Rich Beyer was by no means a freshly minted CEO when he was named in March 2008 to the top position at Freescale Semiconductor. Beyer's current post is proving to be the most challenging for the veteran chip industry executive.
Freescale (Austin, Texas) already had a boatload of problems when Beyer joined the company, and the former senior executive at Intersil, Elantec, VLSI Technology and National Semiconductor, where he was either CEO or COO, expected a tough slog as the company grappled with the challenge of emerging from under the shadow of former parent Motorola Inc.
The already difficult job of helping Freescale work down its debts, exit the challenged wireless IC business and refocus resources on the automotive and communications infrastructure sectors quickly became even more complicated as the high-tech industry slipped into what Beyer describes as a "miserable" downturn.
On Thursday (Jan. 29), Freescale announced fourth quarter net loss widened to a staggering $4.2 billion—boosted by a hefty $3.6 billion impairment charge—from a net loss of $595 million in the comparable 2007 quarter. Revenue slipped 39 percent to $940 million from $1.5 billion, although the company's cash position improved to $1.6 billion, including a drawdown of approximately $200 million from a line of credit.
Despite the flurry of bad news, Beyer believes Freescale is well-positioned to emerge from the downturn with a stronger position in its two key markets and said it has enough liquidity to weather the downturn. Freescale, he said, is aiming for breakeven cash flow even as it takes further steps to reduce operating expenses.
"If you want to be in the semiconductor industry, you have to expect cycles. There was a really miserable one in 2000-2001, and this one is even more miserable. But the best companies with the best leadership find a way to manage through these kinds of downturns and prosper," Beyer said in an interview.
"We are confident we are going to manage through this. We are able to service our debt, make modest investment and even do modest acquisitions."
Beyer also addressed the issue of liquidity at Freescale and talked about the company's plans to sell its cellular IC business, a strategy the company says it is committed to but which it is having to fine tune because the tight credit market is making it difficult finding buyers willing or able to purchase the entire division.
Excerpts from our interview follow: