Auld lang syne

I left National Semiconductor 3 years ago to pursue personal interests and haven't kept up-to-date on my friends and former co-workers. Today I was browsing on the web and came across this really astounding news about the company:

National is laying off 1725 employees from its present employee population of 6500. That's around 26% of the entire workforce! I worked for the company when it had a world-wide workforce of more than 40,000 with 20 or more plants across the globe. Even when I left, the company had a workforce of 8000. In addition, the company is closing two plants--one in Texas and another in China. The China facility was built only in 2002-4 at a cost of $200 million; now it's history. Incredible waste!

But it gets better. The company reported 3rd quarter earnings that are 71% lower than 3rd quarter earnings just last year. And they project a further reduction in earnings of 5-10% in the 4th quarter (and actual reductions will be worse than that for sure). And it gets better still: Standard & Poor's just downgraded the company's credit rating to "Junk."

When I left, the company was rolling in money. What happened? My take: the fatal incompetence of the executives finally became obvious to the world. After years and years of throwing people out the door to artificially raise "productivity" and "profit" and throwing Americans out of jobs to be replaced by cheap H1-B imports from India, the executives who imagined that they were the brightest stars in the Silicon Valley firmament turned out to be dim bulbs who understand nothing.

Need proof? Last year, these executive savants borrowed about $1.5 billion to fund a crackpot stock buy-back scheme that blew up in their faces. Now the company has a colossal long-term debt that must be serviced in a depression that has just started! How's that for smarts, huh? They're bleeding money, so this month they did the only thing they ever really knew how to do--throw lots of people out of work.

Now a once-great company is reduced to this: a single semiconductor assembly/test plant in Malaysia and two broken down, nearly obsolete wafer production plants in Maine and Scotland. And of course the cushy company headquarters in Santa Clara, California. After all the layoffs are complete in three or four months, the company will have about 4200 people. And a mountain of debt. And shrinking income. And a troupe of dimwit executives who will surely wreck what is left of the company.

Some day soon somebody's going to buy this failing company for a song, chop it up, sell off the parts, and make a killing. And another once-great American company will vanish. And people still wonder why America is declining?