European bank loans ST $470 million

9/28/2010 1:09 PM EDT

I'm not sure if it is good for governments to loan money to businesses to try to restart the economy and keep their country competitive. Hopefully they will get it back someday. I hope ST will be able to continue as a player in the market and weather these bad times.

9/28/2010 2:25 PM EDT

ST is in Red for last 3 FY. (http://www.google.com/finance?q=NYSE:STM&fstype=ii) So they badly need this funding for R&D. And the identified areas are right on; i.e mobile multimedia convergence apps & low power telecom apps.. But I am bit confused, since IIRC these domains are now handled by ST-Ericsson not ST!!?

@daleste ST is the last big semi company Europe has. Since Infineon & NXP is selling their company part by part, Europe will want to save ST at any cost.

9/28/2010 4:03 PM EDT

ST is paying back its faulty decisions. They have spent tremendous amount of money to create joint ventures, acquisitions indeed it was not necessary to do so. Paying lots of money to NXP to create a new JV was not worth to do for example. We can see results easily with ST/Ericssons current situation. Meanwhile ST forgot or skipped to focus more on R&D, yes they are leader at MEMS but lost huge amount of the cake to competitors.

I, as person who is located at EU, wonder why the taxes that i pay, is going to cover faults of such managers/companies. Protecting europian companies is okey, however why we have to pay to "poor" workers of nxp, or R&D costs of ST, who for sure is going to move some of its business units to asia anyhow. I would say EU parliment members should focus more on how to create jobs, cover damages of economic downturn. Its for sure same for US either.

9/28/2010 10:41 PM EDT

ST still has some products going for it and if they don't catch up fast with others like TI, Broadcom, PMC, etc then it's bad for Europe where they have considerable presence. I am not against Govt loans to private firms but they should be done with diligence. I hope ST can somehow pull through these bad times.
I admit they became complacent last couple of years it's a wake up call. They had some really interesting products in the pipeline with embedded graphics, wonder how it's shaping up.

9/29/2010 2:20 AM EDT

I totally agree with the argument that why is tax payers money being spent on private companies ? Private companies should raise their own funding be it for R&D or for anything else. With so many major playes in the IC industry its hard to bet on any single company.

9/29/2010 7:25 AM EDT

That is why the region is going bankrupt. Why should govts try to select winners and rig the markets? Why not allow the firms to raise their funds and get responsible? But it happens, even in America.

9/29/2010 3:08 PM EDT

Government have no other options than to give loans or stimulus packages to companies either for the stability of the economy or to keep their industry competitive in this age of globalization. Jobs will eventually move away to cheaper locations or to locations of the skilled workforce. I have noticed a hugh effort from EU to attract skilled workforce from Asia in recent past. In these troubled times, US is actually blocking skill workforce to enter the country while Europe is opening its boundaries. Let's see how it levels the play.

9/29/2010 5:33 PM EDT

The EIB should think of a better term than digital nomadism to describe what it wants done. Nomadism implies aimlessness. NXP had a better term for this which was Ambient Technology. At any rate, government stimulus can be positive if it has appropriate and timely milestone accomplishments. There are good examples of successful interventions by European multi-state organizations like Airbus Industries success in aerospace. Also it is inevitable that some hiccups occur in some companies execution as technology shifts and personnel changeovers occur. The challenge is how quickly you work on the right products with the right focus and creativity and without distractions.

9/30/2010 12:30 AM EDT

ST thanks its mighty and great patron. "Now we shall surely learn how to turn Lead into gold, Sire!"

9/30/2010 1:00 AM EDT

ST is doing just what has come to be SOP, give us money or we leave. It works in the US, At least it's a loan and not a subsidy, not that a loan is any more likely to be paid back then a subsidy, although it does sound better.

9/30/2010 4:26 PM EDT

The story revolves around the loan, but is there any information as to whether or not ST sought private financing and on what terms? I would agree that if they could get the government to do the loan, the terms would be less onerous on them.

If the loan was the last resort for ST, that is one thing. But if the loan was the first stop, that is an entirely different thing.

Any taxpayer in any country would not want government loans to private companies as the first finance option to become standard operating procedure. What government can grant, they can take away...or worse yet...try to control. That alone would encourage reputable business leaders to leave and go elsewhere.