Nortel Turns To Zafirovski As CEO

Nortel Networks last week named Mike Zafirovski as its new president and CEO, a move solution providers took as evidence that the telecommunications vendor is making progress rebounding from an accounting scandal.

That progress might not be as smooth as partners hope, however. Zafirovski’s former employer, Motorola, filed suit against him last week alleging a breach of noncompete agreements.

Zafirovski, former president and COO of Motorola, is scheduled to assume his new role at Nortel on Nov. 15, replacing Vice Chairman and CEO Bill Owens.

Owens, a Nortel board member since 2002 and former chairman of the U.S. Joint Chiefs of Staff, took on the CEO job in April 2004 and ushered in a series of reorganizations, executive changes and layoffs. He is credited with righting the Nortel ship following an accounting scandal that came to light under predecessor Frank Dunn.

Frank Porreca, president of Layer 227, a Nortel partner in Mississauga, Ontario, said Owens’ departure is part of Nortel’s recovery process. “He came in as the reliable general to get things back in order, and his job is done,” Porreca said.

Because Nortel’s product portfolio has remained strong, customers continue to buy its products, said Al Freeman, owner of New York-based Computron Technologies. “It’s about products and presentation, so that hasn’t been a problem,” Freeman said.

Zafirovski said he will work with Owens and top management during the transition and start planning how to “take the company to the next level.”

“First and most important, [is] to continue the financial transformation and integrity renewal of the company,” Zafirovski said during a conference call. He also said he will work to grow Nortel, define its strategic focus, improve profit margins and review the company’s internal processes and automation.

Zafirovski and Nortel, which is not a named defendant, are reviewing the Motorola lawsuit and plan to talk with Motorola in hopes of resolving the dispute.