Nortel exec issues promise to detail its reorganization

By , Network World |  Business, bankruptcy, Nortel

Nortel plans to deliver more details within a few weeks about how it plans to get out of bankruptcy, a company official says, which may help placate suppliers nervous about the lack of specifics.

The company's bankruptcy protection has been extended from last Friday until May 1, and sometime before then the company will define its new structure and focus, Bruce Gustafson, Nortel's vice president for strategic carrier marketing says in a Reuters report.

After its bankruptcy filing last month, Nortel had said it will get rid of an additional 30,000 jobs, but hasn't specified which ones. And it is backing away from selling its metro Ethernet division, something that has been a cornerstone of its overall plan to streamline the company since last year, possibly because it can't find a buyer.

This type of uncertainty and the extended deadline has its suppliers worried that it will sit on components already delivered -- neither using them nor returning them -- until it determines its long-term plans. That prevents the suppliers from getting paid or selling the returned items to someone else.

JDS Uniphase and Andrew LLC, both suppliers of Nortel components, say in filings with the bankruptcy court that their interests aren't being met, according to a published report on RedDeerAdvocate.com. The main complaint is lack of information from Nortel that is relevant to the suppliers making business decisions pertaining to the company.

Nortel said in a statement: "Efforts are taking place across Nortel to establish a sound and fair operating cadence with suppliers."

Since its bankruptcy filing, Nortel has taken steps to cut expenses by selling off real estate and corporate jets. It has also ditched a deal to resell WiMAX technology, but is skipping to the next generation wireless technology, Long Term Evolution (LTE). The company is attending the Mobile World Congress show in Barcelona demonstrating the technology.

The company claims it has signed up new customers since its filing.

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