Ed Flogs The Crown Jewels To China
‘Sometimes The Brats come up trumps,’ Ed confides to his diary referring to the twenty-something year-old super-sharpies who monitor his company for its private equity owners.
‘The Brats’ plan to get rid of the C-Class execs is turning out well, I have total freedom of action,’ writes Ed, ‘there’s no one questioning what I want because all the senior managers are hoping to be promoted to C-level. They’re like putty in my hands. Is it my imagination or have the skirts in HR got shorter and the blouses tighter?’
‘I’ve got some good ideas to increase revenue,’ adds Ed, ‘now that there’s no CTO to cause trouble I’m going to flog off IP to the Chinese. The CTO would have kicked up a huge fuss. Now there’s no one to object.’
A few days later the diary entry reads.
‘Called in the Director of R&D today. “We’re setting up a co-development centre in Shanghai with Wuxi Technology,” I told him, “I want you to go out and help the Chinese install our BCD process over there”.’
‘”You mean the 130nm process?”‘ asked the R&D director.’
‘”No,” I told him “the latest 40nm process and we’ll be working with the Chinese towards 32nm”.’
‘He looked aghast and I understand why,’ writes Ed, ‘that’s our latest process – the jewel in our crown worth hundreds of millions a year in revenue in chips for cars. Once the Chinese have it in production they’ll undercut us in the market and take our business. But by then I’ll have got the license fee from the Chinese on our balance sheet and it’ll make us look good for the IPO. Roll on my $25 mill.’