Motorola Says Mideast Conflict Could Affect Business

Motorola Inc. (MOT) warned Thursday that expanding hostilities in the Middle East could disrupt its business, which has sizable manufacturing and engineering operations in Israel.

The comments — one of the strongest cautions yet from a large company — came on day 23 of the war between Israel and Hezbollah guerrillas in Lebanon.

Motorola said in the risk factors section of its quarterly filing with the Securities and Exchange Commission that manufacturing and engineering in Israel "could be disrupted as a result of the expanding hostilities in the region."

The company has about 3,500 employees in Israel in facilities such as its country headquarters in Tel Aviv and a factory in the southern city of Arad, where it makes cell phones, two-way radios and communications network gear.

The world's second biggest cell phone maker, which had a total headcount of about 69,000 at year end, also said its sales throughout the region could be affected.

"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 said in the filing. It did not give details on sales figures for the region, which is viewed as a fast-growing emerging market.