Ottawa

Nortel crippled by ongoing sell-off: prof

Nortel's ability to operate is being whittled away as it sells off its assets piece by piece, even if the effects are not fully obvious yet, a Canadian business researcher says.

Nortel's ability to operate is being whittled away as it sells off its assets piece by piece, even if the effects are not fully obvious yet, a Canadian business researcher says.

"At a certain point of time, it's just going to run out of adaptability," said Doug Reid, a professor at Queen's University's School of Business, in Kingston, Ont.

Since Nortel filed for bankruptcy protection in January and started selling off its various units, employees have been flooding out of the company. Some have been laid off to make the company's various business units more attractive to potential buyers, while others have quit to take new jobs at other companies with better future prospects.

In addition, four of the company's top executives, including Ottawa-based chief technology officer John Roese, left the company on Jan. 1. In August, the company lost its public relations manager in Ottawa, and since then it has been hard to reach the company, which did not respond to a recent request for information.

Nevertheless, employees and company officials have told CBC News that almost 10 months later, contracts are being filled, work is still getting done, and some workers are still getting bonuses.

Despite that, Reid said a lot of the infrastructure that keeps the company humming is being eroded by the mass exodus of personnel.

"The more they go out, the more and more the people who are left have to apply for want of a better term Band-Aid solutions," he said.

He added that currently the company can't embark on anything new and can't make bold decisions.

But Vijay Jog, a professor who teaches at Carleton's Sprott School of Business, in Ottawa, suggested that a company like Nortel doesn't need that much support to keep operating.

"Most of time you're on auto-pilot," he said. "As long as you pay them every month, people do what they're supposed to do. The senior management has to be only involved in trying to sell the firm."

Reid said in most cases, large companies do have enough inertia to keep operating without much leadership, but since Nortel is in wind-up mode, things are a little different.

"The focus is on asset preservation and frankly, if you're one of the people still working there, getting off the ship before it goes down."

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