Motorola to Close Modem Plant as Sale Fails

Motorola Inc. said it will close a modem plant in July, laying off about 500 workers, because the sale of the facility fell through. The plant in Huntsville, Ala., makes modems used mainly for Internet access. Motorola said earlier this month it would sell the business to a group of unnamed investors for an undisclosed price. It did not give details on why the sale collapsed. The customer and support services for the modems line will be transferred to Mansfield, Mass. Motorola, based in Schaumburg, Ill., has been struggling to restructure its businesses to boost sales and earnings. Its profit dropped 50% in the first quarter, and it warned that the Asian economic crisis will further depress prices of its phones and semiconductors. Motorola’s shares rose $3.50 to $59.38 on the New York Stock Exchange, partly on speculation that Germany’s Siemens group is interested in acquiring the company--speculation that Siemens quickly denied.