Icahn: Ring the Alarm at Motorola

The Icahn Factor

Like Don Quixote, Icahn often tilts at windmills, but he might be on the right track this time. It isn't about raiding the Motorola treasury of its $10 billion. It's about resuscitating a very proud company that was great not so long ago. The company needs a good blast of oxygen (like those that football players get on the sideline) to get it going and a business plan that makes sense.

The board has done nothing to rein in Zander, who has lost the strong managers Galvin had carefully assembled and has surrounded himself with yes people, thereby stifling creativity and innovation. Then there's his big push to "seamless mobility." Just check out the term's definition below from the Motorola Web site; it's hard to push a company toward realizing a concept that is so poorly defined:

"Simply put, Motorola's vision for Seamless Mobility involves users having easy, uninterrupted access to information, entertainment, communication, monitoring, and control. Motorola is capitalizing on advanced technology to drive this paradigm shift, with a focus on critical technology areas that can enable the Seamless Mobility architecture on both the experience and connectivity level."

Maybe Icahn is what Motorola shareholders are dreaming of when they go to sleep at night. If he's accomplished nothing else, the board might now have been shaken awake.

Even better than Icahn would be Kirk Kerkorian, the true master of restoring luster to damaged companies. Even when Kerkorian makes a rare mistake, he manages to make money, like he did last year with his now-ended foray into General Motors (GM Quote).

This Motorola story is just beginning. There will be many more chapters ahead. With Zander in control, the future is bleak, and I wouldn't want to own the stock. I expect further disappointing results in the first half, which meshes with the company's statements that improvement will be forthcoming later in the year.

But, if Icahn can really stir this pot, there is opportunity if someone up to the task of running a truly global enterprise is found to replace Zander, who appears to be in over his head. If the board takes action swiftly, I would buy the stock. For the moment, we don't own it and are not short, either.