It gets spanked for switches.

• Position: Triangle

Nearly 30 years ago, the predecessor of Nortel Networks Corp. opened its largest U.S. plant in the Triangle to make digital switching systems for phone networks. The company Web site still gloats that Nortel switches then were a full two years ahead of competitors "who were still struggling in the labs."

The Canadian telecom giant helped Research Triangle Park grow and develop its reputation as a tech hub. In the mid-1990s, its employment in North Carolina peaked at more than 8,000. "Around 2000, they were running as fast as they could and were as healthy as could be," says Jeff Kagan, an independent telecom analyst based in Marietta, Ga. "Then suddenly they slammed into a brick wall."

Telecom companies took a big hit in the recession of 2001, and much of Nortel's RTP work force was sent packing. By late 2003, its employment in North Carolina was down to 3,000. Not all of its problems were directly related to the market. In 2006, the company agreed to pay $2.5 billion to settle a shareholder lawsuit over restated earnings. In 2007, it agreed to pay $35 million to settle fraud charges filed by the U.S. Securities and Exchange Commission.

Nortel lost nearly $1 billion in 2007 and $3.6 billion during the first nine months of last year. North Carolina employment is down to 2,000, and the future is murky Beset by heavy debt and unexpectedly...