Motorola gets veteran AT&T dealmaker as board chair

As Motorola sets about splitting off mobile phones from the rest of its business, the struggling wireless vendor has chosen a new interim chairman: David Dorman, the architect of an earlier reorganization at AT&T.

As the new chief of Motorola's board, Dorman brings experience with both company restructuring and acquisitions, having already achieved mixed results at AT&T and elsewhere.

Dorman first joined AT&T Corp. in 2000 as its president, following the failure of Concert Communications, a joint venture he headed between AT&T and British Telecom. After acceding to the position of CEO, he began efforts to shore up that company, whose stock value had plummeted to $11 billion during the burst of the dot-com boom, from a previous high of $110 billion.

Reorganizing AT&T into four divisions, he floated the main AT&T unit as a spinoff in 2001. Dorman then merged AT&T Broadband with Comcast in 2002.

By 2003, AT&T had become the biggest Internet service provider in the US, though the company still owed creditors a lot of money. It was at this time that Dorman attempted to work out a merger between AT&T and BellSouth. But after that deal failed, AT&T found itself the target of an acquisition itself: by SBC Communications -- the former Southwestern Bell.

Dorman, a veteran industry deal maker, will replace former Sun Microsystems executive Ed Zander, who focused on building up mobile phones and other aspects of Motorola's consumer business during his tenure as Motorola's board chairman and CEO. Zander had already handed over his CEO reins to long-time Motorola exec Greg Brown, who has agreed to abide by the wishes of Motorola's majority shareholder, Carl Icahn, to divide the company in two. Zander is now slated to step down as board chairman at Motorola's annual meeting in May.

At Motorola, Dorman will not have all that much leeway in forging deals, due to a previous pact struck between Motorola and Icahn. Motorola will be required to get Icahn's input on the planned division into two companies, as well as on the search for an executive to head the new handset division.

Whoever is tapped to head the handset division will undoubtedly be tasked with finding a new monster hit in the mobile phone category, now that Motorola's RAZR is outdated. Motorola has been trying to accomplish that mission without success since the middle of last year.

Dorman has certainly made the rounds of the telecom industry, getting involved with a lot of mergers along the way. Could both of the new divisions of Motorola also become acquisition properties at some point?

The new Motorola chairman began his executive career in 1981 at Sprint. After rising through the ranks to become president of Sprint Business, he moved on to head up Pacific Bell (formerly Pacific Telesis, or PacTel).

But just as happened later with AT&T, Pacific Bell also got gobbled up by SBC. After being reassigned to the job of executive VP at Pacific Bell after the buyout, Dorman left for Internet service provider Pointcast, and from there, he went to Concert Communications.

Dorman fared well from SBC's AT&T buyout, however, having briefly served as president of the combined AT&T/SBC. In a speech he gave at an Intel-sponsored event during this time, he noted that the single largest generator of expenses he found in his company was "human error, the cost of doing things over," according to one eyewitness account.

David Dorman left AT&T with a severance package that reportedly included $10 million in cash, in addition to $20 million in pension funds and share options.