Motorola Mute about Sale of Automotive Unit

By Kukec, Anna Marie | Daily Herald (Arlington Heights, IL), September 16, 2005 | Go to article overview
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Motorola Mute about Sale of Automotive Unit

Kukec, Anna Marie, Daily Herald (Arlington Heights, IL)

Byline: Anna Marie Kukec Daily Herald Business Writer

Motorola Inc.' s struggling automotive electronics unit - one of its oldest businesses - has returned to profitability this year.

Does that mean it's ripe to sell? Yes, analysts said Thursday, reacting to an unconfirmed report that it's for sale.

"Their main business is cellular handsets and that is a business I expect them to focus on," said independent communications analyst Jeff Kagan. "If they are going to sell something, I'd say it's because performance is disappointing."

The Schaumburg-based unit makes and sells automotive electronics and telematics systems for communications and safety features inside cars from companies such as General Motors, Mercedes-Benz, BMW and Jaguar. It has lost money during the overall auto industry downturn. And that led Motorola to streamline and cut about 250 of its 5,000 global employees this year.

Analysts weren't surprised Thursday when The Wall Street Journal, citing unnamed sources, reported that Motorola hired J.P. Morgan Chase & Co. to sell the unit, possibly for as much as $2 billion.

Motorola and J.P. Morgan spokesmen declined to comment on any potential sale.

In fact, Motorola said Thursday it's business as usual, especially since the unit is part of its ongoing mantra for seamless mobility, where all devices work together.

"Since the first quarter, Motorola has been constantly assessing ways to enhance the strategy of the automotive business, strengthen its competitive position and improve its cost structure," said Motorola spokesman Jeff Madsen.

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