By Wailin Wong | Motorola Inc. may be moving its headquarters to California after its mobile-phone unit splits off to become its own company.
On Tuesday, the Wall Street Journal quoted co-Chief Executive Sanjay
Jha as saying in an interview: “We’ll go where that talent is, and
right now, that looks like California.”
The interview was held last week at Mobile World Congress, an industry show in Spain.
Motorola’s mobile devices business is based in Libertyville, while the corporate headquarters are in Schaumburg. The company was founded in 1928 in Chicago as the Galvin Manufacturing Corp. and remains a major employer of technology talent in the area, despite heavy layoffs in recent years.
Motorola spokeswoman Jennifer Erickson said Tuesday that “we have not announced any plans to make changes to our headquarters and we expect to continue to have a meaningful presence in Chicago.”
Motorola is planning to split into two companies in the first quarter of 2011. Jha will head up mobile devices and the home business, which makes cable television set-top boxes and whose operations are based in Horsham, Pennsylvania.
Co-Chief Executive Greg Brown will lead the other company, consisting of wireless networks and the unit that makes communications gear for government and business clients.
As a former employee of Motorola (corporate, but based in Libertyville at the mobile devices unit), this does not come as a huge shock. If the handset unit were based closer to downtown Chicago, there would be a better reason for that soon-to-be-spun-off business to stay in the Chicago area. However, as it stands, the Libertyville location feels and looks so remote and is simply too tough a draw for top engineering and marketing talent, which is what’s needed to drive that particular business.
So, in that respect, the Bay Area looks like a logical choice for the headquarters of the mobile devices business. My guess is that the mobile devices business will continue to have certain staffing in Chicago at least in the near term and that, eventually, the entire buisness will be located elsewhere.
Meanwhile, it seems that the remainder of the business (the government and enterprise business0 would continue to be heardquartered in Schaumburg and Arlington Heights.
Face it. Illinois is a bad state for employers. Where do we rank? Around the mid-40s! Of course, businesses want to leave. It costs money so they need a couple reasons. The people of Illinois would like to thank Madigan and his Mob for making Illinois such a bad state for business. Oops- that’s the people of California!
The real fact is that Motorola needs fewer engineers in it’s handset unit now. They have out-sourced most of the software design to Google, so their isn’t much left on that side.
The best way for them to downsize is to move the business to California, and shed a few thousand employees along the way. They probably need to be closer to Google, which they are in bed with now. It also puts them a timezone or two closer to their India and China development centers, although that might not matter as much.
Pretty sad that a place like Chicago doesnt have the engineers – or so they say. Motorola was one of our few “cool” companies. Maybe it was cool because it wasnt from California or Tokyo or New York. The brand was a little edgier, a little darker and hipper than the others. I wonder if some of that would be lost by leaving and I wonder if it could be fortified by moving to Downtown Chicago. But Libertyville? No wonder they cant attract talent.
It is tough to get great talent to move to Libertyville. If they stay in Illinois, they need to move to the city. It would be much easier to recruit excellent people for their group. Chances are the top leadership wants to move to California and they are using this as an excuse. They may also be using this so that Illinois will sweeten the deal – California is having a lot of problems of their own right now. However, Illinois and Chicago do not make this a business friendly state. The political leadership worries too much about themselves and how to give money away.
One more point, but I thought that Motorola shot themselves in the foot by not expanding its “MotoCity” office in downtown Chicago. That was a legitimate hub of some of the younger engineering and marketing talent they seek to attract. Another bad move was discontinuing their employee shuttles from the L’ville Metra stop to the Mobile Devices campus. Both moves were aimed at cutting/controlling costs. However, all they did was to further exacerbate their inability to attract top talent. In short, I do think that they could have survived and thrived in Chicago, even despite being a couple of timezones from Google, et al. They simply didn’t create/sustain the environment to let that happen.
Let’s face it, this move has nothing to do with talent or the business and everything to do with where Jha calls home. His house and family are in San Diego, and he currently flies the Motorola jet back every weekend to be with his family. This way it is easier for him and he can be with his old Qualcomm friends.
They abandoned a perfectly good campus in Harvard, IL. Why couldn’t they revamp those buildings? They can’t be more than 10 yrs old.
If its lack of talent move it to downtown Chicago, and get it out of boo foo Libertyville. Jha wants to go back to Cali where he is from and where his family lives now. It is just more corporate selfishness where all he cares about is his own happiness and his own pockets getting bigger! Jha does not care about the lives of the employees this move will effect.
Dan has it right on the nose…it is only about where Mr. Jha wants to live and has nothing to do with the organization…the company I work for is in the same move-rumor boat as Moto right now…we have a new CEO from California whose wife doesn’t like Chicago, so he spends little time at the global headquarters here…we will likely be an LA company within 2 years.
Libertyville or downtown Chicago are fine locations to attract talent. The IT worker pool has aged, and a location like Libertyville is attractive to a more mature pool.
In this economy, attracting talent isn’t that hard anyway. If they want lots of talent, cheap, why not move to the whole thing to India instead of California?
Maybe they just want a tax kickback from the state.
Something like 95% of corporate relocations are to within 5 miles of where the CEO calls home, and it’s usually a done deal. This looks like one of those. No other factors really matter in these cases.
Illinois’ business climate may be challenged by taxes and cost of living, but California is at least as tough. Illinois (and the city of Chicago) have been known to make special favors for companies that relocate within or into Illinois. See: United Airlines (Elk Grove Twp to Downtown), Boeing (from Seattle).
Great idea….does this guy realize he’ll pay as much or MORE for talent than he does here? FREE Lunches, FREE Starbucks, you name it, they get it!!
What a BONE HEAD!! And you wonder why my Motorola stock was sold years ago?
It’s never been a problem with engineering talent that’s caused Motorola’s woes, it’s always been that they’re top heavy with management, and the managers are afraid to make decisions, in case it’s the wrong decision.
This announcement that they intend to move to California because “that’s where the engineering talent is” is a slam on existing Motorola engineers, who’ve build solid products that do what the managers have said they want.
Looks like Sanjay Duh prefers sunny Santa Clara to cold and snowy Chicago. There was no lack of talent when guys like Don Linder, Jim Mikulski, Al Leitich and Roy Richardson staffed and ran the Marty Cooper Toy Factory.
There are benefits beyond a shorter commute for Duh. It’s a great way to restructure his labor costs. Move the few people you pal around with. Symbolically offer a job without moving assistance to expensive senior engineers, and dump the rest for new, cheaper hires out west.
Hey, that’s called “creating value”.
This is a done deal, a total slap in the face, Chicago clearly has the talent to staff Motorola and Illinois as well. This is either a cash grab (corporate welfare) or he just wants to work close to home.