By Scott Moritz
Looking for a steady hand and a seasoned deal maker, Motorola (MOT) picked former AT&T (T) chief Dave Dorman as its next chairman.
Dorman will replace Ed Zander who retires next month, and work with Motorola CEO Greg Brown to spin off the company’s mobile phone unit next year. Dorman has been a senior advisor with private equity shop Warburg Pincus for the past 18 months since he left Ma Bell.
It’s probably no coincidence that Dorman’s chief accomplishment on his 28-year telecommunications resume is the $16 billion buyout of AT&T by SBC in 2005. SBC subsequently took the AT&T name. It is no secret that Motorola would like to find a rich buyer to take the phone unit off it hands.
Motorola’s tumble from the top of the cell phone heap has landed the company in the bargain basement marked last week by the stock’s four-year low. With out a successor to the popular Razr phone, Motorola has been in a freefall. The cell phone operation has plunged into red ink and, with no big buyers to salvage the business, the unit is now scheduled to be spun off to shareholders.
Under a truce agreement Monday with activist stakeholder Carl Icahn, Motorola has agreed to add two Icahn picks to the company’s board. The new members – investment banker Bill Hambrecht and Icahn Enterprises chief Keith Meister – have Icahn’s say on major strategy decisions and the choice of a CEO for the soon-to-be-spun phone business.
Dorman’s role seems clear, he brings his veteran telecom leadership, should CEO Brown find himself over his head, and perhaps more importantly, Dorman can steer toward deals.
He’s had a lot of M&A experience in his recent work history, says Forrester analyst Lisa Pierce. Among his strengths, says Pierce, is that he can “shop the pieces of the business to one or two acquirers.”
