Nortel News: John Roese's Legacy, A Way Out?

John Roese's Legacy?

The Globe& Mail has an interesting article looking at the departure of Nortel (NT) chief technology officer John Roese, who was let go earlier this week along with three other senior executives.

What’s been interesting is that over the past two years, Roese has probably been the executive under the most scrutiny and fire - more so than CEO Mike Zafirovski, who was supposed to establish a new vision for Nortel; more so than Joel Hackney, who was promoted after an ugly assault incident during a parking lot dispute; more so than George Riedl, an M&A specialist who was lured away from Juniper but who has only made a few minor deals.

It may have had to do with the fact Roese was front and centre. He seemed to like the spotlight, happily talked to the media, and was a fairly keen blogger. While it was good for Roese to be out there, it also put him in the crosshairs for people unhappy about Nortel’s strategic direction.

When Roese was hired in 2006, it was seen as a strange move because he wasn’t promoted from within Nortel, and he wasn’t a pure telecom person. As well, he came to Nortel after a very short stint with Broadcom Corp., following a long career at Enterasys.

In the press release issued by Nortel, Roese was described as a

respected industry visionary and recognized authority on network convergence and emerging technologies, will be responsible for the Company’s overall R&D strategy and execution, directing future research across all product portfolios. In addition, he will work closely with the Chief Strategy Officer on emerging technologies, market opportunities and strategic partnerships.

Roese’s biggest challenge over the past two years may have been that Nortel is still focused on a variety of markets and products, and it still doesn’t seem to be completely strategically committed. Case in point is the metro Ethernet network business, which Nortel is trying to dump even though it appears to be the crown jewel.

It may have been that Roese didn’t stand much of a chance of being successful given the cards he was dealt. However you want to assess his performance as Nortel’s CTO, Roese is a good guy with lots of experience and he’ll hopefully land in a new position where he can do well.

For more, check out the Wall St. Journal’s blog, which looked at the four Nortel executives who were let go. Roese also wrote a final blog post.

A Way Out?

Nortel is now trading at 67 cents - 6.7 cents when taking into account 10:1 stock consolidation.

Nortel can now be yours for $337.5-million, not including $4-billion of debt; $2.3-billion of cash and a $1.2-billion pension fund deficit.

More: CNet’s Jon Oltsik has an interesting article asking if there is a way out for Nortel. Among his suggestions:

1. Sell the Metro Optical Equipment and services groups to IBM.

2. Lean on Microsoft (MSFT) to broker a deal for Unified Communications.

3. Sell core Ethernet switching and routing products to H-P (HPQ).

4. Get out of the network security business.

Comments

[TCLV:]

Legacy?

12,000 engineers and zero innovation nets him $2M in severance...nice legacy. Lather, rinse and repeat 4 times for the other great Senior Executive hires now going out the door...

2008 Nov 13 10:20 AM

[Red Green:]

The smartest and best executive Nortel ever had was Des Hudson. Find him and bring him back. The morons since John Roth (and including him) have ruined the company and done nothing except line their pockets and live well at Nortel's expense. Time to go back to common sense approaches to the business and get rid of the "strategic" thinkers and those who talk about "paradigm shifts" and "thinking outside the box."

2008 Nov 13 10:48 AM