In the wake of a dismal fourth-quarter earnings report, Motorola Inc. decided last week to shed some weight.
It found an excess bulge in its manufacturing plant in the once- dairy town of Harvard, Ill., and announced a plan to skim off 2,500 workers.
Viewing the step as positive, the company says it is part of a long-term, companywide strategy to improve supply chain efficiencies, consolidate manufacturing, im-prove financial performance and build on company strengths.
With plants in North America, Europe and Latin America, the Schaumburg, Ill.-based phone maker will retain about 2,500 employees at the location after it shuts down the Harvard manufacturing operation in June, 2001.
Motorola, which also makes semiconductors, expects to turn the Harvard operations into an order fulfillment center and new product sourcing for Motorola’s Personal Communications Sector. It will also be the base for engineering, marketing and other key functions.
“In 2000, the Harvard manufacturing team lowered production costs and improved quality,” said Mike Zafirovski, president of Motorola PCS.
He said the surplus global capacity at Motorola’s lower cost sites limits its power to manufacture products competitively.
“We are committed to strengthening the Harvard operation’s core competencies,” he said.
The company promises to provide severance and comprehensive outplacement benefits to all eligible employees.
Motorola, which has about 130,000 employees worldwide, has been outflanked as the leading world phone maker by Nokia Inc. and it has been stumbling in the past few years in its efforts maneuver its way back to its premier perch with new initiatives. Instead it has retreated with No.3 Ericsson closing in.
