6 ms·

My parents lost a small fortune in 2001 riding the tech crash down (Nortel was a good chunk of that). I've been trying to explain to them (1st gen Chinese immig

My parents lost a small fortune in 2001 riding the tech crash down (Nortel was a good chunk of that). I've been trying to explain to them (1st gen Chinese immigrants) for the past three years that Nortel was killed partly by focused Chinese spying and IP-theft by Huawei. CSIS has know about this for years. They (my parents) just wouldn't believe it until I showed them this article. Their former university classmates (who also immigrated to Canada) are likely part of the 20 people that jumped ship to Huawei and implicitly may have leaked data before then. I'm glad this article got through to them, that it isn't just politics and Huawei & the CCP really did go offside.

zyang 6y ago
I interned at Nortel in early 2000's right before it all went down. I can tell you the engineering culture was rotten within. No-one was doing anything useful for years. Many orgs were built around milking the ancient layer 2 passport switch. The layer 3 router meant to compete with Cisco was 3 years late and only sold a few dozen units. There was accounting fraud going on at the highest level - delivery trucks circles around to pad the books. I'm sure the hack happened. I just don't think it would had made any material impact - there was simply not much to steal ¯\_(ツ)_/¯
- freshhawk 6y ago
  I was also there as an intern around the same time. It was an insane place to get my first "office job" experience. Entire buildings of hundreds of people all working on powerpoint reports about potential training ideas for future projects to improve the production of the powerpoint presentations made to summarize the reports on internal "sales" numbers that are then filed without anyone reading them because everyone knew they were too fudged to matter and the internal competition thing was a smokescreen for fraud anyway. Who was embezzling what this week were conversations coop students got to overhear. I was there shortly before the whole thing collapsed and right before it did, in my department, there was a lot of boat shopping combined with clock watching as they waited for options to vest before the whole thing fell apart (everyone knew it would soon).
  - chvid 6y ago
    We killed our own telecommunications industry by first throwing it into a massive bubble and then starving the shit out of it. It wasn't killed by spying Chinese communist; if anything it was killed by the flipside of our capitalist system. The "madness of crowds" that drives "hot" industries through periods of massive over-investment followed by massive under-investment.
    - treeman79 6y ago
      Sounds like it was badly miss managmed. Better companies outsold it, causing it to file bankruptcy. This is one of the points of capitalism, Bad / wasteful decisions lead to failure. Better managed companies rise. Consumers get better products cheaper.
- deleted 6y ago
  [deleted]
- dehrmann 6y ago
  Someone I worked with in 1006 who I think was at Bay Networks and jumped ship to Cisco had similar feelings about Nortel. Nothing about China, but it was already a sinking ship.
- jbay808 6y ago
  I'm sure it looks like that inside many big companies. There's a reason that FAANG+ companies fought over Nortel's patent trove. Nortel tech is still in a lot of today's most valuable products, covering things from BGA routing techniques to wireless communications. The area still supports an ecosystem of small manufacturers of world-leading optics and photonics components. That says something, at least.
vkou 6y ago
I find it hard to believe that the company was so incredibly fragile that it, uniquely among its competitors was killed by Huawei stealing some of its IP. Far more likely, there's no shortage of other reasons that led to its downfall, but it's easier for the people responsible to blame spies.
- refurb 6y ago
  I thought the article did a decent job of explaining that. Nortel without the IP theft was certainly on shaky ground. It sounds like the IP gave Huawei an opportunity to catch up more quickly and with Chinese govt cash, pull the rug out from under Nortel.
  - close04 6y ago
    > the article did a decent job of explaining I'll take this with a grain of salt. To this day Bloomberg still stands by its "The Big Hack" article (Supermicro, Amazon, and Apple being hacked with the tiny Chinese chip), containing claims that have been thoroughly refuted (and ridiculed) since then, and about which even their own sources were very incredulous. The CEO of Apple called it "100 percent a lie", which is a very harsh word in this context. Those were lower standards than the ones we're held to when commenting here on HN. I don't know how that article came to be but such precedent puts their tech articles into serious question. Obviously such articles about major Chinese interference and hacks are great with the readers and get a lot of attention. But while the premise may be true (the Chinese hack most likely happened), the implications and the interpretation of the reporter are on shaky ground. I don't have any further evidence but I'd say that Bloomberg may be pandering to the readers and giving them what they want to hear during these times. And if I were Bloomberg reporters Jordan Robertson or Michael Riley I'd say that even if my sources denied it.
