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Motorola may sell plant in Elma Firm seeks buyer for its automotive products unit

Motorola is trying to sell its underperforming automotive products unit, which includes a 400-job plant in Elma, according to Thursday's Wall Street Journal.

The plant on Jamison Road produces auto electronics, such as sensors and relays, for vehicle makers and component manufacturers. Motorola has hired J.P. Morgan Chase & Co. to market the 5,000-job automotive unit, the Journal reported, citing unidentified sources.

Private equity firms would be the most likely buyers of the unit, which could be worth $1 billion to $2 billion, the newspaper reported.

Motorola wouldn't confirm or deny the report. Spokeswoman Susan Frederick said the company "doesn't comment about rumors and speculation."

The unit's sales and prices are falling because of the auto industry's downturn, Motorola said in its quarterly report. The unit is part of Motorola's Government and Enterprise Mobility Solutions segment, which accounts for 19 percent of the company's $8.8 billion in second-quarter sales.

Chief executive Ed Zander has been on a mission to improve Motorola's profitability, reorganizing divisions and cutting head count.

The plant in Elma has trimmed employment over the past five years. It had 700 jobs in 2000, the year before it shifted circuit-board manufacturing to a plant in Mexico. The company shelved a $40 million expansion plan it had announced in 2000.

The plant isn't now seeking help from the Erie County Industrial Development Agency for business retention, the IDA said.

Motorola isn't the only Western New York employer being buffeted by a business downturn at domestic automakers. Three quarterly losses at General Motors have prompted deep price cuts, and supplier Delphi Corp. has said it faces bankruptcy if restructuring talks with GM and unions fall through.

Based in the Chicago suburb of Schaumburg, Ill., Motorola is best known for its cell phone business, the source of 55 percent of its sales, according to S&P. It had $31 billion in sales last year and $1.5 billion in profits. Its shares fell 20 cents to $23.67 Thursday on the New York Stock Exchange.

e-mail: fwilliams@buffnews.com

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