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Sheetal.Pandey
Its good that EU is taking care of the fab workers. When the cip business goes ...
peter.clarke
Readers have mentioned KKR but the European Commission seems blissfully unaware ...
Former NXP fab workers to get EU support
Peter Clarke
9/2/2010 9:32 AM EDT
LONDON – Workers at a Nijmegen wafer fab made redundant by NXP in 2009 look set to get help getting back into employment from the Europe Union.
The European Commission has approved an application for €1.8 million (about $2.3 million) from the Netherlands for assistance from the EU Globalization Adjustment Fund (EGF).
The application for €1,809,434 has also to be approved by the European Parliament and the Council of the European Union. It relates to 590 redundancies at NXP Semiconductors Netherlands BV that were made when the company opted to close a wafer fab at Nijmegen.
The European Commission said the market for semiconductors had been "seriously affected by the change in world trade patterns and the financial and economic crisis," which therefore made the applications suitable for support from the EGF.
The Commission noted that Europe's share of the world semiconductor market had shrunk from 14.9 percent in 2005 to 11.2 percent in 2009 and that the high value of the Euro against the U.S. dollar in 2009 created an additional comparative disadvantage for European manufacturers.
The assistance for the 512 most disadvantaged of NXP's former workers will come in the form of job identification and training. The total estimated cost is set to be €2.8 million (about $3.5 million) with the European Union providing €1.8 million of EGF assistance. The Commission did not state how quickly the European Parliament or the Council of the Europe Union would rule on the matter.
The EGF has received 66 applications on behalf of more than 70,000 worker and seeking €373.6 million (about $480 million) in assistance since the fund started operations in January 2007, the Commission said.
Related links and articles:
NXP in talks on solar cell manufacture at Nijmegen
NXP gives short lease of life to Boeblingen fab
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Tunrayo
9/2/2010 1:59 PM EDT
One would think that a semiconductor company would be the last industry where there would be redundancies. The chip industry is really on a roll so it is strange that NXP would be making workers redundant.
My guess is NXP has been irresponsible in staffing in the past, allowing its workforce to grow disproportionately with revenue.
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garydpdx
9/2/2010 2:17 PM EDT
Semi is no different from any other industry. If a company changes strategy, it may abandon a factory as in this case. Nobody else (TSMC, GlobalFoundries, etc.) felt that it would fit into their plans to buy it. Silicon chips or potato chips, the same rules apply.
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Tunrayo
9/2/2010 4:40 PM EDT
Actually, the profound story is that NXP is suffering from a systemic problem - the scourge of leverage buyout. NXP is paying off some serious loans, and at the same downsizing its operations. Yes, it is right for NXP to downsize even when it cannot fill its orders? NXP will soon be selling potato chips if it doesn't get its operations and loans under control.
So, it is not a question of strategy, it is purely a situation of a company trying to get leaner because its operations are inefficient and it has a lot of loans to pay.
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Baolt
9/2/2010 6:16 PM EDT
As NXP fellow i can make a insight view to all. We had been sold to KKR with allowing them to load their 6B debts on new co so called NXP. The operations, factories were working kind of ok, was just get hit by asian fellows, yet has huge talent force. However there was debt reality which was covered with kicking out precious people and switching to fab-lite. Inspite NXP had power to be a founder and be giant if no debt would be kept. So dear tunrayo its not about being " irresponsible in staffing " gotcha?
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Tunrayo
9/3/2010 7:23 AM EDT
Nice to hear some inside info from an NXP fellow. I am not an insider but I could tell NXP were having financial (loans) and operational (low gross margin) problems from information from news and financial statements.
Since you say irresponsible staffing is not the problem, Baolt, what do you think is responsible for your low gross margins? Probably your operational strategy is not overly efficient?
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Baolt
9/3/2010 7:41 AM EDT
if we go back to Philips times, than we didnt have financial statements separately, all u find at media is backed to NXP with 6$ debt. Guess why we sold out mobile division to ~1,8$, or why we made virage and trident biz? All because we didnt have family co. to support in hard days of the market, despite had debts and left in challenging market without enough cash. Loans, financial efficiency is not the case. Yet global economic crisis and Asian fellows with lowest operations cost was the key factors of shake.
Despite all NXP is in good shape, kicking for future, growing in the market. So all steps taken will bloom in next spring if an only if KKR & Philips remain patient for their $$.
So wait as see, O.o.h really sad about ex fellows who were left out
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peter.clarke
9/3/2010 12:30 PM EDT
Readers have mentioned KKR but the European Commission seems blissfully unaware of the impact of private equity on the creation and strategy of NXP.
Isn't it strange that the European Commission made NO mention of KKR and others paying Philips too much for the private equity buyout of NXP and then loading the company they had bought with the debt THEY had incurred.
I have sympathy with the former NXP workers but can't agree with the European Commission's justification for putting up 1.8 million euros (about $2.3 million) of European tax payers' money to support the workers.
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Sheetal.Pandey
9/6/2010 12:44 AM EDT
Its good that EU is taking care of the fab workers. When the cip business goes down its the fab workers who get affected the most especially they are skilled for a certain kind of job.
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