Report on Business magazine editor Dawn Calleja.Daniel Ehrenworth/The Globe and Mail
I don’t need a lot of reminders these days that I’m officially among the aged – my teenage son drives home the fact every time he calls me “Unc” (which is to say, often). But I have to admit I was thoroughly shook during a work confab a few months back when I mentioned our plan to commemorate the upcoming 25th anniversary of Nortel’s peak – only to be met with blank stares from a couple of my much younger colleagues.
Fair enough, I suppose – after all, they were barely sentient during the late-1990s tech boom. I, meanwhile, had just started my first job in business journalism. It’s hard to explain the excitement and sheer absurdity of those days. Every company, no matter their business, was slapping a dot-com on the end of their name and touting themselves as the next hottest thing in high tech. Investors were buying it, too, bidding up share prices to insane heights with absolutely nothing on the books to back up the valuations.
And then there was Nortel. Founded in 1895, it was one of Canada’s oldest companies, and until the digital revolution began in earnest, it had a somewhat staid reputation as a purveyor of telephone switching systems. But the company was on the cutting edge in fibre optics – systems of hair-width strands of glass that can carry massive loads of information. In 1996, Nortel’s elite team of researchers in Ottawa produced the first system to send data at 10 gigabits a second. As one trade article gushed: “That is powerful enough ... to blast the U.S. Library of Congress’ entire 18-million-book collection from Washington, D.C., to Los Angeles in about 14 seconds over a single strand of fibre.”
Thinking back now, it was a bit like how I imagine the dawn of the electricity age: You knew everything was about to change, but you couldn’t quite grasp how those changes would play out or just how world-altering they’d be. The prophet of change in this case was John Roth, who’d joined Northern Telecom in 1969. He took over as CEO in 1997 and ruthlessly remade the company as a major player in the internet revolution.
At its peak, in mid-2000, Nortel was the ninth most valuable company in the world. Investors and employees became millionaires. Every bright mind wanted to work at its sprawling campus, and its fibre ran to every corner of the globe.
But through a combination of overpriced acquisitions, product delays and accounting skulduggery, everything very quickly went to hell. Today, Nortel is known as Canada’s most catastrophic corporate failure. For a glorious slice of time, though, during one of the craziest bubbles in history, it was a spectacular success – one of the world’s biggest, most innovative companies, the place every smart person wanted to be.
And that’s worth remembering, particularly as Canada enters this new era of economic patriotism. Yes, Nortel made huge mistakes, ones that resulted in decades of government-subsidized research and development being sold off for a fraction of its value (to some of the world’s current reigning kings of tech, I might add). But it also did big, bold things – the kind we’ve forgotten how to do in this country.
Whether you’ve never heard of Nortel <sob> or you lived through the wild ride, you’ll learn something new from Chris Taylor’s oral history of the glory days, “When we were kings.”
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