December 16, 2003 10:04 AM PST

Former Sun exec takes Motorola helm

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Communications conglomerate Motorola announced Tuesday that former Sun Microsystems President Ed Zander will be Motorola's next chairman and chief executive officer.

Elected unanimously by Motorola's board of directors, Zander will take the helm on Jan. 5, replacing Christopher Galvin, whose grandfather founded the company. Galvin said in September that he was leaving his post because of differences with other executives over Motorola's future. Zander left Sun in 2002 and has been a partner at private equity firm Silver Lake Partners, which specializes in technology.

During a conference call with investors, John Pepper, head of the search committee, said Motorola President Mike Zafirovski had been a strong candidate from the beginning but that the board ultimately went with Zander.

"We found in Ed someone who brings a wealth of knowledge, a range in experience and an ability to inspire," Pepper said.

Zander showered Zafirovski with praise for his knowledge of the company and the industry and said he expects to rely on Zafirovski as he gets familiar with his new role. He also said he anticipates that the two of them will work closely as a team.

"I would love to see the two of us drive this company. There's a lot of work ahead, and I can easily see how this is a two-man job," Zander said.

"We are accomplished executives...We will go to charm school and sit in a hot tub and figure out what we like about each other."
--New Motorola CEO Ed Zander
on working with his rival for
the spot, Mike Zafirovski
Zafirovski had been very open about his ambitions for the CEO position throughout the selection process.

"I was very disappointed when I first heard," Zafirovski said. "But at the same time, I looked at the wealth of Ed's experience, and I was impressed with the five-member search committee. I know how hard they worked to find someone."

Zafirovski, who had worked at General Electric, has been with Motorola for three years. During that time, the company has returned to profitability. But analysts point out that Motorola has recently missed delivery deadlines on some of its products.

"I think the board may have held Mike accountable for some of this," said Paul Sagawa, an equities analyst with Sanford Bernstein. "Ed is a well-known person and well regarded throughout the industry. He's been on the short list of CEO candidates for almost every hi-tech company for the last two or three years."

When asked about any possible tension between the two executives, Zander said: "We are accomplished executives. Mike and I have been in this position before. I think everyone's making too much of this...We will go to charm school and sit in a hot tub and figure out what we like about each other."

Zander has a tough job ahead of him. Motorola has been grappling with layoffs and shrinking margins in many of its businesses. In October, the company announced plans to spin off its chip unit. Despite improvements in the balance sheet, Motorola is still trying to catch up with a lot of its rivals.

"I don't consider this a turnaround," Zander said. "Motorola is making money; it has a strong balance sheet. But, yes, there is some competition. And, yes, we are not performing as well as we'd like. We need better execution...We have to work hard every day to do the job we want."

Motorola's stock was trading up 26 cents, or 2.03 percent, at $13.05 Tuesday morning.

CNET News.com's Richard Shim contributed to this report.

 

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