Schaumberg, Ill.-based cell-phone giant Motorola Inc. may be looking to offload its 5,000-employee automotive products unit, according to the Wall Street Journal on Thursday.

Motorola has apparently hired J.P. Morgan Chase & Co. to pursue the possible sale, which would likely generate strong interest from private-equity buyers who may pay $1 billion to $2 billion for it, the report also said.

The automotive unit manufactures telematics products used for vehicle navigation and safety services, as well as sensors used in steering, braking, and power doors and windows. It generated $1.68 billion in sales last year, or about 5 percent of the company's total.

However, this business unit is overshadowed by Motorola’s largest division – the phone handset business, which accounted for more than half of the company $31.3 billion revenue last year, ranking second in the world behind Finland-based Nokia Corp. Additionally, results have been weak with its automotive-supply customers struggling and cutting spending in response to higher costs and lower vehicle production.

Reported interest in the unit’s sale comes less than a year after Motorola under CEO Ed Zander completed the spinoff of its semiconductor division, which had been its second-largest business, combined with financial turmoil in the auto-parts sector – squeezed between rising costs, lower vehicle production and cost-cutting by customers.

By: DocMemory
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