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Wednesday, March 26, 2008

Moto splits in two, what will Carl Icahn do with all his free time?

Mar 26 2008 10:31AM | Permalink | Email this | Comments (11) |
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It’s official. Less than two months after announcing it was considering the action, Motorola said today that it will separate its mobile devices business, leaving it with its broadband and mobility solutions business. 

I’ve yet to see an official statement from Carl Icahn, the Wall Street raider who has been pressing Moto for board seats and management changes, but it isn’t a stretch to assume he’s happy about this. In a letter to stockholders on Monday, Icahn called for support from shareholders in his two demands: changes to the company board and the spinout of Moto’s mobile devices unit with a new CEO.

Demands from Icahn, who, by the way, is Moto’s second largest shareholder with more than a 6% stake in the company, have been coming for more than a year. His campaign on Moto included a failed attempt at a board seat, a very public war of words, and recent legal action against the Schaumburg, Ill-based company that Icahn believed was necessary to “investigate whether and to what extent the board of directors of Motorola failed in their duties as directors in supervising management and setting policy and direction of Motorola.” In the tremendous amount of time he has devoted to leaning on Moto, Icahn has also shown public disapproval of Greg Brown, Moto’s recently appointed CEO, questioning if he is qualified to run the company.

As I state in our accompanying news coverage (“Motorola spins out mobile devices business”), Icahn had reason to complain based on the company’s financial performance. From a business standpoint, Moto has been drowning for sometime. It’s now dropping a boulder it’s been carrying for sometime in an effort to save itself.

But our readers, many of which are EEs, have taken a different approach and noted Moto’s lack of innovation and poor management of technology in previous EDN blog posts on the trouble at Moto. Now I’m interested in hearing from you again. Will spinning out Moto’s mobile devices business be good for tech innovation? Share your comments below.

--Suzanne Deffree, Managing Editor, News


Reader Comments


at 3/26/2008 11:17:55 AM, kal said:
I had worked for Motorola in past. They have many are working on same stuff without talking other groups because of ego and security. Managers send every dollar that is in budget on last day because if they don''''t send money their budget will disappears.

at 3/26/2008 3:02:13 PM, Frank said:
I worked for Motorola for 13 years, leaving at the end of 1990. That was the time when Chris Galvin was completeing his ascendency to the porition of Pres. and CEO. George Fischer left to rescue Kodak. I left because I was unhappy with the direction upper management (I was lower management) was taking and with the choice of people being promoted. This was about the time when the Celluar Division was moving out of Arlington Heights into Libertyville. Libertyville (the Cellular Division) developed a severe cancer which was manifested by very bad decisions such as designing only analog phones and horrible user interfaces. They were also very stubborn and would not listen to any external input. Eventually the top mis-managers were terminated, but by this time the terminal damage was done. More top managers were brought in from GE which was a totally different type of company. They only compounded the problems. By this time, the selling-off of various pieces was well under way. It was obvious the only way to save Motorola was to sell it off. We are now hearing the death rattle of a once great corporation. This is yet another example of third generation family management killing a company. It has happened before and will, unfortunately, happen again.

at 3/26/2008 3:27:53 PM, W17053 said:
I hear Chris sold 99% of his holdings (rattle-rattle).

at 3/26/2008 3:42:53 PM, rdc said:
I spent 10 years in semiconductor at moto and left twice because of bad management decisions. They promoted the pablum-vendors instead of those that knew the score and weren't afraid to speak the truth. Semiconductor died a slow death by a thousand paper cuts. At one time they were the best at whatever they did but they squandered their lead with brain-dead midwestern managers led by the Grandson of the founder. What better example of Nepotism gone bad that Christopher Galvin?

at 3/26/2008 7:34:04 PM, rhk001 said:
I was Motorolan in SPS. Management in Moto always promoted the wrong people, and not treasured those who were really making contribution to the company. This was especially true in Final Manufacturing. All those quit before SPS was spin-off are now very successful in their present companies. It would be a completely different story if Moto could value those talents.

