure was expected, some observers are nevertheless questioning the timing of his resignation, given that Ottawa is under mounting pressure to kill the Ericsson deal by using its powers under the Investment Canada Act,” the Star in Toronto reported.
Ericsson won a bidding contest for Nortel’s key wireless assets, but the decision is being challenged.
Why now?
"If you’re going to be paid all this money, you’d think that you would be the housekeeper until the house is sold," Richard Powers, the associate dean of the University of Toronto’s Rotman School of Management, told The Star.
Pavi Binning, chief restructuring and financial officer, is now captaining Nortel – what’s left of it.
We’ve reached a logical departure point," said Harry Pearce, the chairman of Nortel’s board, in a statement. "Mike made a commitment to see the process through the stabilization of the company, sale of its largest assets and the right plans and people to continue operating our business and serving customers. He has done so. I appreciate the commitment and passion he brought to this company since day one, including his guidance through the extremely difficult decisions we faced since filing for creditor protection. I also wish to recognize the enormous commitment and dedication of the departing members of the Board who really believed in and worked hard for Nortel."
"Mike came to Nortel to transform this company. 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."
Pearce left the board. he was among those who recruited Captain Z.
