Ruminations on the electronics industry from David Manners, Senior Components Editor on Electronics Weekly.
Fable: A Leopard Can’t Change Its Spots
There was once a semiconductor company which was bought by a private equity company.
Everyone said: ‘That’s a really bad idea – the PE company will load the company up with debt, cut back the R&D, sell off bits and pieces, lay off loads of employees and compromise long-term strategy to boost short-term profitability’.
‘No’, said the semiconductor company, ‘the PE people have told us they will invest in the business, and they will make funds available for strategic acquisitions to boost our presence in target markets.’
The PE company loaded the semiconductor company up with debt, cut back the R&D, sold off bits and pieces, laid off loads of employees and compromised long-term strategy.
MORAL: A Leopard Can’t Change Its SpotsTags: bits and pieces, fable, Private equity, semiconductor company, term profitability