    - refurb 6y ago
      Yeah, that same article was top of mind when reading this article. It's a little hand-wavy I'll admit. The article makes accusations that they don't back up very well. That said, I thought it was a decent attempt to be somewhat balanced.
CamperBob2 6y ago
Be sure to explain to your parents that this particular news outlet (Bloomberg) has a history of playing fast and loose with reality, particularly in regard to supposed Chinese industrial espionage activities. [1] Also you might point out that the company pays bonuses to its "journalists" for successfully affecting financial markets. [2] 1: https://appleinsider.com/articles/19/10/04/editorial-a-year-later-bloomberg-silently-stands-by-its-big-hack-icloud-spy-chip-story https://appleinsider.com/articles/19/10/04/editorial-a-year-... 2: https://www.businessinsider.com/bloomberg-reporters-compensation-2013-12 https://www.businessinsider.com/bloomberg-reporters-compensa...
- smabie 6y ago
  Are you suggesting that Nortel wasn't hacked by the Chinese?
  - geofft 6y ago
    The article itself suggests that it's a possibility. There's no evidence connecting the hack to Nortel's flagging fortunes, and there's no evidence connecting Huawei's success to the information in the hack. The article makes a much stronger argument that effective Chinese government support of Huawei and the failure of the Canadian government to support Nortel, as well as Huawei's ability to hire away many of Nortel's top researchers, led to their success. (The journalist's own summary of her article: "It turns out Canada really blew it." https://twitter.com/natalieobiko/status/1278366529591980032 https://twitter.com/natalieobiko/status/1278366529591980032)
    - Barrin92 6y ago
      getting downvoted for pointing out facts and reiterating the authors own words. The anti-Chinese hysteria on this website really is a sight to behold at this point. Is "China bad" how HN and the US is going to look for the next 20 years as North America goes down the hill? For an actual science based look at Nortel there was a good study done by a team at the Tefler School of Business years ago.[1] Taking an extensive look at the corporate culture and the state of the business which was despite dotcom evaluations in a pretty sorry state already. Tracing the decay back to the 80s and 90s and a whole row of disastrous decisions. [1](https://obj.ca/article/nortels-failure-was-years-making-telfer-study-finds-0 https://obj.ca/article/nortels-failure-was-years-making-telf...)
alphaomegacode 6y ago
A former gf of mine worked at Nortel (shipping) and she would mention a lot of what was written in this article. I thought it more or less conspiracy theories or drama, not realizing it could be real. Stupid me I guess
mytailorisrich 6y ago
Nortel was not killed by Huawei or a hack. It was killed by bad management. The article tries to paint the picture of a fantastic company but that was not the case. It was mismanaged (and the article provides some glaring examples, including fraud), slow, bloated, it was really struggling in the cellular space. Even the account of the hack shows how badly Nortel handled it. There's always the temptation to find an external scapegoat but the buck does stop with Nortel's management.
- dig1 6y ago
  The same happened to Nokia. People usually say that Microsoft killed it, but it was already pretty much behind everything when Microsoft took it. Too much bureaucracy, everything outsourced, management out of touch with anything, meetings after meetings... Hell, I remember two/three weeks of meetings to replace apache proxy with nginx. Actual replacement and configuration update would take a couple of minutes.
  - jiggawatts 6y ago
    "But what if something goes wrong!?"
koheripbal 6y ago
Chinese nationalism is potent. ...and it's somewhat understandable to internalize some of the pride of being part of a global power that is on the rise. For those of us of Mediterranean decent, it would be as if the Roman Empire has been rebuilt and were expanding its influence globally. It would be hard for most people not to feel some element of subconscious or conscious pride. The same feelings helped prop up the new Caliphate in the middle east recently (until it became obvious how brutal ISIS was). Everyone wants to be part of something bigger than themselves.
calyth2018 6y ago
I work with a ton of ex-Nortel engineers in town. All of them agree that the company was grossly mismanaged. The CxOs fudge the accounting, ignored warnings about their systems, and the burden of Nortel's fall should be mainly shouldered by management. Huawei hacks are the sideshow, the burning tire fire of management is the main act. Your parents aren't the only ones burnt by Nortel. Lots of Nortel employees indulged with the paper gains of their stock, only for it to crater and created lots of financial strain. But like most articles with a question as the title, the answer is typically no. This article, frankly, is trying so hard to rewrite history, to divert attention from the main act to the side show.

