Less than a week after pledging more cost-cutting in 2001, Motorola Inc. (Harvard, IL) announced that it plans to cease cellular phone manufacturing operations at its Harvard campus, resulting in the elimination of some 2,500 jobs, or half the Harvard workforce. The Harvard facility was Motorola's only US cellular phone manufacturing facility. The remaining half of employees at the facility will shift their focus to research and development, as well as marketing and customer orders. Competitive severance and comprehensive outplacement benefits will be provided to eligible employees, which represent nearly two percent of Motorola's worldwide work force.
Motorola, which is the world's second largest maker of mobile phones, reports that the shutdown is expected to take place by June 30, 2001. A company executive stated that the Harvard operation was the costliest of Motorola's six facilities worldwide, and that this move by Motorola is part of a strategy to outsource more jobs, concentrate on fewer phone models and make cellular phone manufacturing operations more efficient.
“In 2000, the Harvard manufacturing team lowered production costs and improved quality," said Mike Zafirovski, president of Motorola PCS. “But we cannot competitively manufacture products when there is surplus global capacity at Motorola's lower-cost sites."
The recent reduction in Motorola's workforce follows an announcement six weeks ago that, as part of the greater emphasis on outsourcing, the company was eliminating 2,870 jobs in Iowa, Florida and Ireland.
