Get Profitable Or Get Sold (8/22/01)

We all know that Motorola has been "troubled" for the past year or so, what with the thousands of layoffs, the plant closings, its first quarterly loss in years, and the sale of hundreds of lower-echelon employees to human toxicity testing labs and pet food companies in order to raise some quick cash. (Okay, that last one is apocryphal, but if it's not true yet, wait a few more months; if things keep going at this rate, Rover will be feasting on Dog Chow "Now With More Secretary And Janitor-y Goodness!" before you know it.) Most recently, analysts have taken to suggesting that Motorola sell off its semiconductor business in order to focus on mobile phones and returning to profitability. Motorola, however, wouldn't hear of it; making chips is one of its "core businesses," it has steadfastly maintained.

Until now, that is. As faithful viewer Andrew pointed out, Motorola is hedging a little, and has softened its stance of "you'll take our semiconductor unit when you pry it from our cold, dead, red ink-stained fingers" just a smidge; a Reuters article reports that Motorola's president recently told a pack of analysts that unless the company's chip business can shape up within an unspecified time period, "the board and senior management would consider a sale or spinoff of the business." (If this event ever comes to pass, we recommend that Motorola change its name to "Just Phones." It's snappier, right?)

In fact, according to Motorola, this is less of a flip-flop than a clarification of its existing stance, which was simply misunderstood; "there are no sacred cows here... the present level of financial performance of [the semiconductor business] cannot be tolerated." Woo, harsh words indeed. We suspect that these statements are as much to light a fire under the chip unit's butt as they are to assure the analysts that money-losing business units will be mercilessly cut in order to Maximize Shareholder Value. It's a cruel and vicious game, to be sure, but hey, that's business.

So what does this mean to those of you banking on Apple buying up Motorola's PowerPC assets? Well, put it in neutral, folks, because analysts expect that Motorola's internal deadline for turning the chip business around is "a three-to-five year time frame," which isn't exactly the speed of light. Plus, if Motorola does put the entire chip business up for sale, at least one analyst figures it would cost about $9 billion-- Apple has a lot of cash, yes, but not that much. So the best we can hope for is that Motorola decides to sell off the business in chunks, and that Apple can score a sweet deal on the rights to the PowerPC alone. Would Motorola be receptive to such an offer? Heck, anything to keep the rest of the support staff from winding up in the Meow Mix, right?

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The above scene was taken from the 8/22/01 episode:

August 22, 2001: Motorola backpedals slightly and announces that if its chip business doesn't pick up, it's bye-bye semiconductors. Meanwhile, Apple beats us to an Emmy (which it's winning for creating FireWire), and our fevered dreams suggest that non-education customers might want to wait a couple of days before buying a new PowerBook...

Other scenes from that episode:

  • 3258: I'd Like To Thank My Agent... (8/22/01)   Okay, this is getting ridiculous. It's bad enough that Buffy couldn't score an Emmy nomination for "The Body," which was easily one of the most powerful hours of television ever to hit us in the chest like an emotional freight train...

  • 3259: Someone Pass The Maalox (8/22/01)   It figures that we'd have to learn the hard way. Food Safety Rule Number One: if you find takeout Chinese food in the back of the fridge that's so old you can't even remember ordering it, don't eat it...

Or view the entire episode as originally broadcast...

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