Subject: [NEXTEL-1] Galvin resignation signals new path for Motorola]

From: [email-masked]
Date: Tue, 23 Sep 2003 01:21:46 -0400

Galvin resignation signals new path for Motorola

by Sam Omatseye
Sept. 22, 2003

Having cast his shadow over the company for more than half a decade, the surprise
resignation of Christopher Galvin as chief executive officer of Motorola Inc. has
foisted on the company the challenge of what path to follow.

The appointment of a replacement will not only require a new vision but also a
decision of what parts of the company will hang on and what parts will be
displayed for poaching companies to buy.

Will the company become unrecognizable in a few years, the way Lucent Technologies
Inc. has broken into its current numerous parts? What will it do to its image as a
wireless titan?

Galvin leaves the number two cell-phone maker with no prosperous division, with
its infrastructure and semiconductor divisions limping and bleeding, and fueling
endless speculation about which companies want to buy them. 

Even the cell-phone business, riding higher in market share than other divisions,
is valiantly pursued by companies such as Samsung Electronics and Siemens AG.
Analysts think its glory days are ebbing as the division continues to work at odds
with market trends with products that fail to anticipate demand. It has rolled out
high-end phones when low-end devices will do, and vice versa.

Market optimism about the prospect of a new Motorola post-Galvin led to upswings
of about 6 percent in the company’s stock to about 11.70 a share—still a sharp
contrast to its $20 a share when Galvin assumed the office. This stock profile may
be a bubble as analysts think it depends on what chart the company maps in a
post-Galvin era.

“Given the long history of criticism by investors towards Galvin, we believe this
decision will be viewed as one of the most positive developments of any scenario a
shareholder could imagine,” wrote Albert Lin of AmTech Research in a research
note. “While we found many of Galvin’s actions to be effective and appropriate, we
agree with the criticism that many turnarounds of major companies have been
faster.”

But Galvin’s woes took place in the context of the general telecom market meltdown
that has caused most major vendors to effect leadership quakes. Lucent appointed
Patricia Russo, Nortel Networks Frank Dunn, and L.M. Ericsson Michael Treschow to
steer their ships.

The announcement did not, however, boost other vendor stocks, which have had a
negative day.

Analysts think the resignation will tuck the Galvin family to the background and
help recast the company in less nepotistic terms, a constant motif in past
shareholders’ meetings.

To this point, Motorola has made changes short of the man at the helm.

The infrastructure division has been under speculation to fall into Siemens’ arms,
but it has continued to be denied. The company, chafing under its lack of complete
systems, bought Winphoria Inc., propping up its portfolio for a better competitive
edge. The semiconductor unit has been entering a series of alliances to boost its
standing, yet it has continued to hemorrhage.

The company has not yet appointed a search team to secure a replacement, but
Michael Zafirovsky, chief operating officer, is perceived as the front runner for
the position. 

 http://rcrnews.com/cgi-bin/news.pl?newsId=15180

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