Last week, Nortel announced that it was seeking bankruptcy protection in North America, with Ernst & Young appointed administrators for its Europe, Middle East, and Africa (EMEA) operations. BBC News reported fears about this situation, with Nortel employing 550 at Monkstown, Newtownabbey, and 300 at Galway. Nortel employs 2,000 in Britain, and 30,000 overall.The News Letter quotes Nortel President and Chief Executive Officer, Mike Zafirovski, who said that the company must reach a sound financial footing “once and for all”.
“These actions are imperative so that Nortel can build on its core strengths and become the highly focused and financially sound leader in the communications industry that its people, technology and customer relationships show it ought to be.”
Yet industry analysts are doubtful whether Nortel will be able to avoid being broken up. While Nortel has $2.4 billion in the bank, it is believed that Nortel sought bankruptcy protection now in an attempt to avoid desperation later.The threat/opportunity may come from competitors, such as Huawei Technologies, which The Economist speculates could come in to buy what’s on offer. “Huawei Technologies … has been looking to boost its presence in North America for some time.” Keeping in mind that there are an additional 3,000 EMEA staff located in Austria, Belgium, Czech Republic, Finland, France, Germany, Hungary, Ireland, Italy, Netherlands, Poland, Portugal, Romania, Slovenia, Spain, and Sweden, it begs the question of the fate of its Northern Ireland staff.