at 3/27/2008 4:33:32 AM, hewe12 said:
I was with Motorla in the Flensburg Germany location from middle 2000 to 2001 in the product support department. Observations: beautiful handies like this small "cramer" type, but mixed technology. Why did they use a discrete LNA an mixer but then this highly integrated post processing devices?? Why did they always reinvent the wheel not taking into account previous found mistakes? Why is the user software not user friendly? A big theme was the too high component count, what to do against it? Instead of having a flat hierachy there were too many people just pushcing papers from one side to the other, slow decicion making, long video discussion bringing nothing in the end, e.g. what to do with about 5000 pre production phones, nobody wanted to give a definite decision and so on.Security measures were so high, sometimes I felt like living in a prison.. POPI was the big theme. Management, my "boss" at least cheated me telling that at their place they did not need hobby-research. Fortunately I got THE posision in a high physics enviroment doing real research. It was a good decision, as Motorola Flensburg has been shut down. From the short sighted management point of view it might be a good decison to ship the manufacturing to China, but if the intellectual property of Mot can be saved in such an enviroment (not only POPI) can be questioned.

at 3/28/2008 7:38:15 AM, newer said:
While some of the comments about may be true, it is probably better to look at the problems of today and not of 15-20 years ago. Chris Galvin had faults, but things did get done. Under Zander nothing happened. He spent his whole time pushing a phone (RAZR) developed under Galvin. There are multiple stories of phones 3 years in development being cancelled. The RAZR name was driven into the ground. Layoffs were the fix, even if it meant losing key engineers and groups. The problems today aren''t that hard to identify. To much middle management that spends more time preventing innovation than getting phones on the market. Sales and Marketing that couldn''t sell hot chocolate to a man freezing. A Supply Chain that thinks they need to renegotiate pricing every month instead of working on the rest of the supply chain. Phone development time that takes twice as long as it should and is always delayed. Take Sales and Marketing, could they have killed the RAZR name any more? And when they have a new phone, they can''t sell it. The Z10 should be a YouTube phone, it can take video, edit it, and than post it to YouTube. What does Sales do with this, they can''t sell it. Instead they push RAZR2 and sell it by showing someone sticking it into a car. End result, the answer to Motorola''s problems are to sell phones. The issue, Motorola has some of the worst Sales and Marketing around.

at 4/2/2008 12:00:23 PM, SemiMike said:
Motorola was great in components and weak in systems for its entire history, and very weak in anything CONSUMER (read "fickle") related. They were great industrial supplier for many years. You cannot take that muscle culture and teach it to make foo-foo stuff for kids. Better to get OUT of TV's (long ago) and cell phones (recently) and go back to their roots..in my opinion as 30 year Motorolan ending in 1997.

at 4/4/2008 2:38:56 PM, FireZander said:
I agree thet Moto has the (absolutely) worst sales and marketing people around. Aslo they shoudl completely change Moto's board of directors. They are the worst in selecting CEOs. The company would have been much better off if they promoted Mike Z as CEO instead of hiring Zander. Even today Zander is still getting paid as a Moto employee. They should have fired him long time ago under the clause of incompetency!

at 4/4/2008 6:15:27 PM, dennie said:
I think splitting and making it more efficient will help Motorola gets back on it's feet again. Motorola have great technology advantage, and needs to be close to the market inorder to produce products customers wants. I have been a 12 year Motorolans, and believe it has lots of good talents and competence. Problems always arise when it expands and increase management layers...need to streamline the organization structure to be flatter and closer to market.

at 4/8/2008 5:03:47 PM, Mike the vendor said:
I agree with a previous post about the 2002+ Moto and their terrible treatment of suppliers, especially during their run from their mfg facilities to the big CM's. They trashed and stepped on all the suppliers. The good ones got out, and the bad ones took advantage of them. Sales and Marketing were especially screwed up !

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