From thestreet.com Cramer said it all here
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Wrong! Rear Echelon Revelations: What Motorola Should Have Said
By James J. Cramer
6/5/98 7:55 AM ET
Oh, I get it. Once again, it's Asia that's hurting Motorola (MOT:NYSE). Handset sales aren't coming through because of the poor economies over there. And semiconductors? Well, of course there is a slowdown. Telephone equipment -- oh, yeah, tough business, with everybody feeling the pinch, especially in world-wide wireless. Guess we got to sell everybody from Lucent (LU:NYSE) to Ericsson (ERICY:NYSE ADR) on this news. Should send all of tech down.
Hold it!! Wait just one darn minute. Can we take a moment and peer through Motorola's litany of excuses and rationalizations? Can we look at the release Motorola should have issued instead of its wrongheaded blame-the-world scenario, the same scenario it has been using for a half-dozen quarters now?
SCHAUMBURG, Ill.--Motorola once again screwed up its quarter after a series of miscues both at home and abroad that has left it well behind handset-and-systems competitors Nokia (NOKA:NYSE ADR) and Ericsson as well as telco equipment maker Lucent in the largest, fastest growing market in the world, the market for communications equipment.
"We haven't been able to execute a whit since [George Fischer, now president of Eastman Kodak (EK:NYSE)] left here, and this quarter wasn't any different," Christopher Galvin, who ostensibly runs Motorola, said. "We are also completely incompetent at forecasting things around here because of our unwillingness to blame ourselves and come to grips with what is ailing this company.
"We chose not, however, to blame weakness overseas because, frankly, our competitors simply haven't seen it happen, so it's got to be something we are doing," Galvin continued. "In fact, they are hitting the cover off the ball.
"The problems are not just overseas," he said. "We haven't done a good job winning orders in our own backyard, giving up great business to both regional carriers and the new competitive local exchanges, even though the Startac is a pretty nifty product," Galvin continued. "That's just our crummy execution, I am afraid."
Semiconductors? "What can we say? We have been wildly overoptimistic that demand was going to continue and we were just kidding ourselves, in retrospect. We didn't have a clue how bad things were out there. Wow, have we been clobbered," he said. "We're losing share everywhere we compete.
"Most disconcerting," Galvin told a gathering of 15,000 people he had to ax to cut costs, "was our inability to do anything but hype Wall Street about our numbers being up again next year. We have been completely unrealistic about how bad things are here and we have routinely guided semiconductor analysts toward much higher levels than were at all possible. We've been unrealistic here for a very long time and have done a ton of accounting shenanigans with our subsidiaries and customers in order to even make these pathetic numbers. Look at all of these contracts with Iridium (IRIDF:Nasdaq ADR) and figure out if you can make any sense of them. I can't."
In conclusion, Galvin said he was going to surrender management to somebody from Lucent or Nokia or Ericsson who could figure out how to get things moving again. "And most important, we are not going to blame world-wide conditions or have you believe that the tech sector is even weaker than it is. Those who sell other stocks because of our problems probably don't realize that it is our own poor execution that others are feasting off of to begin with. In short, we don't have a clue."
End. Don't bother to contact investor relations: He's gone, too!
Ahh, now wouldn't that be a breath of fresh air?
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