Nortel

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Nortel Networks Corporation
Type Public Limited Multinational
Founded 1895 (as Northern Electric and Manufacturing)
Headquarters Brantford, Ontario,Canada
Products Telecommunications equipment
Revenue ▲$10.95 billion USD (2007)
Employees 32,550 (February 2008)
Website www.nortel.com

The Nortel Networks Corporation is a Canadian multinational company formerly known as Northern Telecom Limited, specializing in the manufacture and distribution of telecommunications equipment. Its reported revenue in 2007 was 10.95 billion (U.S. dollars), and as of February 2008 employed over 32,000 people.[1]

Company History

Nortel's history can be subdivided into three main eras[1]:

The Early Years

Most notable highlights include:

  • 1900's:

Northern Electric manufactures the first gramophones in Canada

  • 1914:

Design and patent of the portable commutator, a one wire telegraphic instrument serving military purposes during World War 1.

  • 1920's:

Manufactures first dial equipment in Canada (a dial PBX) for a brewery in Montreal.

Manufactures first vacuum tubes in Canada, eventually used on some apparatus for long-distance lines.

  • 1940's:

Designs a wireless instrument for two-way telephone communications in tanks and various other military vehicles.

  • 1950's:

Develops the electromechanical switch which allows push-button phone dials and direct inter-city dialing.


The Telephone Years

  • 1950's:

Northern develops satellite and antenna equipment.

  • 1960's:

Launches the Contempra or "Princess" telephone with the dial-pad in the handset, one of the first designs of its kind in the world.

  • 1970's:

Introduces world's first X.25 data switch, representing the first commercial application of packet switching, the technology that is the foundation of today's Internet.

  • 1980's:

Nortel designs the first cellular telephone system in North America to provide subscribers with features such as call forwarding, call waiting and three-way calling.

  • 1990's:

Introduces Fiber World initiative for systems based on fiber-optic technology; much faster and effective than copper wires.


The Internet Years

  • 1990's

In 1995, the original Northern Electric and Manufacturing brand-name is changed to "Nortel".

Introduces the world's first internet modem for "always on" Internet connections.

  • 2000's:

Develops networking speeds of up to 6.4 trillion bits per second through terabit optical technology.

Installs world's first commercial 3G (UMTS) wireless network in Spain.

Microsoft and Nortel announce a strategic alliance that seeks to "accelerate the availability of unified communications"[2]


Historical Financial Information[2]

(All information is presented in USD, unless indicated otherwise).

2007 2006 2005
Revenue (millions of USD) 10,948 11,418 10,509
Gross margin percent 42.1% 38.9 40.7
Net earnings (loss) from continuing operations 957 19 2,611
Total assets 17,068 18,979 18,135


Business Strategy

Political and Public Influence

Political Contributions

Lobbying

In the year 2008 The Nortel Networks Corporation's total lobbying expenditures were estimated at $480,000 USD, and in 2007 at 562,000 USD. [3]

Issues lobbied include Taxes, Trade, Homeland Security, Telecommunications, Copyright, Patent & Trademark, and Homeland Security.

Corporate Accountability

Labor

Human Rights

"Canada: Nortel Helps Build China's Surveillance Technology"[4]

October, 2001

The Nortel Networks Corporation finds itself at the center of controversy as it is being accused by various human rights activists and organizations (including The International Centre of Human Rights & Democratic Development (ICHRDD)) of contributing to human rights violations in China by aiding the local government enhance its surveillance technologies.

The report, in which these accusations are found,"China's Golden Shield: Corporations and the Development of Surveillance Technology in the People's Republic of China" describes how "technology developed for commercial purposes by transnational corporations, including Nortel, is being used by Chinese police and security forces to refine the targetting and repression of political dissidents. It also provides an overview of Nortel's long-standing involvement in the development of surveillance technology both at home and abroad."[5]

List of Nortel projects singled out in the report and other documents

For a copy of the report, the ICHRDD must be contacted directly

Environment

Consumer Protection and Product Safety

Anti-Trust and Tax Practices

"Four Former Nortel Executives Charged With Accounting Fraud"[6]

September, 2007

The U.S. Securities and Exchange Commission has filed civil fraud charges against four former Nortel Executives: Douglas Hamilton, Craig Johnson, James Kinney and Kenneth Taylor, the former vice presidents of finance in Nortel's optical, wireline, wireless and enterprise business units.

The commission alleges that from the second half of 2002 through January 2003, Hamilton, Johnson, Kinney and Taylor "all determined that their business units held tens of millions of dollars in excess reserves."

