Icahn turns up heat on Motorola
In bid for board seat, activist shareholder writes letter to shareholders, calls company 'troubled' and blames a lack of oversight.
NEW YORK (CNNMoney.com) -- Activist shareholder Carl Icahn took out a full-page newspaper advertisement Tuesday with a letter to shareholders of Motorola, saying the cell phone maker has stumbled badly due to what he calls "a critical failure in oversight and leadership."
Icahn also charged that the company's board is moving forward with business as usual despite problems.
Icahn's letter, printed in Tuesday's edition of The Wall Street Journal, is part of his effort to win a seat on the company's board of directors. But while Icahn's letter says he and his affiliates currently own more than 68 million shares of Motorola (Charts, Fortune 500), or about 3 percent of its outstanding shares, the letter stresses that he is not trying to win control of the company.
"I am convinced that significant stockholder representation in the Motorola boardroom, even by a single director, is absolutely necessary at this troubled company," he wrote in bold-face type. "I am seeking a single seat, a single voice, asking for accountability instead of 'business as usual.'"
The company's shareholder meeting is May 7.
Icahn criticized the company for not having handsets to offer Cingular Wireless, the nation's largest wireless phone service now known as AT&T Wireless and a unit of AT&T (Charts, Fortune 500), when the company started its third-generation cell phone service, leading the company to use phones from Samsung instead.
He also criticized a quote from Motorola CEO Ed Zander in a Journal article in which Zander supposedly shouted at an office meeting, "I love my job. I hate my customers."
"It sounds like something straight out of 'Alice in Wonderland,'" Icahn wrote, again using bold type.
He cited the support for his board candidacy from Institutional Shareholder Services and Proxy Governance, two services that advise institutional investors how to cast their votes on proxy issues.
He took credit for helping to raise the share price at Time Warner (Charts, Fortune 500), Kerr McGee, Medimmune (Charts), Fairmont, Imclone (Charts) and Temple-Inland (Charts, Fortune 500) with his activist investment in recent years.