Motorola moves ahead with new president-COO after surprise resignation
Motorola, which these days always seems to be en route to some point of restructuring, yesterday was forced to quickly veer off its previously set course when President and COO Ed Breen unexpectedly resigned to become chairman and CEO of trouble electronics conglomerate Tyco International.
Breen’s resignation apparently caught Motorola by surprise, although the company recovered and elevated Mike Zafirovski from president of its cell phone-based Personal Communications Sector. There was, however, a brief period during which Chairman and CEO Christopher Galvin assumed Breen’s duties.
“We were unable to get Tyco’s full cooperation on the timing of the events, therefore our board meeting [to confirm Zafirovski] was taking place when they released their press release,” Galvin explained during a conference call this morning. “We had to, based on SEC regulations, also release a press release.”
Once the board confirmed Zafirovski, things settled into place for the second time in nine months when Breen first won “kind of by a nose” the president and COO spot, Galvin said, due to his background as “superb cable executive” with over 20 years experience climbing the corporate ladder at leading cable vendor General Instrument, eventually becoming chairman and CEO. Motorola acquired GI in late 2000, and Breen began a similar climb up the Motorola ladder. Breen’s experience dealing with Wall Street types “probably caused [the decision] to be tipped a little bit” in his favor, Galvin said.
Zafirovski had been a competing candidate, thus, when it came time to replace Breen, the board knew all about him.
“[The board] had vetted, or analyzed, both candidates very closely only nine months before,” said Galvin. “We had this in our emergency leadership supply planning system, and we simply put it in action off the plan.”
Breen, who was unavailable for comment, was quoted in a Tyco press release calling the new position the “opportunity of a lifetime.”
That lifetime could be considerably shortened if things don’t improve at the Bermuda-headquartered company. Immediately before announcing Breen’s appointment, Tyco executives made a special conference call to squelch “rumors” that the company was on the verge of bankruptcy. Tyco, which calls itself “the world’s leading manufacturer of electrical and electronic components; world’s largest designer, manufacturer, installer and servicer of undersea telecommunications; the world’s largest manufacturer, installer and provider of fire protection systems and electronic security system; and the world’s largest manufacturer of specialty valves,” has been rocked by an investigation of company financial dealings related to the departure of former chief executive Dennis Kozlowski nearly two months ago.
Zafirovski steps into a more stable position, with two years management experience in the cell group and 14 years’ management experience in a 24-year career at General Electric. His first challenges will probably be in the personnel space – finding his replacement in the cell phone group and holding onto the management group that worked under Breen.
“Certainly we’re going to work very hard to retain all good employees with a most particular emphasis on the so-called most effective 20,” he said during a conference call this morning. “The open position is certainly greater opportunity to upgrade. We have at least two or three people within PCS, and we’ll be looking at other talents from other parts of Motorola.”
The other challenge will be keeping Motorola’s diverse operating units – including a semiconductor business that has been hammered with the rest of the chip space – in line as the company’s telecommunications business space continues to roil.
“We’re having positive success with [the semiconductor] business right now with its restructuring,” said Galvin. “That continues right now, despite all the news related to other semiconductor business.”
Galvin expects Zafirovski to hang around longer than Breen, although he jokingly suggested that the company’s “leadership supply system” might be a little too successful.
“We made a huge effort to invent a new leadership supply system, adapting it from GE,” said Galvin. “GE has been a supplier of talent to the world because they have such a marvelous system. I didn’t think our system would be so good we’d be supplying the talent this early in our transition.”
Galvin declined to speculate on why Breen would bolt.
“You have to have him describe what he thought was the opportunity in the next place financially and/or to try to manage that turnaround,” Galvin said. “We have to let that play itself out. We’re delighted that Mike is here, and we won’t miss a step.”