By Steve Rhodes
“Motorola Mobility is laying off about 700 employees in the Chicago area, representing about 23 percent of its local workforce, as part of broader job cuts and restructuring measures announced Monday,” the Tribune reports.
“After the local layoffs, Motorola Mobility will employ about 2,300 people in Libertyville and Chicago, Motorola Mobility spokeswoman Jennifer Erickson said. The Libertyville-based smartphone maker is laying off 20 percent of its 20,000-strong global workforce, affecting 4,000 employees worldwide, Google Inc. disclosed Monday in a filing with the Securities and Exchange Commission. The Mountainview, Calif.-based search giant acquired Motorola Mobility in May for $12.9 billion.
“The disclosure comes less than one month after Motorola Mobility and Mayor Rahm Emanuel made a high-profile announcement about the company moving its headquarters and 3,000 employees from Libertyville to the Merchandise Mart in 2013.”
But because the company hasn’t been outwardly against gay marriage, Emanuel proclaimed them still a symbol of Chicago values.
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“T]he mayor said the timing of the layoff announcement is not an embarrassment for his administration or a setback in efforts to build a tech hub downtown.”
Dear Tribune reporters: You actually got Rahm on the phone and the best question you could think to ask was if this was an embarrassment?
“Why yes, Tribune, this is a terrific embarrassment to me and to the city, I’m so glad you asked. I will be available for flogging at Daley plaza at noon.”
A spokesman for the mayor then sent the Tribune a statement via e-mail which the paper deemed worthy of publishing:
“We expect them to create thousands of jobs in Chicago over time. This is a change to get the company moving in the right direction, but this is a long-term relationship and we’re looking forward to many years of job growth, innovation and advancement from the company.”
Right. Thousands of jobs. In the unicorn division.
“Motorola Mobility, the ailing cellphone maker that Google bought in May, told employees Sunday that it would lay off 20 percent of its work force and close a third of its 94 offices worldwide,” the New York Times reports.
Those jobs aren’t coming back any time soon, if ever.
“[S]ome analysts wonder whether Google can succeed in the brutally competitive, low-margin cellphone business,” the Times says.
“Ninety percent of the profits in the smartphone space are going to Apple and Samsung, and everyone else from Motorola to RIM to LG to Nokia are picking up the scraps of that 10 percent,” said Charlie Kindel, a former manager at Microsoft who writes about the mobile industry. “There’s no real sign that’s changing anytime soon.”
That’s business. But . . .
“Last year, Motorola Mobility agreed to retain a local workforce of 2,500 and make $600 million in investments in exchange for tax credits of more than $10 million a year for 10 years. The layoffs announced on Monday will drop Motorola Mobility’s Chicago-area workforce below the 2,500-worker threshold needed to qualify for state incentives.”
At least those incentives disappear. But oh, but I remember the glory days:
“Illinois will spend $10 million a year over the next decade to keep Motorola Mobility Holdings Inc.’s phone business headquartered in Libertyville,” Crain’s reported just 15 months ago.
“The cell-phone maker agreed to keep 3,000 jobs here, including about 200 workers in a design center in the Loop. The decision by CEO Sanjay Jha to stay in Illinois ends months of speculation over whether Illinois would lose one of its few large technology company headquarters.
“Gov. Pat Quinn defended the move: ‘It’s important for Illinois to have a world-class technology company and a brand the whole world knows. These are 3,000 high-paying jobs that are important to our state.'”
And then there was the breathless reporting just a few weeks ago that Chicago had cut Libertyville off at the knees. Yay!
“In an enormous win for downtown Chicago, Motorola Mobility Inc. is making it official, announcing this afternoon that it’s moving its headquarters and 3,000 high-tech jobs to the Merchandise Mart,” Greg Hinz wrote.
The truth is, though, that Motorola Mobility sucks. It’s lost money 14 of the last 16 quarters and that’s largely because they produce a terrible product. But that’s their business, not Rahm’s or Pat’s. Let’s keep the taxpayer – and the bravado of jobs-killing, taxpayer-subsidized relocations – out of it.
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“If there’s $6bn – or $6.5bn – of future profit lurking in MMI’s handset and set-top box business, it’s certainly well-hidden; the handset business, when profitable, made about $80m of profit per quarter, and the set-top box business $50m,” the Guardian reports. “At that rate, clawing back the purchase cost would take 47 consecutive quarters, or just under 12 years. If the patents are overvalued, the payoff is even more distant.”
Sears Is Still Around
“Shares of Sears Holding Corp. shot up more than 5 percent in early trading on Monday on documents the Hoffman Estates-based retailer filed with the Securities and Exchange Commission detailing its plans to spinoff its hardware and outlet stores,” AP reports.
Yeah, that’s probably not gonna work unless they bring back the Softer Side of Sears campaign and use it to market Sears Hardware at Night.
United Center Of Hell
United Airlines is moving its headquarters to The Tower Formerly Known As Sears.
“The fact that United has brought its company under one roof and extended their commitment to downtown is great news for all Chicagoans,” Mayor Emanuel said in a statement.
Expect the layoff announcement in about six weeks.
Prison State
“Illinois prisons ‘aren’t country clubs,’ Gov. Pat Quinn said Friday in rejecting the notion that news reporters should be allowed inside to see conditions in the crowded system for themselves,” AP reports.
“Letting journalists visit the prisons is a security risk, the Chicago Democrat said, and taxpayers will have to trust his administration’s experts on how the system is run.
“‘That’s my decision,’ Quinn said.”
Just trust the experts. That’s always worked in the past.
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“WBEZ Radio in Chicago and The Associated Press have asked to take a look inside the state’s prisons after hearing years of complaints about overcrowding and understaffing, a watchdog group’s reports last year of ‘deplorable’ living conditions at two lockups, and an employee union’s worries about what it calls a ‘rush’ to close two facilities this month because of budget problems. Both have had requests denied.
“Corrections policy allows reporters to visit prisons with the director’s approval, and media tours were fairly regular under previous administrations. On Friday, Quinn cited security concerns as reason for denying more recent requests.
“‘Prisons aren’t country clubs,’ he said after cutting the opening-day ribbon for the Illinois State Fair in Springfield. ‘They’re not there to be visited and looked at.'”
In Illinois, secret prisons visit you.
The Seinfeld Olympics
Featuring the Spice Girls.
The Weekend In Chicago Rock
Guided by Voices, Olivia Newton-John, The Mighty Mighty Bosstones, The Handcuffs, The Wanton Looks, Hairlip, The Darlings and George Thorogood backed by The Destroyers played at venues near you. We have the video.
Danks You Very Much
Unexpected sibling heroics. In The White Sox Report.
The Cub Factor
Will appear on Tuesday this week.
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The Beachwood Tip Line: Officer material.
Posted on August 13, 2012