Motorola faces Middle East disruption

11-08-2006

US telecoms giant Motorola has admitted its business could be severely disrupted by the Middle East conflict between Israel and the Lebanese militant group Hizbullah.

The world's second largest phone producer listed the conflict in the risk factor section of a report to the US Securities and Exchange Commission (SEC).

Concern exists within the company that a prolongation of the conflict could reduce demand for its products in the area.

But the fighting could have a much more dangerous and direct impact on Motorola, the statement warns.

The company has an engineering plant in Tel Aviv which employs a 3,500-strong workforce. Tel Aviv was threatened with attacks by Hizbullah leader Sheikh Hassan Nasrallah yesterday in response to Israeli air raids on Beirut and other Lebanese cities and towns which have killed 900 people.

"We have sizeable manufacturing operations and engineering resources in Israel that could be disrupted as a result of the expanding hostilities in the region," Motorola said in their quarterly filing to the SEC.

"We also sell our products and services throughout the Middle East and demand for our products and services could be negatively impacted by the hostilities."

Motorola's shares rose by 0.6 per cent on the New York Stock Exchange during trading yesterday, continuing its recent upswing in value during the last two weeks.


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