Will Motorola Rise From the Ashes?

An anonymous reader writes "According to ZDNET the once almighty Motorola is going to split into two companies, 'If the split goes through as planned, what will remain will be the "broadband and mobility solutions" business, which includes enterprise mobility, government and public safety, and Motorola's home and networks divisions.' Engadget claims to have an insider's email that details where it all went wrong, paying particular attention to mismanagement at the highest levels. What makes all of this even more of a shame though is that Motorola's latest product lineup seems to be receiving critical acclaim but with the company in so much termoil, will it ever rise out of the ashes?"

Comments

Critics?

[Anonymous Coward]

...is that Motorola's latest product lineup seems to be receiving critical acclaim

WTF do critics know? It's what the market wants that counts.

Test of time

[arizwebfoot]

Moto has stood the test of time, can't quite see them falling off the radar now.

Re:Test of time

[superstick58]

I'm sure many people felt that way about Bear Stearns not long ago, and there was also this company called Enron that originated in the 30's... A company is not safe from falling apart if it is poorly managed no matter how much history it has.

One thing caught my eye

[antifoidulus]

In researching the myriad claims raised in this letter -- which we believe to be true -- we also discovered a number of other unsettling things about Motorola's corporate past in the last five years, such as certain gross corporate excesses demanded by Zander and his inner circle (like a small fleet of extravagant private jets, where most companies that size might only have one, if any), or the fact that Motorola's current CEO, Greg Brown, is so technologically out of touch he refuses to use a computer for communications, and has all his email correspondences printed by his secretary and replied to by dictation.

The sad thing is that this is way too common in American corporations today. Someone much smarter than I(I think it was in the Economist) remarked that the modern day American CEO doesn't get to the top because they have vision for great products, they get to the top because they are connected and are great at playing financial games. This makes for great short term gains at the expense of any sort of longevity(but by that point the CEO has his golden parachute and is long gone). Carl Icahn also lamented at how woefully out of touch the modern American CEO is, and how much their exorbitant salaries and total lack of accountability and vision make American companies so topheavy they are quickly becoming uncompetitive.

Motorola thought that it could farm everything out and somehow just sit back and reap the benefits of others labor. It was wrong, and yet others are lining up to jump off the same cliff that they leapt from....

Re:One thing caught my eye

[MaWeiTao]

I've gotten the impression that one of the big reasons why American companies run into all these problems is because executives and management all have business or economic degrees. They don't really understand what it is the companies they run do, nor do they seem to care.

That's why we end up with companies like Chrysler hiring the former CEO of Home Depot as their new CEO. What in the hell does a home improvement retailer have to do with an automobile manufacturer? To these people everything is "product". It's an abstraction with no bearing on reality. This why they're so quick to outsource. It's why they're willing to dump obscene amounts of money into marketing instead of research and development. American companies seem to take more pride in "inventing" a brand than they do in producing a real product. Everything always comes off as a gimmick to sucker people into buying their products.

I think Motorola is plagued with the same problem as many other American companies face. They're looking for that one big hit. Instead of following a path of patient improvement and building the overall portfolio they bank everything on a single product. In the process they neglect everything else. When they do come upon something popular they then proceed to milk it to death. The media doesn't help with all their gushing on how the company has turned around their fortunes. They rest on their laurels and when consumers grow tired of the product they find themselves struggling all over again.

I expect Motorola to keep plodding along as they have in recent years. Although, I wouldn't be surprised if they decide to outsource their entire mobile phone business. More than that, they'll dump their design and R&D departments and instead just buy crap hones directly from the Chinese market and rebrand them as Motorolas. The twit responsible for this will be touted as an innovator. Some day the Chinese will realize they don't need American companies and start selling to consumers directly.

When it comes down to it, American companies are quickly turning themselves into nothing more than middlemen. I wouldn't be so bothered by what these CEOs earn if they actually contributed something of substance to these companies. Unfortunately they seem to exist only to make themselves and their shareholders wealthy.

