The proposed breakup of Motorola into two companies just doesn’t make any sense. Here’s my thinking:
–It’s just crazy for a board to cave in to someone like Carl Icahn. He doesn’t have the long-term interests of anyone in mind other than his own, and his is a short-term gain to his holding of Motorola shares. In the face of such a blatant greenmailer, doesn’t the Motorola board have any backbone? This should be a time when a board defends its CEO and his or her business plan (assuming that the CEO has a credible plan.)
–The logic of spinning off the cell-phone business from the rest of Motorola’s operations seems to be that a separately traded public company will attract a new chief executive officer who can put the unit on the path toward sustained profitability. But that begs the question–why can’t existing Motorola management, led by CEO Greg Brown, do it? If they can’t do it, then the board should jettison the whole lot of them.
–Another problem with the logic is this: by spinning off the cell-phone business into a separate company, Motorola is signalling its lack of confidence in the business. So why would any smart business executive want to take the leap into a business that’s in a downward spiral. Only someone with a sado-masochistic complex would want that job.
–My last problem is that the cell-phone business must have crucial ltechnological inks with the wireless network equipment, public-safety radios and hand-held bar-code scanners that the company makes. By getting rid of the cell-phone business, it seems to me that Motorola is taking the risk that its remaining businesses will be adversely affected by the absence of the cell-phone business.
Does anyone else think this is nuts? Can anyone defend it?
