Motorola to flog car products unit, says WSJ

Motorola may be selling its 5,000-employee automotive-products unit, according to a report.

The Schaumburg, Illinois-based company has hired JPMorgan Chase to find a potential buyer for the division, which could fetch somewhere between $1bn and $2bn, according to a report published in The Wall Street Journal on Thursday.

A Motorola spokesman declined to comment on a potential sale.

Motorola's automotive unit makes telematics systems (in-car communications) used in GM's OnStar vehicle navigation systems, as well as sensors used in steering, braking, and power doors and windows. The company also makes under-the-hood controllers, including sensors that alert drivers to oil pressure problems.

DaimlerChrysler, Ford and GM are three of Motorola's largest automotive contracts, the spokesman said.

Motorola's automotive group reported revenues of $1.68bn in 2004 as a part of Motorola's $31.3bn total revenue last year.

The spokesman said sales for the automotive division in the first quarter were down due to softer sales by US automobile manufacturers. Second-quarter sales were also down but only slightly compared with sales in 2004.

Profitability for Motorola's automobile division is improving; while the spokesman said the group did not post a first-quarter profit in 2005, profit in the second quarter stabilised.

Shares of Motorola closed down 20 cents, or less than one per cent, at $23.67 on the New York Stock Exchange.

Michael Singer writes for CNET News.com