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 $2.3 million) of European tax payers' money to support the workers.
if we go back to Philips times, than we didnt have financial statements separately, all u find at media is backed to NXP with 6$ 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
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?
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?
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.
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.
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.