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Interview with Philippe Morin - Nortel President of MEN

By Bo Gowan September 18, 2008 1:30 pm EDT

Philippe Morin Philippe Morin, Nortel President of Metro Ethernet NetworksPhilippe Morin is the president of Nortel’s Metro Ethernet Networks (MEN) business.  With yesterday’s announcement on the intent to find a buyer for Nortel’s Metro Ethernet Networks (MEN) business, his insight and opinions obviously became of increased interest to those following Nortel.

Yesterday, Philippe talked to Phil Harvey of Light Reading, the leading industry pub for coverage of the optical market.  You can read the entire Q&A with Light Reading on their website here.  Below are a few excerpts of various questions and answers from the interview.

Light Reading: Why is Nortel selling its Metro Ethernet Networks group?

Philippe Morin: The reason we’re doing this is that we believe it’s one of the most valued assets… It will help the balance sheet for Nortel but, at the same time, also help us to make some further investments around enterprise, around applications, and other areas around the core strategy direction that Nortel is focusing on.

For the MEN, it’s actually a great opportunity to look at how we can start to consolidate that industry by working with future buyers. We’re going to be looking at how we grow and how we provide more scale into an industry that, in my mind, needs to be consolidated.

LR: Did this come as a surprise — that your business would someday no longer be a part of Nortel?

Morin: We’ve been part of the decision process… [We looked] at where Nortel is going and all these things we’re trying to do across the corporation — looking at enterprise, unified communications, application services, carrier Ethernet, optical and 40-gig. With the state of the economy right now we need to make some focused decisions.

I absolutely support the decision, and I think this is both good for Nortel and MEN because I think… from a business point of view, we will have a chance to grow this business and start a consolidation, and at the same time provide some focus to Nortel around the places they want to invest.

LR: Is there a company you would not sell to?

Morin: No, I think with this announcement today we’re opening up to potential bidders, and the criteria are pretty simple: Which one provides the most value to Nortel in terms of cash and impact to the balance sheet; and, to MEN, which one offers the most growth potential?

LR: What does it mean for your career? Do you go to the buyer or are you staying at Nortel?

Morin: I’m going with the buyer. I’ve been in Nortel for 20 years, but all around the optical business, so it’s close to my heart to make sure we find the right buyer and the right partner and make this a success.

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Again, these are only a few of the questions, for the full interview go to the article on Light Reading’s site.

Categories: Corporate / Executives, Industry News, Nortel News, Optical/MEN
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Comments

  1. i guess you have decided on blocking the previous comments; a little too much truth in there i take!

    September 18th, 2008 at 1:48 pm by nishit Mehta

  2. Mehta - you’re an approved commenter…anything you post goes directly online. I haven’t deleted any of them that I know of.

    Of course your comments are at the bottom of different posts, have you looked there? This is a new post…

    September 18th, 2008 at 2:25 pm by Bo Gowan

  3. Let’s be honest for one time.
    As Morin says, he is going with the buyer, Nortel balance sheet is improved, deal done, everything decided and settled.
    The buyer(s) has been found , it is only a matter of the highest bidder. This is what is being negotiated.

    I bet it is matter of weeks before the buyer is announced.

    MEN is sold because it is the most valued assets as Morin says. Very good strategy folks…
    Sell also your Carrier VoIP and let’s rely for next year revenues on BCMs and SMB products.

    Farewell Nortel..

    September 19th, 2008 at 10:38 am by Dacapo

  4. At the end of 2007, deferred tax assets were $6.7 billion
    dollars. Is there any way to capture that value as it has
    become quite clear that Nortel will be unable to utilize
    this asset? If Nortel were to be acquired, would this
    deferred tax asset transfer to the buyer?

    September 19th, 2008 at 7:25 pm by alan

  5. @alan - Yes, the deferred tax asset is transferable, but there are conditions to utilizing the asset that could restrict its value to some companies. Also, Nortel can still use those tax assets.

    September 22nd, 2008 at 11:21 am by Bo Gowan

  6. Is there any way of structuring the MEN deal where some
    of these deferred tax assets go to the buyer? If so,
    Nortel may finally get enough money to pay down a
    significant amount of debt as well as pay for the enormous
    restructuring which is necessary. If not, NT should merge
    with a larger company which can use these tax credits.

    September 22nd, 2008 at 12:31 pm by alan

  7. Bo- any thoughts on the dreadful article in the ottawa paper over the weekend? Made it sound like everyone is sitting around doing nothing

    September 22nd, 2008 at 12:31 pm by bay

  8. @bay - just read the article - here’s my two cents. It would be naive to think that last week’s news didn’t have an impact on employees. Employees identify with Nortel, and when Nortel misses expectations they feel it.

    However, I would completely disagree with anyone who suggests that Nortel employees are unproductive due to recent or past events. The employees I interact with (which is a broad group across corporate, marketing, and the product groups) are talented and extremely hard-working…and I think if you ask enough people in-the-know you’ll get a sense that Nortel’s employees have a great reputation.

    Did a lot of work get done last Wednesday? Probably not…we are all absorbing the news (like you), listening to execs, and figuring out what it all means. But we have a very resilient employee base. They’ve handled this before, and will this time too.

    I think one thing you can count on is the dedication and determination of the Nortel employee base.

    September 22nd, 2008 at 8:30 pm by Bo Gowan

  9. thanks for your response.

    September 23rd, 2008 at 9:01 am by bay

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