Friday, June 10, 2005

President and Chief Operating Officer of Nortel Resigns

Enclosed is an article from about some management devleopments over at Nortel.

President and Chief Operating Officer of Nortel Resigns
Published: June 10, 2005
Filed at 10:02 a.m. ET
NEW YORK (AP) -- Nortel Networks Corp., the Canadian telecommunications-equipment company trying to recover from an accounting scandal, on Friday said its president and chief operating officer resigned after less than three months on the job due to differences with the company's chief executive.

After the news, shares of Nortel fell 23 cents, or 8.2 percent, to $2.58 in morning trading on the New York Stock Exchange.

Chief Executive Bill Owens, who is also the company's vice chairman, will assume the duties of Gary Daichendt, the outgoing president and COO.

''It has become apparent to Gary and me ... that we have divergent management styles and our business views differ,'' Owens said in a prepared statement. ''I respect him for his decision and I wish him every success in his future endeavors,'' Daichendt, formerly Cisco Systems Inc.'s executive vice president of worldwide operations, took over as president and chief operating officer on March 14.

The company also said Friday that Chief Technology Officer Gary Kunis, who joined Nortel after Daichendt's appointment, will also be leaving the company. Kunis had previously worked with Daichendt at Cisco.

On June 1, Nortel posted a first-quarter loss of $49 million, hurt by $21 million in charges from restructuring activities. But the company said that quarterly report marked a ''turning point'' because it had caught up with financial reporting requirements after restating results dating back to 2001.

In January, in a long-delayed report to clean up a multiyear accounting scandal, Nortel slashed its audited profit for 2003 by 40 percent to $434 million while reporting that a dozen senior executives would repay $8.6 million in bonuses and five board members would resign.

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