by
Roger O. Crockett
The board of directors at troubled Motorola Inc. has begun exploring options for the succession of embattled Chief Executive Edward J. Zander, BusinessWeek
has learned. The board met with at least one outside executive, former
MCI chief Michael D. Capellas, to discuss leadership roles at the
company, including the possibility of his stepping into the CEO's shoes
at some time in the future, though nothing came of it. Another
possibility is that the board could eventually elevate current Chief
Operating Officer Greg Brown.
That means that when the directors gather for their next meeting,
expected to take place later this month, they'll have major issues to
take on. The company had scheduled its annual analyst meeting for July
23 but then postponed it until September—leading to speculation
from analysts that the board might be looking for a new CEO. According
to two sources with knowledge of the board's actions, Zander and two
directors met with Capellas to discuss options for joining the company.
Capellas has since agreed to take the top post at First Data Corp. (FDC)
when private equity firm Kohlberg Kravis Roberts & Co.'s
acquisition of the company takes effect later this year. Motorola (MOT) and Capellas declined to comment.Mounting Pressures
While Zander's job may be secure for the moment, he and the board are
under intense pressure to set Motorola on a new course. The Schaumburg
(Ill.) tech giant had always held the No. 1 or No. 2 spot among the
world's mobile-phone handset makers, but Samsung Corp., which had been
No. 3, overtook Motorola in market share during the second quarter,
according to Cowen & Co. Even more troublesome, on July 11,
Motorola warned that second-quarter sales were $8.6 billion to $8.7
billion, down from an earlier forecast of $9.4 billion, and that
continuing operations had a loss of 2¢ to 4¢ a share. A
comparison with the company's performance a year earlier is stark: In
the first half of last year, the handset business earned $1.5 billion
in operating profit. This year, analysts now expect the unit to suffer
a $519 million loss. The company was to announce its second-quarter
results on July 19.Motorola's fortunes have soared and then sunk since Zander's
arrival. At first, lifted by sizzling sales of its ultrathin Razr
handset, the company did well. But the boom times didn't last. Motorola
has now missed analysts' forecasts four quarters in a row. Some
investors say Zander has already run out of time and are calling for
his removal. "If I were on the board, I would put him in a cubicle and
pay him his [salary] and make him sit there," rails Joan E. Lappin,
chairman of Gramercy Capital Management Corp., a Motorola investor who
has long been at odds with Zander and the board.The Internal Candidate
At Motorola's next board meeting, it's likely that COO Brown will be
named to the board, says one source who has spoken recently to a board
member. One scenario, says this source, is for Brown to eventually
succeed Zander. Brown came to Motorola in 2003 from Micromuse Inc. (IBM),
a network management software company, where he was chief executive. He
ran several businesses at Motorola before being promoted to COO earlier
this year. This source speculates that Brown could take the chief's
chair as soon as the end of this year, while Zander would move into the
role of chairman. Board members could not be reached for comment.Some analysts knock Brown because he hasn't had much experience with
the company's bread-and-butter handset business. With that unit in so
much trouble, they doubt he's equipped to handle a turnaround.
--------------------------------------------------------------------------
Distributed by Hasan Shrek, independence blogger. Also run online business , matrix, internet marketing solution , online store script .
Beside he is writing some others blogs for notebook computer , computer training , computer software and personal computer
--------------------------------------------------------------------------
Technorati Tags: Motorolla, Mobile
No comments:
Post a Comment