MUNICH, Germany — Semiconductor manufacturer Infineon AG has no plans to hire or promote a successor to outgoing CEO Wolfgang Ziebart. Instead, the company will be lead jointly by the four-person management board and spokesman Peter Bauer will act as "primus inter pares", the company said.
Currently, there are no plans to promote Bauer to the CEO position, and likewise no plans to seek a successor for the CEO person, an Infineon spokesperson explained. "This construction demonstrates the unanimity within the management board," he said, pointing out that this is not going to be an interim solution.
While the spokesperson stated that the difference between the title and the tasks of a CEO on one hand and a 'spokesman of the management' on the other hand board is only marginal, industry watchers find an interesting point in the construction: In a management board with no CEO, supervisory board chairman Max Kley would be de facto the most powerful person in the company despite his non-executive status.
Monday (May 26th), the company had announced Ziebart's resignation after a lasting power struggle between him and the supervisory board. Infineon's official press release states "different opinions" being the reason for Ziebart's decision. Company officials declined to provide details, but the way the power struggle particularly between Ziebart and supervisory board chairman Max Kley has been led suggests that the differences arose on the question of a possible close cooperation with NXP Semiconductor BV, which would include the option that NXP principal shareholder, the private equity company Kohlberg Kravis Roberts Co. (KKR), could acquire a major stake in Infineon. Over the past weeks, Kley reportedly was in talks with both companies.
Another bone of contention could have been the poor financial performance of Europe's second largest semiconductor manufacturer which writes red figures for quite some quarters now.
Sources close to the company now suggest that the second reason contributed much more to the clash than the discussions over NXP/KKR. In particular, the lack of speed to separate the memory chip maker Qimonda from its parent company Infineon enraged the supervisory board. "It is simply not enough to carve out a company, sell a part of the shares at the stock exchange and remain inactive with respect to the bigger part of the shares," a source said. Infineon still holds 77.5 percent of Qimonda's shares; Ziebart had announced to sell them or give them away as property dividend to Infineon's shareholders until February 2009 at latest.
In order to improve the ailing companys financial performance, Infineon has announced a program, dubbed IFX 10 plus, to improve its profitability. However, it appears like the persons in charge do not yet have a clear picture what the program may consist of. "It refers to Ziebart's older plans to improve the EBIT margin to at least 10 percent", a company spokesperson said. When Ziebart past January had announced his quarterly figures he said that the margin guidance of 10 percent would be very difficult to reach; now the company hopes to achieve that goal for all that.
However, there are no specific action plans in place yet, the spokesperson said. In particular, it remains unclear to which extend the production in Dresden and other relatively high-priced European locations can be maintained. While the spokesperson pointed out that there are no plans to cut jobs, he also was unable to deny this possibility. Infineon presently tries to reduce the number of its manufacturing workers in Dresden by offering a bonus to each worker who changes over to co-located subsidiary Qimonda.
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