zyang 6y ago

I interned at Nortel in early 2000's right before it all went down. I can tell you the engineering culture was rotten within. No-one was doing anything useful for years. Many orgs were built around milking the ancient layer 2 passport switch. The layer 3 router meant to compete with Cisco was 3 years late and only sold a few dozen units. There was accounting fraud going on at the highest level - delivery trucks circles around to pad the books. I'm sure the hack happened. I just don't think it would had made any material impact - there was simply not much to steal ¯\_(ツ)_/¯

freshhawk 6y ago
I was also there as an intern around the same time. It was an insane place to get my first "office job" experience. Entire buildings of hundreds of people all working on powerpoint reports about potential training ideas for future projects to improve the production of the powerpoint presentations made to summarize the reports on internal "sales" numbers that are then filed without anyone reading them because everyone knew they were too fudged to matter and the internal competition thing was a smokescreen for fraud anyway. Who was embezzling what this week were conversations coop students got to overhear. I was there shortly before the whole thing collapsed and right before it did, in my department, there was a lot of boat shopping combined with clock watching as they waited for options to vest before the whole thing fell apart (everyone knew it would soon).
- chvid 6y ago
  We killed our own telecommunications industry by first throwing it into a massive bubble and then starving the shit out of it. It wasn't killed by spying Chinese communist; if anything it was killed by the flipside of our capitalist system. The "madness of crowds" that drives "hot" industries through periods of massive over-investment followed by massive under-investment.
  - treeman79 6y ago
    Sounds like it was badly miss managmed. Better companies outsold it, causing it to file bankruptcy. This is one of the points of capitalism, Bad / wasteful decisions lead to failure. Better managed companies rise. Consumers get better products cheaper.
deleted 6y ago
[deleted]
dehrmann 6y ago
Someone I worked with in 1006 who I think was at Bay Networks and jumped ship to Cisco had similar feelings about Nortel. Nothing about China, but it was already a sinking ship.
jbay808 6y ago
I'm sure it looks like that inside many big companies. There's a reason that FAANG+ companies fought over Nortel's patent trove. Nortel tech is still in a lot of today's most valuable products, covering things from BGA routing techniques to wireless communications. The area still supports an ecosystem of small manufacturers of world-leading optics and photonics components. That says something, at least.

vkou 6y ago

I find it hard to believe that the company was so incredibly fragile that it, uniquely among its competitors was killed by Huawei stealing some of its IP. Far more likely, there's no shortage of other reasons that led to its downfall, but it's easier for the people responsible to blame spies.

refurb 6y ago
I thought the article did a decent job of explaining that. Nortel without the IP theft was certainly on shaky ground. It sounds like the IP gave Huawei an opportunity to catch up more quickly and with Chinese govt cash, pull the rug out from under Nortel.
- close04 6y ago
  > the article did a decent job of explaining I'll take this with a grain of salt. To this day Bloomberg still stands by its "The Big Hack" article (Supermicro, Amazon, and Apple being hacked with the tiny Chinese chip), containing claims that have been thoroughly refuted (and ridiculed) since then, and about which even their own sources were very incredulous. The CEO of Apple called it "100 percent a lie", which is a very harsh word in this context. Those were lower standards than the ones we're held to when commenting here on HN. I don't know how that article came to be but such precedent puts their tech articles into serious question. Obviously such articles about major Chinese interference and hacks are great with the readers and get a lot of attention. But while the premise may be true (the Chinese hack most likely happened), the implications and the interpretation of the reporter are on shaky ground. I don't have any further evidence but I'd say that Bloomberg may be pandering to the readers and giving them what they want to hear during these times. And if I were Bloomberg reporters Jordan Robertson or Michael Riley I'd say that even if my sources denied it.
  - refurb 6y ago
    Yeah, that same article was top of mind when reading this article. It's a little hand-wavy I'll admit. The article makes accusations that they don't back up very well. That said, I thought it was a decent attempt to be somewhat balanced.

