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The BBC's Hayley Miller
"Mr Blair has intervened personally"
 real 56k

Wednesday, 11 April, 2001, 01:29 GMT 02:29 UK
Motorola's results shock
Motorola HQ Illinois
It is feared the company could announce more job cuts
Motorola, the world's second-largest mobile phone maker, has reported a worse than expected first-quarter operating loss.

The news comes as a shock despite the US telecoms giant issuing two profit warnings this year, and cutting 15% of its workforce since December.

The company said it lost $206m in the first quarter compared with a profit of $481m a year ago.

The UK Prime Minister, Tony Blair, has now intervened to try to save Motorola's manufacturing plant in Scotland.

It was widely expected that the company would announce the closure of the plant at Bathgate at West Lothian - which employs more than 3,000 people - on Wednesday.

Swindon base
Job cuts have already hit the firm's Swindon base
But Mr Blair held a 15-minute telephone conversation with Motorola's president, Chris Galvin, on Tuesday afternoon, in an attempt to stave off any immediate closure measures.

An announcement about the future of the Bathgate plant now appears to be on hold.

It is the first time Motorola has posted a loss in the first quarter in 15 years.

The company has been trying to improve its financial performance by taking aggressive cost-cutting measures including the slashing of 22,000 or 15% of its jobs this year.

Hopes dashed

Shares of Motorola, which hit an eight-year low last week, but rebounded about 9% on Tuesday ahead of the earnings report.

Traders said the stock's rise was due to a rebound from recent lows, rather than enthusiasm for Motorola's quarterly earnings.

The stock has plunged more than 75% over the past year.

Motorola's results are expected to push the shares back down again, taking the rest of the market with it.

A Downing Street spokeswoman confirmed that Mr Blair had spoken to Mr Galvin on the telephone.

"The prime minister spoke to him about their plans for Scotland, supporting the work that the Scottish Executive has done to try to keep the jobs in Scotland," she said.

The Bathgate factory has been facing closure for the past month after Motorola decided on a massive worldwide restructuring programme.

But on Tuesday, before the firm's results were announced, a Motorola spokesman refused to comment on the threat to the plant - dismissing it as speculation.

He said the plant was currently on its two-week Easter shutdown.

"We have made no decision and we have made no proposals to the consultation forum at the plant," he said.

But he added that Motorola employees had previously been told of the need to cut costs globally in the mobile phone division.

Sector alert

Motorola is the first of the big three mobile phone makers, and the first major technology company, to report on the latest quarter.

Rivals Nokia, the world's largest mobile phone maker, and Ericsson, the world's number three, are expected to report on their latest quarter on 20 April.

Both companies also have issued warnings for the first quarter, citing a slowdown in sales.

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See also:

23 Mar 01 | Business
Motorola cuts 4,000 more jobs
23 Feb 01 | Business
Motorola profit warning
15 Jan 01 | Business
Motorola scales back
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