Ruminations on the electronics industry from David Manners, Senior Components Editor on Electronics Weekly.
Beyer Leaving Freescale
You always know why a bad guy goes, but when a good guy gives up a job, you wonder: Why? Has he a better place to go? Have the politics with shareholders/owners got too much? Does he feel he’s completed the job?
So, when Rich Beyer, one of the semiconductor industry’s most outstanding CEOs, said he’d retire last week the speculation is why?
As CEO of Elantec, Intersil and Freescale, Beyer was a transformative leader.
In February 2008, Beyer took on the worst job in the semiconductor industry – leading the private equity owned Freescale.
Blackstone, Freescale’s private equity owner, had grossly over-valued Freescale at $17.6 billion when it bought it in 2006 and had loaded it up with $10 billion of debt.
Beyer had to find $750 million a year just to service the debt. On top of that he had to find ways to repay, or re-negotiate repayments, of the debt capital as it fell due.
Then the market turned, the credit crunch overwhelmed the world economy, and the prospects for Freescale looked dire.
Beyer, a former officer in the US Marine Corps, was a steady hand. “The private equity owners realise they need to stay the course – a good solid course to increase shareholder value,” said Beyer at that time, “they believe we have the right strategy and absolutely want to run it for the long term.”
Beyer shaved $3 billion off the debt in his tenure as CEO and reduced annual interest payments to $500 million.
It must have been tough, though, to IPO last May and see all the proceeds go to paying down debt.
Any semi CEO, and Beyer is among the best, would have itched to put that money into product development.
At 63, Beyer is young enough to take another leading role in the industry where his unique qualities both as a semiconductor executive and as a man are much needed.Tags: interest payments, intersil, repayments, shareholder value, speculation