Further ramping up its corporate shift toward high value-added products, Motorola (www.mot.com) has announced that it will establish a US$100 European R&D center in Turin, Italy (www.comune.torino.it/www2/). The Schaumburg, Ill.-based corporate septuagenarian will create 500 jobs in its new Italian center over the next five years, company officials say.

Motorola's newest R&D center in Turin will bring together personal communications product development processes for the company's operations in the region encompassing Europe, the Middle East and Africa.

"Italy is a very important market to Motorola and a sophisticated environment for mobile communications," explained Frank Lloyd, senior vice president and general manager of Motorola's Personal Communications Sector for Europe, the Middle East and Africa.

"Our Turin center will add to Motorola's strong position in Italy, where our annual revenues exceed $1 billion. And the set-up in Turin marks another important milestone in the effort to further strengthen Motorola's presence on the European continent."

Other Major Location Factors: Infrastructure,
Accessibility and 'Strong Traditions'

Other major factors in Motorola's choosing Turin were the city's quality infrastructure, its accessibility, and its "strong traditions in design, engineering and applied research," company officials said.

The new R&D center in Turin will build on Motorola's long-time working relationship with the Polytechnic of Turin (www.polito.it/). A year and a half ago, that corporate-university link helped spawn another Motorola R&D center in Turin, this one focused on next-generation wireless communication products.

The new Motorola center in Turin will develop products specifically tailored for the needs and preferences of European consumers, company officials say.

Backslapping All Around

Local officials were predictably ecstatic over landing another major Motorola R&D operation in Turin, a northern Italian city of some 2.2 million people located on the left bank of the Po River, 320 miles (515 km.) from Rome.

Said Turin Mayor Valentino Castellani, "The decision to place Motorola's European Research and Development Center in Turin represents a great success for the city. Motorola's commitment has strengthened Turin's historical tradition in the telecommunications sector and confirms the success of our strategy for promoting the city and assisting investors.

"Our city can boast leading companies, research centers and an excellent training system and can offer inward investors highly competent and qualified employees," Castellani added.

As is usually the case with such major deals, congratulations aplenty also gushed from the corporate side of the aisle. Said Carlo Ajmar, managing director of Motorola Italy and a Motorola corporate vice president, "Italy and Turin are a natural choice for Motorola. Our new center represents the opening of an exciting new chapter in Motorola's history, one that will see us focus more intently than ever before upon our consumers, their needs and their preferences."

Italian Center Continues Motorola's High-End Drive

Ajmar's "customers-first" remarks, though, weren't mere congratulatory rhetoric. Instead, they represent part of Motorola's strategy as the company attempts to rebound from the business woes of recent years.

Another part of the company's new strategy is unfolding in Montreal, where Motorola earlier this year announced that it is establishing a $100 million, 500-employee software center. As Micheline Bouchard, chair and president of Motorola Canada (www.motorola.ca), says in the November 1999 Site Selection cover story, "Oui, Quebec: Canadian R&D Center Signals Motorola's Comeback Strategy," "The Montreal software center represents Motorola's shift toward software development and away from our traditional base in hardware manufacturing. It is a shifting of direction up the value chain," explains Bouchard, "recognizing that our products, like phones and pagers, are turning into commodities, that the value comes from the application."

Indeed, Motorola sees high-powered software paving the road back to fast-track growth. Semiconductor Products Sector President Hector Ruiz is driving the company's push toward focusing on what Ruiz calls "systems on a chip," a sector with fat, 50 percent margins almost doubling components' payoffs.

As a result, Ruiz says that Motorola will shed half of its manufacturing capacity by 2002, with outsourcers making a whopping 50 percent of its chips. Already, chipmaking facilities in Arizona, California and North Carolina have been shuttered and Philippine operations consolidated. A $3 billion Virginia factory hangs on indefinite hold.

At the same time, though, Motorola is growing the part of its portfolio that promises high value-added. And, with the new corporate mindset, it's making those strategic expansions with a far less U.S.-centric location approach.