Motorola CEO stepping down - East Valley Tribune: Business

Motorola CEO stepping down

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Posted: Saturday, September 20, 2003 6:18 am | Updated: 1:42 pm, Thu Oct 6, 2011.

CHICAGO - Christopher Galvin resigned Friday as chairman and chief executive of struggling Motorola, ending an often-rocky six years at the helm of the telecommunications giant his grandfather founded 75 years ago.

Galvin, 53, cited differences with the board over the progress of the stalled turnaround at the world’s No. 2 cell-phone manufacturer, which also is a top semiconductor maker. He has agreed to stay on until a successor is named, the company said.

The unexpected lateafternoon announcement sent Motorola’s stock 5 percent higher in afterhours trading fo llowing a regular session in which it closed down 4 cents at $11.09 a share on the New York Stock Exchange. The stock reached a peak of more than $60 a share in 2000.

Motorola, which sold more than half the world’s cell phones in the early ’90s, has fallen far behind Finland’s Nokia and has been struggling to regain its past dominance. A huge restructuring and cost-slashing effort returned it to profitability in 2002 after two years of losses. But a slowed economy and sluggish industrywide demand have stymied its recovery.

Although analysts and investors have called in the past for Galvin’s resignation, the company characterized Galvin’s departure as a retirement and said the decision was his alone and was not precipitated by any particular development.

Spokeswoman Jennifer We y rauch said Galvin informed directors in a 4:30 a.m. Arizona time conference call Friday, two days after a regular board meeting.

He has held the two top posts since 1997 and has been with Motorola for 36 years.

‘‘While I have achieved substantial results, the board and I do not share the same view of the company’s pace, strategy and progress at this stage of the turnaround,’’ Galvin said in a statement released by the Schaumburg, Ill.-based company. ‘‘Accordingly, it is time for me to pass the baton to new leadership.

‘‘I leave my successor with a formidable Motorola platform compared to three years ago, before I implemented my five-point turnaround plan.’’

The board’s presiding director, John Pepper Jr., did not address any strategic differences in a statement distributed by the company.

Pepper said Motorola has significantly strengthened its balance sheet and returned to profitability recently under Galvin, whom he said also has put a strong new management team in place.

‘‘The board supports Chris Galvin’s decision to retire and appreciates his commitment to a successful transition while the board begins its internal and external search for a new chairman and CEO,’’ he said.

The leading candidate could be Mike Zafirovski, whose performance as president and chief operating officer has been praised since he took over last year when Edward Breen left to take the helm at Tyco International Ltd.

Pepper heads the search committee, which also includes Motorola directors Indra Nooyi, Sam Scott, Larry Fuller and Sandy Warner.

Galvin was not available for further comment.

Motorola and other tech companies have been severely tested recently by a series of challenges — a recession, the telecom bust, global slowdown, semiconductor slump and SARS, all of which drove down demand in its main two businesses.

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