Re:One thing caught my eye

[Have Brain Will Rent]

I can tell you this: after decades contracting in companies from small to enormous, I cannot recall a single project that failed due to lack of technical ability. It was almost always a management problem - whether project management or higher up. So many times I've said something point blank to the effect of "If you do that it will cost you in the end", and watched the heads nod in understanding and agreement. Then they proceed to do exactly what I warned them against. Then later they bitch about "why is this project so expensive" or something similar. I explain why and they don't like hearing it. Too bad.

Most just remember "Project X, cost three times what we were told it would.", they never remember to blame themselves for not paying attention to the advice they paid to receive. Or there are the ones who try to micromanage everything to save money and meanwhile don't put in the effort required to keep the big picture in mind so they lose hundreds to thousands of times as much much as they saved with their micro-managing.

Re:One thing caught my eye

[thanatos_x]

It is almost entirely true. In my view America used to relish competition, because it gave us a chance to show off how great we were. We knew we were better than everyone else, and if anyone else had a problem with that, they could challenge us.

We now seem to be a shell of our former selves. Companies cry to the US Government because of unfair competition, even when most people on the street know what the CEOs don't. The reason why you're doing poorly isn't because the other countries have an unfair advantage, it's because you've adopted myopic views. Profit is created through accounting rather than actual value. Investment in future is disregarded, marketing is key. When you do develop a strategy that works, you take it to the Nth degree, ignoring that the market doesn't need 20 colors for their RAZR or an SUV that can tow a building. It's become all style over substance. Lee Iacocca once ran advertisements for cars of "if you can find a better car, buy it." We need that confidence again, not flags flying in the background and an "American Revolution"

At some point we need to stop this slash and burn style of management, or we will falter. Let's accept that we have competition and we actually need to try, that we can't go on forever simply by chanting "We're so great", we need to shut up and let it be implied by our actions.

For those who want an interesting look at the current situation, spoken better than I can do, I'd refer you to Mr. Iacocca's except from his latest book. http://www.informationclearinghouse.info/article17516.htm

Re:One thing caught my eye

[Orange Crush]

I wouldn't be so bothered by what these CEOs earn if they actually contributed something of substance to these companies. Unfortunately they seem to exist only to make themselves wealthy.

There. Fixed that for you.

Goodbye, Moto

[Anonymous Coward]

What makes all of this even more of a shame though is that Motorola's latest product lineup seems to be receiving critical acclaim

But so what?

In the US market, consumers have taken it as given that whatever interesting features a manufacturer builds into its hardware, the carriers will either disable them outright or make them into carrier-branded pay-per-use features.

Camera? Pseudo-GPS location services? Directions/navigation? Local restaurants? Even something as simple as using your PC's desktop wallpaper as a background image is pay-per-use. Web browser? Nope, pay-per-byte. Music/Video? Nope, browse your carrier's licensed pile of top 40 crap. Better mic/speaker for actually making phone calls? Nope, it's all compressed down to underwater-quality-burbling by the carriers anyway.

This situation isn't unique to Motorola; carrier lockdown has made wireless phones a commodity, and has threatened all manufacturers. What's the difference between a Motorola ABC or a Nokia XYZ when every potential differentiating feature has been disabled by every carrier?

Index tracker funds are the problem

[whoever57]

I am convinced that Index tracker funds are evil.

These funds only attempt to match a particular index, so they have no reason to invest resources to to maximise the profits of companies that they own (or rather, to prevent abuses that reduce stockholder value). Resources to work with companies that they hold cost money and these funds try to match the indix as closely as possible with minimum overhead.

Hence, there are large stockholdings in the hands of entities that really don't care. That's part of the reason boards get away with compensation and benefit packages for execs that are abusive towards the shareholders.

Can't go bankrupt fast enough...

