Motorola to close down Harvard facility, cut 2,500 jobs

HARVARD: Motorola Inc., which makes mobile phones and computer chips, said on

Monday it plans to cease manufacturing operations at its Harvard, Ill., campus,

resulting in the elimination of 2,500 jobs.

Motorola makes cellular telephones at the plant, but the high tech sector has

not been immune to layoff announcements, as shown by personal computer maker

Gateway Inc.'s plan to lay off 10 per cent of its global workforce as well as a

wave of job cuts at dotcom companies.

About 2,500 jobs will remain at Harvard, Ill., but the emphasis will shift to

customer order fulfillment and new product sourcing. Competitive severance and

comprehensive outplacement benefits will be provided to eligible employees.

The shutdown, expected by June 30, is part of a long-term, company-wide

strategy to improve supply chain efficiencies, consolidate manufacturing,

improve financial performance and build on company strengths, said Motorola,

which employs 130,000 worldwide.

"In 2000, the Harvard manufacturing team lowered production costs and

improved quality," said Mike Zafirovski, president of Motorola PCS.

"But we cannot competitively manufacture products when there is surplus

global capacity at Motorola's lower cost sites."

Motorola, a company with $37.6 billion in 2000 sales, could not immediately

be reached about whether a charge would be recorded from the shutdown.

On Jan 11, Motorola said that weakening economic conditions would hurt its

business during the first half of 2001, but that it would cut costs to improve

the company's performance.

Motorola's fourth quarter operating profits fell to $335 million or 15 cents

a share, compared with $564 million or 25 cents a share. Total fourth-quarter

sales rose to $10.1 billion from $9.1 billion in the fourth quarter of 1999.

(C) Reuters Limited 2001.