AMD CEO's Shoddy Record Taints Turnaround

"We need to learn our markets and customers better, not learn semiconductor manufacturing better," Ruiz was quoted saying in an internal company publication at the time, declaring that the changes would position Motorola to reclaim its title as the world's No. 1 chipmaker.

Not long after becoming president of Motorola's Semiconductor Product Sector, or SPS, Ruiz unveiled a sweeping reorganization plan, which made everything from microcontroller chips to digital signal processors. Under Ruiz's plan, Motorola's chip group was split into four separate units, with each focused on a different market such as networking and computing, transportation and wireless. A new management team was put in place to lead the various groups.

The makeover was much more than cosmetic, altering job duties and reporting structures long etched into the organization.

But according to one former Motorola employee who worked as a financial analyst within the chip group, the reorganization, which Ruiz devised with the help of a university professor, created more inefficiencies than improvements.

"Where you may have been an expert on microcontrollers, now all of a sudden you had to be an expert on microcontrollers and six other products that were all sold to the automotive market," says the former employee, who says the new scheme turned product engineers into generalists and ultimately contributed to a loss of market share.

Instead of picking up, chip sales declined under the new plan, and the semiconductor group was soon losing money. Within 18 months, one of Ruiz's original four business groups was disbanded, and two new groups were created.