[The Asylum]

For my money, Motorola can't go bankrupt fast enough, and I hope they manage to take Sprint/Nextel down with them when they go. I've suffered through three versions of Motorola's Nextel "ruggedized" phones:

The "i1000 plus" flip phone where the most gentle use would irreparably break the flip cover (which was not available to the service centers as a repair part)

The "i58sr" which had no screws holding its boards together (so required a weekly drop to the floor to reseat the connectors inside) and made such a loud "BEEP" in your ear when Nextel dropped a call (i.e. constantly) that I threw one through a car windshield. I had people across the room turn their heads and say "Ouch" when the thing would make that sound - I suspect it permanently damaged my hearing. Nextel's service people disavowed any knowledge of the beeping, and referred one to Motorola. Motorola said that nobody had ever reported this problem before, but then acknowledged that they had no actual way to know if anyone had ever actually done so, since they had no bug tracking or ticketing system (I used to call in about once a month to see if they'd fixed it yet). Finally a Motorola guy said that it was definitely a problem, but that Nextel had insisted they add the beep to let users know the calls were dropped, then told the service people to lie about it.

The "i315" with a smaller screen than the i58sr, but the same text strings in the firmware (so most of the menu items are wider than the screen and are only visible with line scrolling). The developers seemed to have gone through the firmware and deleted any items which were actually useful, such as "Alarm Clock", while adding a digital unit-to-unit radio which only works if you have the cell phone and walkie-talkie functions _disabled_ - a.k.a. a completely useless feature which never made it to other handset models.

At this point in my life, I wouldn't take a Motorola product - ANY Motorola product - if they paid me to take it - and Nextel has tried repeatedly. (I remember some poor Sprint telemarketer bravely going through her script offering me more and more Motorola junk as I told her more and more how much I despised all things Motorola and Nextel.)

The minute the FIC FreeRunner is available, I'll toss Motorola and Sprint/Nextel to the curb and never look back. And I'm just a _cellphone_ user - imagine the poor police/fire/rescue folks who are stuck with Motorola digital radios which don't work inside buildings, and which automatically deplete their batteries if they also carry a cellphone...

Sales & Revenue, but not the profit

[Rog7]

Motorola still sells more RAZR handsets than the iPhone. The problems are with the executives inability to turn unit sales and revenue into net profit, plus a perceived (likely accurate) lack of vision for the future of all of the pies they have their fingers dipped into.

As soon as losses were reported this year, the stock started its downward spiral. Although frankly, this also reflects modern business that caters to stock more than sustainability (or the comfort of resting on your past success), where any company is only as good as their latest quarter.

It's certainly not the first time a tech company was mismanaged into the ground despite a healthy position in the market.

Re:The Real Motorola Split in the 90s

[Anonymous Coward]

I worked in Motorola's research labs for about 5 years. I've been out of that for the last year and a half.

My experience there was there was a lot of ideas being bounced around, and anytime one idea caught traction, Motorola would pander it around, loose interest, and sell it off to someone else to make a fortune on. Eventually, as Zander came on, Motorola drastically scaled back R&D, shutting down whole divisions doing hard science. Then, it came to pass that all R&D projects had to have a 'buyer' in one of the profit making sectors, which led to a scramble amongst the engineers. Suddenly folks were backstabbing one another to try to get a project that GEMS or mobile devices wanted done. I once tried to get the specs on a product that we were supposedly trying to hawk to consumers so I could extend the functionality, only to be ignored or strung out waiting for info. The constant 'fires' I had to put out just to get work done were grating.

I'm not surprised in the least about all this. The writing was on the wall when SPS split off into Freescale. Motorola just refuses to leverage any core competency at all. It's all about being tragically super cool to sell products.

I think mobile devices will tank unless they get someone in there to beat it into shape. GEMS, or what's left of Motorola now, will hang in only because they already have massive infrastructure for gov't and etc. If someone else got into this market, Motorola would be gone.

