Motorola automotive for sale, source says

Hires JPMorgan Chase to find a buyer for a division that pulled in $1.68 billion last year.

Michael Singer
Michael Singer Staff Writer, CNET News.com
Motorola may be selling its 5,000-employee automotive-products unit, according to a report. The Schaumburg, Ill.-based company has hired JPMorgan Chase to find a potential buyer for the division, which could fetch somewhere between $1 billion and $2 billion, according to a report published in the Wall Street Journal on Thursday.

Motorola spokesman Jeff Madsen declined to comment on a potential sale.

Motorola's automotive unit makes telematics systems (in-car communications) used in GM's OnStar vehicle navigation systems, as well as sensors used in steering, braking, and power doors and windows. The company also makes under-the-hood controllers, including sensors that alert drivers to oil pressure problems.

GM, Ford and DaimlerChrysler are three of Motorola's largest automotive contracts, Madsen said.

Motorola's automotive group reported revenues of $1.68 billion in 2004 as a part of Motorola's $31.3 billion total revenue last year.

Madsen said sales for the automotive division in the first quarter were down due to softer sales by North American automobile manufacturers. Second-quarter sales were also down, but only slightly compared with sales in 2004.

Profitability for Motorola's automobile division is improving. While Madsen said the group did not post a first-quarter profit in 2005, profit in the second quarter stabilized.

Shares of Motorola closed down 20 cents, or less than 1 percent, at $23.67 on the New York Stock Exchange.