What’s so amazing to me is how private sector left and right is being nationalized and people just don’t equate this to socialism. The U.S. Government has become so power hungry that the politicians we elected to represent us have become corrupt and forgotten who their real master is.
There is nobody to blame but elected officials for the mess that we are currently going through, from Democrats who held control of the house to Republicans who were in the Whitehouse to the newly elected president Barack Hussain Obama, that despite the fact that the government has failed miserably is on a path to massively grow the broken system.
The century-old company, North America’s biggest maker of phone gear and worth about $250 billion at its peak in 2000, fell victim to reduced spending by customers such as Verizon Communications Inc. and competition from Cisco Systems Inc. The company made the filing a day before a $107 million interest payment was due and was granted protection in Ontario Superior Court today.
Chief Executive Officer Mike Zafirovski came to the company in 2005 tasked with turning around a business weighed down by a $3.2 billion accounting fraud and ensuing customer losses. Instead, Nortel has lost almost $7 billion since he took over as the company’s competitive position deteriorated further.
“Nortel must be put on a sound financial footing once and for all,” said Zafirovski, who insisted the company will continue to meet the needs of its existing customers.
The future survival of Nortel, however, is far from certain. Companies that exit the bankruptcy process often emerge in smaller form and are frequently acquired in part or whole by larger suitors looking for a good deal.“Nortel still has valuable assets,” said analyst Ronald Gruia of the market-research firm Frost & Sullivan. “They are probably going to wait until they have their house in order before they do a disposal.”Even if the company remains independent, Nortel is unlikely to recapture any semblance of its glory days. The networking industry, jolted earlier this decade by the rise of low-cost Asian vendors, is intensely competitive. What’s more, the phone industry has undergone massive consolidation, giving the few remaining carriers greater leverage over their suppliers.
In April 2007, when Circuit City’s stock was at almost $20 per share, the AP attributed Circuit City’s struggles to “Customer Service.”
Earlier this year in April, Blockbuster offered to buy out Circuit City for $1 billion or $6 to $8 a share. Big mistake in hindsight when the stock is trading today at $0.30.
In June 2006, Philip J. Schoonover joined Circuit City as Chairman of the Board of Circuit City Stores, Inc., single-handedly bringing down the company stock by 99% – over the past 108 weeks, resigning September, 22, 2008.
Although Best Buy will benefit from this, they better learn from Circuit City’s lack of customer service and avoid at all costs incidents like this one, where a customer after buying an article online and going to the store to pick it up, was faced with what can only be viewed an poor customer service and now a PR nightmare for Best Buy.
Peter Schiff predicted the financial recession two years ago.
Peter Schiff’s take on the BailOut Bill.
This book just jumped to the top of my reading list. (Crash Proof: How to Profit From the Coming Economic Collapse)
It has seen its biggest declines since 1980 according to Jonathan Ratner article “Nortel faces tough timing as peers struggling too”.
“With softening demand and increased competition, Nortel may need to once again retool and refocus as it looks to find its position in a consolidating industry,” RBC Capital Markets analyst Mark Sue told clients.
After spending three days with the folks at ATT at the 2008 FOCUS Users Group, I got Nortel’s marketing spill which was all centered about going Green.
I am all for minizing energy use and saving resources, but something is seriously wrong when thirty minutes into the conversation all I am getting as a potential client is not how good the product is, not how much better it is than its competitors offering, not the features and how they’ll make all the issues I deal with on a daily basis go away but rather how much I will save on my electricity bill.
Nortel needs to go back to the drawing board, focus on the basics, be better than everybody else and then market it.
Amongst the several blogs I read frequently is the Mark Cuban Blog, and a few days ago I noticed that it went down for maintenance. Now he probably has people on his staff that maintain, upgrade, etc his blog, but after seeing feed disappear, content which at first sight seemed not in chronological order and noting that he was at the TechCrunch50 conference in San Francisco, I suspected something was wrong. Taking a closer look I felt really dumb as I noticed that he was just replaying some old posts
Very interesting read and now to amazon to get some books.