Motorola freezes pension plans, salaries; execs take pay cuts
Motorola announced it would freeze U.S. pension plans, stop matching company 401(k) contributions, halt most salary increases for 2009 and cut executive pay as the handset maker continues reeling amid the economic recession.
The company said beginning March 1, it would free U.S. pension plans, eliminating future benefits. However, Motorola said it would continue to provide funding to meet its pension obligations to current and future retirees. The company also said that beginning Jan. 1, it would suspend all matching contributions to the company's 401(k) plan. Additionally, the company said that employees in most of Motorola's markets would not be getting any salary increases in 2009 and that it is co-CEOs, Greg Brown and Sanjay Jha, would take a voluntary 25 percent cut in their base salaries.
The Schaumburg, Ill.-based Motorola has struggled in recent months as demand has declined amid the economic downturn and its losses have mounted. The company posted a $397 million loss for the third quarter and cut 3,000 jobs. Its debt was recently downgraded to junk status by the ratings agency Standard & Poor's, putting the company in an even more precarious financial position.
Motorola has decided not to spin off its handset division and has instead said it will put renewed focus into creating Windows Mobile and Android-based handsets in 2009. Leaked photos of four new phones the company is said to be developing for Verizon Wireless appeared on the blog Boy Genius Report today.
- see this article
- see this release
- see this photo slideshow of the phones
- see this post on the phones
Motorola's losses grow; firm will focus on Android, WinMo