CamperBob2 6y ago

Be sure to explain to your parents that this particular news outlet (Bloomberg) has a history of playing fast and loose with reality, particularly in regard to supposed Chinese industrial espionage activities. [1] Also you might point out that the company pays bonuses to its "journalists" for successfully affecting financial markets. [2] 1: https://appleinsider.com/articles/19/10/04/editorial-a-year-later-bloomberg-silently-stands-by-its-big-hack-icloud-spy-chip-story https://appleinsider.com/articles/19/10/04/editorial-a-year-... 2: https://www.businessinsider.com/bloomberg-reporters-compensation-2013-12 https://www.businessinsider.com/bloomberg-reporters-compensa...

smabie 6y ago
Are you suggesting that Nortel wasn't hacked by the Chinese?
- geofft 6y ago
  The article itself suggests that it's a possibility. There's no evidence connecting the hack to Nortel's flagging fortunes, and there's no evidence connecting Huawei's success to the information in the hack. The article makes a much stronger argument that effective Chinese government support of Huawei and the failure of the Canadian government to support Nortel, as well as Huawei's ability to hire away many of Nortel's top researchers, led to their success. (The journalist's own summary of her article: "It turns out Canada really blew it." https://twitter.com/natalieobiko/status/1278366529591980032 https://twitter.com/natalieobiko/status/1278366529591980032)
  - Barrin92 6y ago
    getting downvoted for pointing out facts and reiterating the authors own words. The anti-Chinese hysteria on this website really is a sight to behold at this point. Is "China bad" how HN and the US is going to look for the next 20 years as North America goes down the hill? For an actual science based look at Nortel there was a good study done by a team at the Tefler School of Business years ago.[1] Taking an extensive look at the corporate culture and the state of the business which was despite dotcom evaluations in a pretty sorry state already. Tracing the decay back to the 80s and 90s and a whole row of disastrous decisions. [1](https://obj.ca/article/nortels-failure-was-years-making-telfer-study-finds-0 https://obj.ca/article/nortels-failure-was-years-making-telf...)

alphaomegacode 6y ago

A former gf of mine worked at Nortel (shipping) and she would mention a lot of what was written in this article. I thought it more or less conspiracy theories or drama, not realizing it could be real. Stupid me I guess

mytailorisrich 6y ago

Nortel was not killed by Huawei or a hack. It was killed by bad management. The article tries to paint the picture of a fantastic company but that was not the case. It was mismanaged (and the article provides some glaring examples, including fraud), slow, bloated, it was really struggling in the cellular space. Even the account of the hack shows how badly Nortel handled it. There's always the temptation to find an external scapegoat but the buck does stop with Nortel's management.

dig1 6y ago
The same happened to Nokia. People usually say that Microsoft killed it, but it was already pretty much behind everything when Microsoft took it. Too much bureaucracy, everything outsourced, management out of touch with anything, meetings after meetings... Hell, I remember two/three weeks of meetings to replace apache proxy with nginx. Actual replacement and configuration update would take a couple of minutes.
- jiggawatts 6y ago
  "But what if something goes wrong!?"

koheripbal 6y ago

Chinese nationalism is potent. ...and it's somewhat understandable to internalize some of the pride of being part of a global power that is on the rise. For those of us of Mediterranean decent, it would be as if the Roman Empire has been rebuilt and were expanding its influence globally. It would be hard for most people not to feel some element of subconscious or conscious pride. The same feelings helped prop up the new Caliphate in the middle east recently (until it became obvious how brutal ISIS was). Everyone wants to be part of something bigger than themselves.

calyth2018 6y ago

I work with a ton of ex-Nortel engineers in town. All of them agree that the company was grossly mismanaged. The CxOs fudge the accounting, ignored warnings about their systems, and the burden of Nortel's fall should be mainly shouldered by management. Huawei hacks are the sideshow, the burning tire fire of management is the main act. Your parents aren't the only ones burnt by Nortel. Lots of Nortel employees indulged with the paper gains of their stock, only for it to crater and created lots of financial strain. But like most articles with a question as the title, the answer is typically no. This article, frankly, is trying so hard to rewrite history, to divert attention from the main act to the side show.