NXP Sells Another Business Unit
Another chapter unfolds in the grisly tale of NXP. Yesterday the Sound Solutions unit, which had annual revenues of $255 million, was sold.
Having been sold for $10 billion by Philips in 2006 to private equity companies led by KKR, NXP has been subjected to the classic private equity management pattern of: load up the acquisition with debt, cut back the R&D, out-source everything possible, sack as many people as possible, sell off the bits which can be sold off and IPO what remains.
NXP’s wireless business was sold off to ST which passed it on to ST-Ericsson which seems to have been sacking people ever since.
NXP’s TV and set-top box IC unit was sold to Trident who sacked practically the entire Southampton-based contingent.
In-house manufacturing was savagely pruned with fabs in Caen, Hamburg and New York sold or closed and the Nijmegen fabs under threat.
To what purpose? To make money for a few executives and for the investors in the private equity companies who are already rich people.
At whose expense? The sacked employees and their families.
So private equity is a way of transferring money from the working middle-class to the rich.
In America, 24% of the national income goes to 1% of the population.
Private equity is one of the mechanisms by which this transfer of resources from the middle class to the wealthy is achieved.
We should have no truck with it in Europe.