Nokia Weighs Headquarters Sale: What It Means

Nokia has 5 years left.

Nokia recently announced that they are considering selling their headquarters in Finland and leasing it back.

This practice was widely used to shore-up cash for fast declining companies, hoping for a turnaround. Amoco did it. IBM did it. Leo Burnett did it.

Zenith did it too.

I was a young intern at Zenith Electronics, a popular TV and computer manufacturer. When the TV business got tough, Zenith spun off the computer manufacturing and concentrated on TVs, cable TV systems and OEM computer monitors. To save manufacturing costs, it moved factories to Taiwan and Mexico.

Year after year, none of its lofty endeavors paid off. Zenith was once a dominate computer monitor OEM for Apple and Compaq. Strong competition from Taiwan and South Korea and continued manufacturing problems killed the computer monitor business. Digital set-top-boxes were all the rage. Zenith decided to develop a brand new platform based on IBM’s ill-fated OS/2. Zenith also had key HDTV patents and technologies, but the slow standard approving process could not move fast enough to save Zenith’s TV business.

Then the situation got really bad. The company had to freeze all office supply orders and cut garbage collection and custodian services to only every other day. That’s when Zenith was finally sold to its largest supplier: LG Electronics. Today, the Zenith brand lives on and now acts as part of LG’s U.S. operations.

In many ways, Nokia is similar to Zenith in the early 90s: clinging to their former glories, good products that never gained enough traction, many rounds of layoffs and unable to attract top talents. Zenith was the last U.S. TV manufacturer. Nokia will be last of its kind as well.

I hope I’m wrong—my first mobile phone was a Nokia.