Nortel’s new chief a ‘natural fit’, says analyst

With the announcement of a new person at the helm of Brampton, Ont.-based Nortel Networks Corp., analysts believe the company is shifting gears and moving forward to strengthen its hold in the increasingly converging IT and telecom markets.

The departure of Nortel president and CEO Bill Owens may be less of an indication of his leadership strength, but more of a signal that Nortel is now “focused on growth and revenue, and leveraging technology,” according to Roberta Fox, senior partner, Markham, Ont.-based Fox Group Consulting.

“From our analysis, we’ve interpreted that Owens’s role was to get (Nortel) through the financial difficulties, as a strong, military-type leader – just to get them focused on getting past the financials,” Fox said.

Mike Zafirovski, former president and chief operating officer of mobile technology company Motorola Inc. will replace Owens on November 15th. Prior to joining Motorola, Zafirovski was an executive at General Electric Company.

Nortel chairman Harry Pearce described Zafirovski as “the right leader to build on the important work of Bill Owens – and take Nortel to the next level.”

Fox said the new Nortel leader will bring to the company his strong technology background, “which is where, I think, Nortel needs to really focus now, moving forward with their technology, leveraging their technology and their track record.”

Pearce also acknowledged Owens’s contribution to the company. “At a moment of great challenge and enormous need in the history of this company, the board turned to one of its own, whose long career embodied the highest levels of trust, integrity and distinguished leadership. We needed an experienced, steady hand and Bill delivered.”

A former vice-chairman of the US government’s Joint Chiefs of Staff, Owens assumed the top post at Nortel in 2004, and industry observers believe he was appointed specifically to get the company’s financial standing in order.

Owens’s eventual replacement has been forthcoming, according to George Goodall, research analyst at London, Ont.-based Info-Tech Research Group. He said Owens was specifically hired “to clean up the financial mess.”

“(Owens’s role was) to put the company back on decent financial footing and to really clean up the reputation of the company, as well – go through that painful process of auditing, which they seem to be through now,” said Goodall.

Zafirovski has always been eyed as a “natural successor” to Owens – following his departure from Motorola this year – being instrumental in regaining Motorola’s strength in the consumer handheld space.

“I think it’s a great move for Nortel. If you look at what Nortel is doing now and the strength of what they are doing in the CDMA (code-division multiple access) space, and where their revenue strengths are in that space, it’s a pretty natural fit to me,” he said.

In a statement, Owens welcomed Zafirovski as a successor, describing his entry as “a most important step” toward achieving Nortel’s “play to win” in the market.

“His proven track record in the global telecom sector and the business world will serve this company, our shareholders and our customers extremely well. I’m proud to have him take the helm,” said Owens.

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