Motorola Considers Restructuring
Apr. 01, 1998
CHICAGO (AP) _ Motorola Inc. said Tuesday it is considering a major restructuring of its numerous businesses that include cellular phones, pagers, two-way radios and semiconductors.
No details were provided, but the company said in a statement that any reorganization ``will be designed to create growth and new opportunities.''
Earlier, The Wall Street Journal reported that the Schaumburg, Ill.-based company is considering merging a half-dozen businesses into two business segments: one for consumer-oriented products, the other for industrial customers.
The newspaper said an official announcement could come within weeks.
Motorola warned earlier this month its first-quarter earnings would fall below expectations as the Asian economic crisis hurt profits and the company continued to sell non-core businesses and cut costs.
Motorola said Tuesday any potential restructuring is not related to those initiatives already under way.
Any further changes could affect thousands of jobs. The company has about 140,000 employees worldwide.
The company's stock rose 6 percent Tuesday, gaining $3.31 1/4 to close at $60.75 a share on the New York Stock Exchange.
The Journal said operations that build infrastructure products for paging, two-way radio and cellular telephones will be combined into one division. Motorola will also create a separate division for consumer devices such as cellular phones and pagers, the newspaper reported.
The company's big semiconductor operation, which was revamped last year, was expected to remain separate, as would the much smaller automotive and space groups.
Currently, Motorola operates its paging, cellular and two-way radio operations as separate company ``segments,'' each of which has its own infrastructure and consumer sectors. Each segment also has its own technology-development and sales forces.
Last year's sales by the three segments totaled $20.6 billion, out of $29.8 billion in total revenue at Motorola.
The reworking of the three segments would reflect efforts by Christopher Galvin, who became chief executive in 1997, to make his organization less internally combative and more cooperative.