Good to hear the EC is going to help 512 sacked NXP workers with a €1.8 million contribution to a €2.8 billion package to help them get re-employed. But it's interesting to hear the reasons for the award as argued by the Dutch government in its application for the EC contribution.
The dismissals were a consequence of the change in world trade patterns, argued the Dutch, as evidenced by the following three events:
1. 'Europe's market share decreased from 14.9 % in 2005 to 11.2 % in 2009, whereas for the biggest players in
2. 'The high value of the Euro against the US Dollar in 2009 created an additional comparative disadvantage for European manufacturers, as the costs were incurred in EUR and the products sold in USD.'
3. 'The financial and economic crisis further aggravated the situation and by April 2009 the worldwide turnover in semiconductors had dropped by 25.1 % compared to the same month of the previous year.'
No mention of the fact that Philips sold NXP to
The Euro commissioner in charge of handing out the money appears to swallow the Dutch line:
László Andor, EU Commissioner for Employment, Social Affairs and Inclusion, says:
"The market for semiconductors, which is highly sensitive to changes in economic growth, has been seriously affected by the change in world trade patterns and the financial and economic crisis."
Now NXP is expecting a flat Q3 when the market's booming because the company lacks capacity as a result of cutting too deeply.
and let's not mention even the $10m+ bonus+ 3 key managers got, exactly during the year the company decided to lay off those people....
Yes indeed, Anonymous, it’s evil. Did you see the 2009 US annual executive compensation survey by the Institute of Policy Studies which related the pay of CEOs to the amount of people they laid off? Apparently the CEOs of the 50 companies which laid off the most people had average pay of $12 million which was 42% more than average CEO pay. One example was American Express CEO Kenneth Chenault who, after getting $3.39 billion tax-payer bailout via TARP and laying off 4000 people, had a pay packet of $16.8 million. And Mark Hurd, the ousted HP CEO, had $24 million pay while sacking 6,400 people. I expect the accountants have an ratio for it - PTL (Pay-To-Layoffs) ratio. It’s callous, wicked and the unacceptable side of capitalism, but society still seems to tolerate this screwing of the poor to over-reward the rich. While we continue to tolerate it, it will continue because, unfortunately, it reflects human nature.
Interesting to note Burger King has just been bought by private equity companies for the second time !!
http://www.bbc.co.uk/news/business-11168720
I don't think NXP will have this worry
Somewhat off topic: I wonder if 3G Capital will do the same to that other chip company, you know, Burger King.
following on the off-topic track: let's remember 3G capital is owned by brazilians... maybe indeed the sort of people who really enjoy a good beef and churrasco culture.. Maybe it is for the best :)
Well yes, Brazilians may appreciate a burger ... however there was me thinking that the great US of A is built with the sort of people who like to pave a path to success with innovation, on the journey to being a high tech leader. Not as David Manners suggests, stifled with debt.