Subject: [NEXTEL-1] Motorola chief aims for profitable legacy

From: [email-masked]
Date: Wed, 30 Jul 2003 10:18:39 -0400

Motorola chief aims for profitable legacy

By Barbara Rose
Tribune staff reporter

July 30, 2003

Motorola Inc. Chairman and CEO Christopher Galvin said Tuesday that he will
lead a cultural change that will make the corporation far more profitable.

He said the diversified electronics company his grandfather founded is known
for innovation and ethics, qualities he would never compromise.

"What I want my legacy to be ... is to add an element of financial
performance and rigor to the way this company performs for shareholders," he
said. "I want to take this corporation through its most profound performance
culture change in its history."

Galvin set a benchmark for the Schaumburg-based company of 15 percent
operating earnings--a reasonable goal for a public company but one that far
outstrips Motorola's 6.9 percent average annual operating earnings over the
last two decades.

He did not set a date for hitting the target but said, "We understand it's
going to take time."

His remarks came at a daylong meeting in Rosemont with financial analysts,
where Motorola's top executives -- the majority of them new to their
positions since last year--outlined ambitious plans to improve profitability
and return to growth.

But analysts were skeptical.

"It's like every year -- optimistic [presentations about] big changes," said
Bear Stearns analyst Wojtek Uzdelewicz. "We want to see the delivery."

Tuesday's presentations were the first detailed plans laid out since
Motorola completed a massive restructuring last year and returned to
profitability, but with one-third fewer employees and a shrinking revenue
base.

The company reported a disappointing first six months, with sales down 6
percent partly as a result of too few new products being released in its
biggest business: cell phones.

Motorola is believed to have lost market share in the third quarter,
although it remains the world's second-biggest cell-phone maker after Nokia.

Cell-phone executives on Tuesday touted a features-rich lineup of new
handsets being rolled out through the fall in a hotly-competitive world
market where Nokia also plans to raise the ante with many new phones.

Nokia has suggested it will be willing to shave its rich, 20-plus percent
operating margins to gain market share.

Motorola chief operating officer Mike Zafirovski said the company won't
sacrifice profit margins to gain share, even though it recognizes that
"great companies drive profitability by increased market share."

Corporate vice president Mike Fenger and chief procurement officer Theresa
Metty outlined how Motorola plans to cut $3 billion in costs by improving
efficiency through the end of next year, using Motorola's version of a
popular quality program, Digital Six Sigma.

Fenger is looking to cut $900 million in costs through reducing defects and
$1.1 billion by introducing phones faster and hitting deadlines for
delivering them to carriers.

Metty is looking to save $1 billion by improving procurement. She said
Motorola has far too many suppliers -- 44,000 --and too many people
separately making purchasing decisions.

"The goals are not unrealistic," Uzdelewicz said, "but the real devil is in
the details."

http://www.chicagotribune.com/technology/chi-0307300261jul30,0,436608.story?coll=chi-business-hed

------------------------ Yahoo! Groups Sponsor ---------------------~-->
Buy Ink Cartridges or Refill Kits for Your HP, Epson, Canon or Lexmark
Printer at Myinks.com. Free s/h on orders $50 or more to the US & Canada. http://www.c1tracking.com/l.asp?cid=5511
http://us.click.yahoo.com/sO0ANB/LIdGAA/ySSFAA/61FxlB/TM
---------------------------------------------------------------------~->

Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/