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Nortel: Going Once, Twice...

Several weeks ago I had the pleasure to attend a friends wedding that was NORTELish by way of the guest list. At the reception, we sat next to a Nortel senior person full of life and direct and from the heart answers when I asked candid questions about Nortel. Everything I heard then rang true in the weeks ahead. So what about Nortel?The Canadian government has little if any time left to intervene and as my buddy Eric tells me quite often about other issues--"it's political." Then did the Canadian government place their bailout funds in the wrong vehicle? There are tensions of trade and flows of trade between the USA and Canada namely over protectionism on both sides. Disheartening is the beating that the Nortel pensioners and investors will take along with the remaining employees and Nortel is axing more of them as this is written.

Everyone, especially the Canadian government and their friends in the south, needs to address not one but two critical questions. First, is Nortel Enterprise worth saving? Second, what is the right thing to do?

What stands in my mind is that Nortel, a once world class company that made and delivered great products, doesn't have or seem to have a champion in Parliament. It's not that there are millions of customers saying, "give Nortel up because they can't manufacture good products that we want." Unlike businesses in the south where folks are irate over the US government bailing out auto manufacturers that don't give customers what they want and haven't for years, there's a huge disparity in thinking here. Then for the past two quarters those loyal Nortelers kept purchasing from Nortel in spite of Nortel's position that gave Nortel positive cash flows and increased sales. I'm not saying there's enough to fill the deep pit that Nortel's in but it's a stark contrast to the auto industry. Nortel customers are a rare and loyal breed as is the legacy of Nortel.

These three companies are distinctly and markedly different as are their customer bases. Candidly speaking I've got to ask, who's kidding who about this purchase? Any money that happens to change hands, if it does, isn't for the continuation of Nortel or Nortel products. This is an asset fire sale reaping pennies on a greatly devalued dollar that results in more joblessness. Killing the competition is the objective and this is what the Canadians can thank their government for doing by doing nothing.