"The four finance vice presidents did not immediately release those excess reserves as required under U.S. Generally Accepted Accounting Principles, but instead maintained them for earnings management purposes," the SEC said in its complaint Wednesday.

The regulator said the former executives set aside $44 million in additional excess reserves to lower Nortel's consolidated earnings and bring them in line with internal and market expectations.

In March of that same year, the SEC filed civil fraud charges against ex-CEO Frank Dunn and other executives, including former Chief Financial Officer Douglas Beatty and former controller Michael Gollogly, accusing them of manipulating the company's financial reports to their own benefit.

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Social Responsibility Initiatives

Business Scope

Lines of Business and Major Products Paragraph Units/Subsidiaries


Customers Suppliers Creditors Competitors
Customer 1 Supplier 1 Creditor 1 Competitor 1
Customer 2 Supplier 2 Creditor 2 Competitor 2
Customer 3 Supplier 3 Creditor 3 Competitor 3
Customer 4 Supplier 4 Creditor 4 Competitor 4


Financial Information (as of DATE)[7],

(All information is presented in USD, unless indicated otherwise)

Quarter Ending March 08 Quarter Ending June 08 Quarter Ending September 08
Revenue (millions of USD) 2,758 2,622 2,319
Gross Profit ($ mil.) 1,146 1,130 908
Net earnings (loss, $mil) 138 113 3,413

Governance

BOARD OF DIRECTORS[8]

  • Harry Jonathan Pearce; Chairman of the Board
  • Jalynn H. Bennett, CM
  • Jalynn H. Bennett
  • Dr. Manfred Bischoff
  • James B. Hunt, Jr.
  • Kristina Johnson
  • John Alan MacNaughton
  • John P. Manley
  • Richard David McCormick
  • Claude Mongeau
  • Mike Zafirovski

OTHER EXECUTIVES[9]

  • Mike S. Zafirovski; President and Chief Executive Officer
  • Dennis Carey; Executive Vice President, Corporate Operations
  • Joe Flanagan; Senior Vice President, Global Operations
  • Steven Bandrowczak; Chief Information Officer
  • William J. Donovan; Senior Vice President, Business Transformation Office
  • George Riedel; Chief Strategy Officer
  • Bob Bartzokas; Chief Compliance Officer
  • David Drinkwater; Chief Legal Officer
  • John J. Roese; Chief Technology Officer
  • Pavi Binning; Executive Vice President and Chief Financial Officer
  • Lauren P. Flaherty; Chief Marketing Officer
  • William Nelson; Executive Vice-President, Global Sales
  • Richard Lowe; President, Carrier Networks
  • Chuck Saffell; Chief Executive Officer, Nortel Government Solutions
  • Dietmar Wendt; President, Global Services
  • Philippe Morin; President, Metro Ethernet Networks
  • Joel Hackney; President, Enterprise Solutions
  • Peter MacKinnon; Chairman and General Manager, LG-Nortel Co. Ltd
  • Alvio Barrios; President, Caribbean and Latin America
  • François Lançon; President, Asia Pacific
  • Michael Pangia; Senior Vice President, Global Sales Operations
  • Darryl Edwards; President, Europe, Middle East and Africa (EMEA)
  • Jackson Wu; President, Greater China

Contact Information

Nortel Networks Corporation

195 The West Mall

Toronto, Ontario

M9C 5K1

Canada

Telephone:

North America: 1-888-901-7286

International: 1-905-863-6049

Website: http://www.nortel.com/

Articles and Resources

Books on the Company

Related SourceWatch Articles

Sources

  1. Nortel,"Nortel's History: Timeline"Nortel Website, accesed December 2008
  2. Nortel,"Annual and Quarterly Financial Reports for the past twelve years", Nortel website, accesed December 2008
  3. OpenSecrets:Center for Responsive Politics, "Nortel Networks Anual Lobbying Expenditures years 1998-2008" OpenSecrets Website, Accesed December 2008.
  4. CorpWatch,"Canada: Nortel Helps Build China's Surveillance Technology" Media Release, October 2001.
  5. International Centre of Human Rights & Democratic Development,"Nortel Technology Threatens Human Rights in China", Media Release, October 22nd, 2001
  6. CorpWatch, "Four Former Nortel Executives Charged With Accounting Fraud", Media Release, September 2007.
  7. Nortel,"Nortel Networks Corporation 2008 quarterly financial reports" Nortel Website, Accesed December 2008
  8. Nortel, "Nortel Board of Directors", Nortel Website, accesed December 2008
  9. Nortel, "Executive Leadership", Nortel Website, accesed December 2008

External Resources

External Articles

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