Re:Brilliant Roll Model

[JamesP]

I prefer putting the blame on ClearCase...

Re:Management and Leadership

[demachina]

"The management and executives at Motorola are, and were, incompetent losers, and that's the label they carry and the price that they pay for those golden parachutes.

When you have $100 million in the bank I'm pretty sure you really don't care what label you have to wear. That is the fundamental problem with the current system. Most execs, especially in America, are just looking for the big score to get their FU money. They will do anything to get it including completely cratering the company they are running. There are people like Jobs, Ellison and even Gates who are/were looking to build sustainable empires, but most execs are just climbing the ladder until they make the big score and they could care less what kind of devastation they leave in their wakes or what people think of them after. If they can milk some underlings and be successful and get even richer they will but if they actually have to be smart and work hard to succeed.... why should they, they know they will still be rich when they get cashed out so why not just be a jet setter, party and screw the pooch.

The preventive measure against this is supposed to be a board of directors who keeps an eye on the execs and make sure they do the right thing for the long term health of the company and shareholders. But most boards are now so incestuous that they are just there to not make waves and get as much FU money out of the deal too. If you get all your friends on your board and you serve on their boards you develop a system where there is no accountability. At the end of the day its only big shareholders like Icahn who have huge stakes in the company that can enforce any accountability. Unfortunately its really hard for someone with a 5 or 10 percent of the stock to do anything unless shareholders band together and elect new boards. The only problem is shareholders aren't really interested in the well being of the company either, they often just want to pop the stock price so they can cash out and make some more FU money.

The only really good companies are the ones built from scratch where the executives are the same people who risked everything and worked hard to make a company out of nothing, are huge shareholders, and to whom the company is something they built and cherish. They wont do stupid, destructive things because they have their skin in the game. Its the rock star CEO's that are the cancer. They walk in the door and are handed huge stakes in companies that they did nothing to build and nothing to earn. They could care less if they destroy it as long as they cash about before it craters.

Re:The Real Motorola Split in the 90s

[squiggleslash]

This wouldn't be Slashdot without a minor nit-pick: Apple went with Motorola chips later in their life, but until the late eighties most of their CPU choices were from Commodore (specifically their MOSTEK subdivision), with variants of the 6502 used for the Apple I, II, III, and the various successors to the Apple II (IIe, IIc, GS, etc.) Only the Lisa and Apple Macintosh had Motorola CPUs.

I "learned" assembler on a Z80A and then learned assembler on a 6809 via the Dragon 32 CoCo clone. Amazing chip, an 8-bit CPU you could write elegant, structured, code on. The 68000 continued in that tradition: it was clean, well designed, elegant, and absolutely what the world should have switched to: so the world went with the x86 design instead. Because the world sucks.

The slow sad decline of Motorola

[timholman]

I was working in Arizona several years back, and attended several corporate presentations by Motorola. Once I flew up to Schaumburg for a day-long event where Motorola was trumpeting their "rebirth" just after the Freescale spinoff. The other attendees and I had some interesting conversations about the future of Motorola. We were all pretty pessimistic about the company's outlook.

Personally, I think that the Six Sigma movement was what started Motorola down the road to ruin. The entire management structure became fixated on playing the Six Sigma game, and lost sight of actually watching the competition or designing new products. Six Sigma became the perfect management circle-jerk. As the digital revolution in cell phones began, and cell phone networks spread throughout the third world, Motorola management was too busy computing error statistics for Six Sigma presentations to realize that their product line and the planned Iridium satellite system were already obsolete.

One event in particular sticks in my mind from the Schaumburg visit. During one presentation, a Motorola manager showed an org chart of the "old" Motorola, and then an org chart of the "new" Motorola, and assured everyone that Motorola was going to be back at the forefront of communications technology in short order thanks to the new corporate reorganization. The problem was that if you took the old org chart and rotated it 90 degrees, it looked exactly like the new one. Everyone I was with had a good laugh about that on the way back to the airport.