More ominous news today from Motorola, the once-great Chicago electronics company. The Chicago Tribune reports that “[f]inancially stressed Motorola disclosed plans to cut costs by cutting the pay of its co-CEOs and freezing its U.S. pension plans and ending its practice of matching employees' 401(k) contributions. The company didn't spell out how much money it expects to save from what it characterized as "difficult but necessary steps." (link).Co-CEOs! Yes, the residue of an earlier plan to have a CEO firmly in place of a part of the company intended to be spun-off. But the spin off was torpedoed by this year’s market turmoil. So now at perhaps the most perilous time in the history of a company that has suffered from weak and erratic management, it has co-CEOs.
Long a leading innovator in electronics, Motorola has been on a long slide, temporarily interrupted a while back by the now-passed fleeting success of its Razr cellphone. It has been hard to witness this -- the slow decline of yet another storied Chicago technology company. Zenith is already gone, its name living on as a slap-on brand for a few items manufactured by Korean giant LG.
In the end, cases like this usually come down to management failure, played out over many years. I always wonder what the directors on the board think, year after year, as they witness the decline. They approve plans that fail, one after another. Executives come and go. Competitors pass it by. And the board goes on.
I recall hearing in the last year or two one particular trader say on CNBC, on a couple of different occasions, that he thought Motorola has been and continues to be one of the worst managed technology companies in the US.
Here's a comment posted by “flyersmith” to coverage of this latest Motorola story by suburban Chicago’s Daily Herald (link), whose northwest suburban market area is home to Motorola and most of its headquarters employees; its terse derision barely hides the anger that so many must feel:
Another Chicago bellwether company being run into the ground. They had the world at their fingertips with the explosion of the wireless world in 1988-92 era. Their business decisions, not invented here attitude, empire building culture, and promotion by seniority policies of the past two decades have these guys at death's door as an independent company.
Somebody is going to buy them up, keep the trademarks, and brands and a few key employees...and then gut the rest. The history of the last quarter century of Motorola will be well known in MBA schools about what not to do.
Richard Balsamo
