Motorola is to shut its Harvard, Illinois cellphone manufacturing operation with the loss of 2500 jobs - half of the workforce at the facility.

The irony is that, as Motorola acknowledged, the Harvard plant successfully cut costs and improved production quality last year. However, other plants remain more cost-effective and have the capacity to pick up Harvard's output.

The final shutdown will take place before 30 June.

The closure is part of Motorola's across-the-board cost-cutting programme instituted after the company announced that it expects a dip in profitability over the first two quarters of calendar 2001. The prediction follows its latest, disappointing financial results.

Despite a year-on-year rise in Q4 sales of nearly 11 per cent, from $9.1 billion to $10.1 billion, Motorola saw profits fall over 40 per cent, from $564 million to $335 million for the quarter. ®

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