Nortel adds luster to N.C. economy

By JON TALTON

July 5, 2000 Web posted at: 10:44 AM EDT (1444 GMT)

CHARLOTTE, North Carolina (Charlotte Observer) -- Once upon a time, the marquee companies made and sold hard, visible things: cars, airplanes, washing machines.

But this is no fairy tale. Now some of the most important corporations are built around nearly invisible products.

That's where the Research Triangle is getting much of its wealth-building and job-creating heft, from companies like Red Hat Inc., Glaxo Wellcome and Nortel Networks Corp.

Nortel employs 7,500 people in the Triangle, a figure larger than First Union's downtown Charlotte work force, and it dwarfs Red Hat's 435 tech heads in Durham. That makes Nortel one of the Raleigh-Durham area's top private-sector employers, just behind IBM Corp., with 13,000.

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But don't expect to go down to Harris Teeter and buy "a Nortel."

Nortel makes the hugely profitable but unsexy guts of 21st-century communications networks. Nortel equipment is found in everything from Internet outfits to telephone networks to cellular operations. When you hear about "convergence," the coming together of phones, cable TV and the Internet, it will happen on equipment and software from companies like Nortel and competitors like Lucent Technologies Corp. and Alcatel.

About the only quibble you could have about Nortel and North Carolina was that we are still a branch office to a company with operations in 150 countries and headquartered in Brampton, Ontario.

Headquarters make this kind of difference: One headquarters employee, if he is like Hugh McColl Jr. of Bank of America Corp. or the late Bill Lee of Duke Energy Corp., can do more good for a community than thousands of branch-office workers.

But North Carolina may now have the next best thing. Last week, Nortel named Raleigh resident Clarence Chandran chief operating officer and heir apparent to John Roth for the top job. Chandran, who had been in charge of Nortel in the Triangle, intends to keep his home in Raleigh and commute to Canada and Nortel offices in Boston.

The 51-year-old Chandran joined Canada's old Northern Telecom in 1985, and moved to the U.S. in 1990.

In the Triangle, Chandran has served on the Governor's Council for Management and Development, the executive committee of the board of Kenan-Flager Business School at UNCChapel Hill and the N.C. Center for Non Profit Organizations.

No one expects this backbone of corporate Canada to move its headquarters to North Carolina. But in a globalized economy, having a corporate star with an interest in the Carolinas (beyond golf) may be the next best thing.

It also shows one way Raleigh's different template from Charlotte is working out.

Raleigh is the headquarters of state government, but it is light on corporate power. CP&L Energy Corp., the former Carolina Power & Light, is Raleigh's only Fortune 500 headquarters.

But between the tech start-ups throughout the region - often fueled by brainpower from larger companies and the universities - and the power of Nortel, IBM and Glaxo, the Triangle is creating a distinct business power base.

Nortel will tell a tale. It's a darling on Wall Street, with 19 analysts listing the stock as a strong buy. Its shares were recently closing in on a new 52-week high.

Living at the heart of the New Economy's nervous system will make Nortel prone to all the volatility of the age but also to its rewards.

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