According to a representative from Nortel (NT) China, the bankruptcy protection announced by Nortel last week will not affect the formal operation of its subsidiary in China.

On January 15, 2009, the Canadian communications and network giant Nortel announced plans to seek bankruptcy protection from the United States' Bankruptcy Court for the District of Delaware. At the same time, its many subsidiaries in Canada and Europe will fall under the bankruptcy protection procedure. This makes Nortel the first large technology enterprise that applied for bankruptcy protection since the outbreak of the global financial crisis.

However, the company's branches in Asia, including those in China, will not be affected. A representative from Nortel China told local media that bankruptcy protection is different from bankruptcy. At present, the operation of Nortel China running normally. The leadership of the company has conciliated the employees and told them it is no need to worry. Nortel China reportedly has over 4,000 employees.

Prior to this, Nortel announced global job cuts of 1,300 employees in November 2008 and many senior managing staff, including its chief technology officer and chief marketing officer, departed from the company. Just a few days ago, the company restructured its Greater China area, in which former president of Greater China Jackson Wu retired, replaced by Huang Chenhong and Huang Yanwen.

Nortel knew problems were on the horizon, and it commenced a process to turn around and transform Nortel in late 2005. However, the global financial crisis and recession have compounded Nortel's financial challenges and directly impacted its ability to complete this transformation. Nortel is taking this action now, with what the company reports to be a USD2.4 billion cash position, to preserve its liquidity and fund operations during the restructuring process.