Ruminations on the electronics industry from David Manners, Senior Components Editor on Electronics Weekly.
Ed’s Oil Fails Medical
‘The telecoms and auto industry may not want a long-term technological co-development programme with us but the medical diagnostics industry surely will as they rely on emerging technologies,’ Ed confides to his diary.
Ed has been trying to add value to his company through announcing long-term tie-ups with industry leaders. However he’s got nowhere with the telecoms and automotive industry leaders, largely because of his company’s private equity ownership.
‘If I can get the medical instrumentation market to ally with us then our company’s value will improve and we may be able to exit from private equity ownership with a valuation sufficient to trigger my pay-off, ‘ writes Ed, ‘and I’ve got a meeting with the CEO of the top European medical instrumentation company in a couple of days.’
Two days later, the diary entry reads. ‘The meeting went well. The CEO quizzed me about all the technologies we were developing. I may have told him too much but he was very insistent,’ writes Ed.
‘Then I get to the crunch. “With a long-term development co-operation agreement your company will get early access to these technologies,” I tell him.’
Silence. The CEO looks me straight in the eye. “We can’t do that”.’
‘”But why not?” I asked, “you’ve as good as said you want these technologies.”‘
“We do. But we live or die by our reputation, Ed,” said the CEO, “if there’s the slightest hint that our products are not reliable, we’re dead”.’
‘”We have the most rigorous testing schedules in the industry,” I replied.’
‘”I know,” replied the CEO, ” but you’re a private equity owned company and that suggests to many people that you may cut corners to save costs. I’m not saying you do. I’m not saying that you may do in the future. I’m just saying that we can’t afford to be seen to be in a long-term relationship with a company which, however unfairly, could be seen to be tainted by the possibility of employing sub-optimal procedures.’
‘So now we’re a pariah,’ Ed confides to his diary, ‘not-wanted-on-voyage by the telecom, auto or medical industries.’
‘Still the analysts say there’ll be double digit growth next year – that will boost our value whatever these idiots think,’ Ed tells his diary, ‘roll on my $25 mill.’Tags: automotive industry, development co, emerging technologies, industry leaders, owned company