April 17 (Bloomberg) -- Carl Icahn, the billionaire investor who is fighting for a seat on Motorola Inc.'s board, said Chief Executive Officer Ed Zander needs to be held responsible for his efforts to revive the mobile-phone company.

``He thinks that he can get a turnaround going,'' Icahn said in an interview late yesterday. ``He should be held accountable for that occurring. You can't afford to make too many errors.''

Icahn said he will bring back his demand that Motorola buy back more stock when the company's handset business reaches an operating profit margin of 8 percent to 10 percent. Schaumburg, Illinois-based Motorola, the world's second-biggest mobile-phone maker, last month forecast a loss for the most recent quarter and its first sales decline in four years.

``If we can't get the handheld business back to adequate margins, I would want to hold management accountable,'' Icahn said. ``It's a good company and it has a great position. I hate to see it messed up.''

Icahn last week called the current directors ``passive and reactive'' in a letter to shareholders and said they may wait too long to take steps to revive the phone maker. In a response letter, Motorola urged shareholders to vote against Icahn, saying he has no qualifications that would strengthen the board.

Shares of Motorola added 13 cents to $17.95 at 4 p.m. in New York Stock Exchange composite trading. They have lost 13 percent of their value this year, after dropping 9 percent in 2006.

In an e-mailed response today, Motorola reiterated that it takes its obligation to nominate board members seriously and will not simply add Icahn as a director to avoid a proxy fight.

Investor Support

Icahn, 71, said he has received ``a fair amount'' of phone calls from shareholders who support him and are unhappy with Motorola's management. He declined to give specific ideas for reviving phone sales at the company.

``I'm not coming with preconceived notions about how to run Motorola,'' Icahn said. ``You need a large shareholder there to sound an alarm, if necessary, before it's too late.''

Motorola slashed prices to compete with larger rival Nokia Oyj. In the fourth quarter, Motorola's profit margin on phones shrank to the lowest in almost four years, stepping up pressure on Zander to release new designs and shore up revenue.

In a change of course, Zander last month said the company in the first quarter declined to match some price cuts by rivals as he focuses on profitability instead of market share gains.

``They've now decided to change course and that's OK, but it cost billions and billions of dollars to make the mistakes that they made,'' Icahn said. ``Why didn't they pick up on the problem before?''

Board Seat

Icahn began campaigning for a board seat in January and started a proxy fight last month because Motorola wouldn't endorse his nomination. The founder of Icahn Partners LP owns more than 68 million Motorola shares, or about 2.9 percent of the company, making him the sixth-largest shareholder, according to data compiled by Bloomberg.

Shareholders are scheduled to vote on giving Icahn a board seat at a meeting on May 7.

Icahn worked with businesses in industries from oil and gas to telecommunications and real estate. He built his reputation in the 1980s as a corporate raider, targeting big companies including Phillips Petroleum Co., Texaco Inc. and Trans World Airlines Inc. More recently, he failed to force a breakup of New York-based Time Warner Inc., the world's largest media company.

For Motorola, the competition is about to intensify further in June, when Apple Inc. release its iPhone, a combination of the company's top-selling iPod music player and a mobile phone that will sell for as much as $599.

``It's a tough business,'' Icahn said, ``but we have a great company here. I hope Ed Zander can turn it around.''

To contact the reporter on this story: Ville Heiskanen in New York at vheiskanen@bloomberg.net

Last Updated: April 17, 2007 16:11 EDT