A shirt-sleeved Mike Zafirovski gave a rousing speech to shareholders of Nortel Networks Corp. Thursday, vowing to put the telecom giant back on track.

Nortel "will be a great company again," the chief executive told the company's annual meeting, as he promised "a relentless pursuit of superior results and doing the right thing."

Mike Zafirovski promised to turn Nortel around at the company's annual meeting.
(Canadian Press)

But the 400 shareholders at the meeting have heard it all before. The share price rose by eight cents to $2.52 by the close, on a volume of 14.7 million shares.

The annual meeting lasted three hours, but it was a quiet one, a far cry from the noisy 6.5-hour marathon a year ago when angry investors criticized the company's previous management and board.

Zafirovski, the former Motorola executive who was hired as chief executive last November to pull Nortel out of the trough, said he was committed to a business transformation, integrity renewal and "growth opportunities with moderate investment."

Zafirovski is "not interested in selling or merging Nortel with somebody else," he said, adding "we may have to do that at some point in time if we are not successful. But a merger with somebody else from a position of weakness I don't believe is what you want to do with a great global Canadian icon."

Nortel is acting aggressively to reduce costs, he said, adding his goal was to cut $500 million from the annual $3-billion budget.

The company also wants to improve the effectiveness of its research and development spending.

"It's clear we're not getting our money's worth," Zafirovski said.

The latest round of cuts has already started. Nortel announced heavy job cuts this week and reorganized a pension fund that Zafirovski said was "among the richest in the world."

The pension fund also has a $2.5-billion liability.

The pension changes will save an estimated $100 million US a year while the job cuts will reduce costs by $100 million in 2007 and $175 million in 2008.