With jets roaring overhead, some 600 shareholders of Nortel Networks Corp., many of them sporting white hair, plaid shirts and bare knees, straggle from the haze of an industrial park into the dim, cavernous Toronto Congress Centre. An expanse of chairs offers good sightlines of the bright blue stage and the four men sitting there: retiring chairman Red Wilson, corporate secretary Gordon Davies, chief executive Bill Owens, and new CFO Peter Currie. Lush music swells. “You stay the course, you hold the line, you keep it all together,” Sarah McLachan croons. “You're the one true thing I know I can believe in.”
On that, shareholders are reserving judgment. It is June 29, and this is the first such meeting Nortel has held in two years, after an accounting scandal in April 2004 threw into question four years of financial reporting and delayed current quarterly results. Shareholders spend much of the meeting at microphones berating the board, the auditors and the management for explanations. And some want justice. “When can the shareholders expect to see your previous executives charged, brought to trial and jailed?” one woman asks to thunderous applause.
After more than four years of relentless shocks, many shareholders want the past put to rest. They have come to hear what Owens has to say about Nortel's future. The 65-year-old, who became CEO 14 months earlier, is still an unknown quantity for many.
Owens steps to the front of the stage in a charcoal pinstripe suit, his hands clasped calmly before him, and delivers a carefully crafted address. His voice is a methodical drone. He comes across as sincere and folksy, if dull, as he details an array of new markets: government, security, managed services, wireless mesh networks, voice over cable, China, India, South Korea. The 20-minute speech is peppered with empty catchphrases, like “playing to win,” and his focus on “cash, cost and revenue.” Later, during questions, he describes Nortel as an “IT Internet company,” and says “there are no manufacturing noises anymore, anywhere in Nortel. This is a company of R&D, of software writers. This is a company of applications and solutions.”
At the meeting's four-hour mark, the audience thins out; a spread of sandwiches in the foyer provides refuge for those fleeing 11 shareholder proposals being debated (and ultimately defeated). “We just had to get out of there,” says Bernard Faubert, who drove in from Brampton, Ont., with his wife, Jacqui. But the Fauberts, shareholders for some 23 years, are impressed with Owens' forthright style. “He's not just deferring all the hard questions,” says Jacqui. “He deserves the chance to do his thing now and see if it's going to work.” She then adds, “And we can't go anywhere but up.”