Motorola Taps Former AT&T CEO as Chairman

Motorola has selected David Dorman, a former AT&T chief executive, as its non-executive chairman.

Motorola, which has experienced a market share loss in the smartphone business in competition with rivals like Nokia and Apple, recently announced a plan to break into two independent publicly traded companies.

The appointment of Dorman came two days after Motorola settled a proxy battle with its largest individual investor, Carl Icahn, by agreeing to give two of his candidates seats on the company’s board.

Three Decades in the Business

Dorman, 54, became president of AT&T in December 2000 and served as the firm’s chairman and chief executive officer between 2002 and 2005. He has 28 years in the telecommunications business, including stints as chief executive officer of Concert Communications Services, the global venture created by AT&T and British Telecommunications, from 1999 to 2000; as chairman, president and chief executive officer of Pacific Bell from 1994 until its acquisition by SBC Communications in 1997; and executive vice president of SBC until January 2008.

Dorman started his career in telecommunications at Sprint in 1980, serving in various capacities that culminated with a Sprint Business president post in 1994.

“He’s been key in terms of consolidating the industry,” CRT Capital Group analyst Ashok Kumar told the E-Commerce Times.

Dorman is due to take over as Motorola’s chairman May 5, after Ed Zander retires from the post.

‘Ideally Suited’ for the Role

“Dave is ideally suited to serve as Motorola’s chairman, and I am confident that our shareholders will continue to benefit from his industry knowledge and deep understanding of the company,” said Greg Brown, president and chief executive officer of Motorola.

Motorola has struggled in the competitive mobile phone field for most of the last two years, as it failed to keep up with rivals by following up on its success with the Razr smartphone.

Brown, who replaced Zander as CEO in January, announced in March that the company would separate its handset unit from its other operations as a way to stem its losses in the marketplace.

“Motorola has tremendous assets and talented people, and I am confident in the actions Greg Brown, our management team and board are taking,” Dorman said. “I look forward to taking on this new and exciting role and to working closely with Greg, the board and the senior management team to enhance value for all Motorola shareholders.”

A phone call to Motorola for additional comment was not returned.

A Crucial Step

Motorola’s choice of Dorman makes sense, noted CRT’s Kumar. “It’s likely they will tap the executive suite of the other carriers for the CEO of their mobile group, and this is a step in that direction.”

However, finding a candidate from a corporate culture similar to that of Motorola will be crucial, Kumar noted. “It’s unlikely they’ll penetrate the executive suite at Nokia because it’s a different culture. The best chance for them is to identify a candidate from one of the domestic companies. That will be instrumental in rebuilding the rest of the team because there has been a significant leakage of talent there the last few quarters.”

Dorman is currently a managing director and senior adviser at Warburg Pincus and Co., and serves on the boards of CVS, Yum Brands and the Georgia Tech Foundation.

Motorola shares traded at US$9.45 Wednesday morning on the New York Stock Exchange. The stock had a 52-week range of $8.98 and $19.68.

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