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Motorola feels Ichan squeeze as execs bail out

Posted: 12 Mar 2008 ?? ?Print Version ?Bookmark and Share

Keywords:Icahn takeover? Motorola? mobile handset?

New Motorola Inc. CEO Greg Brown is facing a new exodus of top executives even as billionaire investor Carl Icahn increases pressure to break up the company and sell off the pieces.

Brown wants to sell off pieces of the company, too, but it's unclear whether anyone wants to pay what Brown and Icahn think they are worth. Nokia, Samsung and LG Electronicsall gaining handset market share on Motorolahave said they aren't interested.

The once-glamorous mobile phone device market now seems to be overcrowded. Last week, Mitsubishi said it would dispose of its unprofitable mobile-phone business and in January, Sanyo Electric, too, said it will leave the mobile phone business.

Leaving execs
Motorola announced Mar. 7 that Stu Reed, who had been in charge of Motorola's mobile devices unit, would leave the company "effective immediately." Last month, Brown had taken over direct control of the Mobile Devices unit from Reed, who had run the operation for just a few months well after Motorola's handset market share began declining.

Just days before Reed's departure, it was revealed that the company's top marketing leader, Kenneth "Casey" Keller, had left the firm.

Fighting on
Motorola has formed a partnership with Qualcomm Inc. to develop future mobile phone technologies for service providers and it has been in talks with Nortel Networks to form a partnership on wireless infrastructure technologies that would be run by Nortel.

Motorola is now girding for a proxy battle at its May 5 annual meeting with Icahn, who has proposed a slate of candidates for Motorola's board. Icahn's candidates are: Frank Biondi Jr., former Viacom executive; William Hambrecht of the eponymous investment banking firm; MIT professor Lionel Kimerling; and Keith Meister, an executive at Icahn's funds. Icahn recently raised his stake in Motorola to 6.5 percent.

Icahn lost a proxy fight last year when CEO Ed Zander was at the helm of Motorola. At a meeting of equity investors in New York last week, Icahn said he still likes Motorola as an investment, according to a Wall Street Journal report. "We just like it," said Icahn. "It's extremely cheap. Everything they can do wrong, they did it wrong... The rest of the company is doing darn well."

- W. David Gardner

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