Motorola has no restructuring plans: CEO

Ben Klayman

ILLINOIS: Motorola Inc. has no plans to sell any more businesses any time soon, and will focus instead on delivering its cell phones on time, cutting costs and investing in such areas as China and corporate markets, the chief executive said.

After completing the initial public offering for its chips business earlier this month, Motorola's Edward Zander said at an analyst meeting that any restructuring of the world's second-largest cell-phone maker is already being done on a smaller scale within its businesses.

"I told the bankers half jokingly that the 'For Sale' sign was taken down," he said, referring to Motorola after the completion of the IPO of the chip unit, now known as Freescale Semiconductor Inc.

Zander, who took over the Schaumburg, Illinois, company in January, said it needs to ensure customer needs are met quickly as opposed to the late deliveries that have occurred over the years. Motorola has been criticized in the past for being too driven by engineering.

Motorola needs to focus on a world where mobile phones and other electronic devices act as central hubs to manage everything from music to digital photos, Zander reiterated.

He emphasized the need to focus on the company's four basic sets of customers: home, automotive, corporate and mobile electronics.

Several analysts and investors had speculated that Zander planned to eliminate the current corporate structure, reorganizing along customer lines.

Zander wants the company thinking along those lines, but sees no need at this point to actually reorganize the company to match that. "Our company has made too much out of how we're organized," he said.

Just because a business is performing poorly does not mean it should be sold, he added. Poor performance can be fixed as long as the business fits the company strategy.

Repeating past statements, however, Zander said Motorola will look to buy companies from time to time to augment certain businesses. He said he is wary of large acquisitions, but said the large players will thrive.

"Scale matters," he said. "I wouldn't want to be a small company right now because the numbers don't add up."

Areas of investment going forward include products for corporate customers, China and India, marketing, software and building Motorola's "connected home" offerings beyond its cable set-top boxes, Zander said.

Greater teamwork driven by a new bonus structure that rewards company-wide success is helping change the company culture, he said, adding there is still room to lower costs and boost profit margins. Customer satisfaction is another factor in bonuses.

The company also is pushing to improve the delivery times of its products, an area of criticism in the past, Zander said, referring to the recent late introduction of a camera phone at Verizon Wireless.

The price cuts that larger rival Nokia implemented to recapture lost share in the global cell-phone market will have some impact, Zander acknowledged.

However, he remains confident Motorola will thrive with new models like the RAZR V3, an ultra-thin, metal-clad flip phone that includes an integrated digital camera, color screen and a chemically etched keypad created from a single sheet of nickel-plated copper alloy.