“Telecom gear maker Nortel’s (NT) downward spiral continues: The company filed for Chapter 11 bankruptcy protection in Delaware today. Nortel owes companies more than $3.8 billion, according to court filings, the WSJ notes.
What happened to Nortel? The company hired former Motorola exec Mike Zafirovski more than three years ago to turn things around after a huge accounting and management mess.
But since then, Nortel has fumbled, focusing at different times on wireless equipment, large-scale ethernet buildouts, office phones — including a high profile partnership with Microsoft (MSFT) that seems to have led nowhere, etc.
More recently, Nortel’s telecom carrier customers have cut spending as the economy has soured. And asset sales haven’t worked out as planned.”
Check out the whole article from Yahoo Finance here.
We all saw this coming, Nortel’s stock price has been plummeting over the last 2 years and they are a dinosaur in the telecom world that has failed to innovate and provide 21st century products. We even commented on Nortel’s problems and their shaky alliance with Microsoft back in March on this posting.
Unfortunately, this is a trend for many of the telecom giants from the 80’s and 90’s. The current economic conditions may hasten this process for many companies already walking the financial tightrope.