Nortel Networks Corporation, formerly Northern Telecom Limited, was a Canadian multinational telecommunications and data networking equipment manufacturer headquartered in Ottawa, Ontario. It was founded in Montreal, Quebec, in 1895 as the Northern Electric and Manufacturing Company, or simply Northern Electric. Until an antitrust settlement in 1949, Northern Electric was owned mostly by Bell Canada and the Western Electric Company of the Bell System, producing large volumes of telecommunications equipment based on licensed Western Electric designs. At its height, Nortel accounted for more than a third of the total valuation of all companies listed on the Toronto Stock Exchange (TSX), employing 94,500 people worldwide. In 2009, Nortel filed for bankruptcy protection in Canada and the United States, triggering a 79% decline in its corporate stock price. The bankruptcy case was the largest in Canadian history and left pensioners, shareholders, and former employees with enormous losses. By 2016, Nortel had sold billions of dollars in assets. Courts in the US and Canada approved a negotiated settlement of bankruptcy proceedings in 2017.
History
Origins Alexander Graham Bell conceived the technical aspects of the telephone in July 1874, while residing with his parents at their farm in Tutela Heights, on the outskirts of Brantford, Ontario. He later refined its design at Brantford after producing his first working prototype in Boston. Canada's first telephone factory, created by James Cowherd of Brantford, was a three-storey brick building that soon started manufacturing telephones for the Bell System, leading to the city's style as The Telephone City. After Cowherd's death in 1881 which resulted in the closure of his Brantford factory, a mechanical production department was created within the Bell Telephone Company of Canada and production of Canadian telephone equipment was transferred to Montreal in 1882 to compensate for the restrictions on importing telephone equipment from the United States. In addition to telephones, four years later, the department started manufacturing switchboards, at first the 50-line Standard Magneto Switchboard. The small manufacturing department expanded yearly with the growth and popularity of the telephone to 50 employees in 1888. By 1890 it had been transformed into its own branch of operations with 200 employees, and a new factory was under construction. As the manufacturing branch expanded, its production ability increased beyond the demand for telephones, and it faced closure for several months a year without manufacturing other products. The Bell Telephone Company of Canada's (later renamed to Bell Canada) charter prohibited the company from building other products. In 1895, Bell Telephone of Canada spun off its manufacturing arm to build telephones for sale to other companies, as well as other products, such as fire alarm boxes, police street call boxes, and fire department call equipment. This company was incorporated as the Northern Electric and Manufacturing Company Limited.
Northern Electric and Manufacturing Company Northern Electric and Manufacturing Company Limited was incorporated on December 7, 1895. The initial stock capital was $50,000 at $100 per share, with 93% held by the Bell Telephone Company of Canada and the remainder held by seven corporate directors. The first general stockholders meeting was held on March 24, 1896. In December 1899, The Bell Telephone Company of Canada bought a cabling company for $500,000; a Canadian charter named it "The Wire and Cable Company". Northern Electric and Manufacturing further expanded its product line in 1900, manufacturing the first Canadian wind-up gramophones that played flat discs. In 1911 the Wire and Cable Company changed its name to the "Imperial Wire and Cable Company".
Northern Electric Company
The construction of a new manufacturing plant started in 1913 at Shearer Street in Montreal, Quebec, as preparations began for the two manufacturing companies' integration. Then, in January 1914, the Northern Electric and Manufacturing Company and the Imperial Wire and Cable Company merged into the Northern Electric Company, commonly known simply as Northern Electric. The new company opened the doors on a new manufacturing plant in January 1915. This facility, located on Shearer Street, was the primary manufacturing centre until the mid-1950s. Edward Fleetford Sise was the president and his brother Paul Fleetford Sise was the vice-president and general manager.
During the First World War, Northern Electric manufactured the Portable Commutator, a one-wire telegraphic switchboard for military operations in the field. In 1922, Northern started to produce, for $5, the "Peanut" vacuum tube, which required only a single dry-cell battery. The use of alternating current was still under development during this time. The Northern Electric Peanut tube was the smallest tube made and drew only one-tenth of an ampere. During the 1920s Northern Electric made kettles, toasters, cigar lighters, electric stoves, and washing machines. In January 1923, Northern Electric started to operate an AM radio station with call letters CHYC, in the Shearer Street plant, and much of the programming was religious services for the Northern Electric employees and families in the community. In July 1923, CHYC-AM was the first radio station to provide entertainment to the riders of the transcontinental train, in a parlor car fitted with a radio set to receive the broadcast as it left Montreal and traveled west. Later in the 1920s, Northern created the first talking movie sound system in the British Empire for a theater in Montreal. During the Great Depression in the 1930s, Northern Electric was affected, like most other companies. From the beginning of 1930 through the end of 1933, sales dropped from $34 million to $8.2 million, with employees dropping from 6,100 to 2,400.
Independence from Western Electric
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