May 27, 2008 – The resignation of Infineon’s top exec Wolfgang Ziebart could be due to butting heads with management about whether to pursue a large industry tie-up, with NXP the likely partner, according to industry reports.
Infineon Technologies president/CEO Wolfgang Ziebart has resigned “due to different opinions” on the company’s ‘future strategic direction, the company noted in a statement. The company also is laying out a new plan, dubbed “IFX 10-Plus,” to improve profitability through efforts such as cutting manufacturing costs, “optimized portfolio management” — perhaps hinting at its part-ownership in memory spinoff Qimonda — and “increasing the efficiency of the organization.”
No successor will be named; board member Peter Bauer will take over as spokesperson for the board and focus on the “IFX 10-Plus” plan. “During the last years, the future direction of the company has been largely set,” he said in a statement. “But we have to execute and — if necessary extend — our measures step by step and at high speed.”
The departure of Ziebart wasn’t entirely a surprise. “Rumors had been out there for several weeks on Ziebart’s resignation,” noted Eerik Budarz, an analyst with Germany’s Bankhaus Metzler, quoted by Forbes, adding that Ziebart had faced pressure for a while due to mounting losses and probably was pushed out. Also, the departure could sweep in some freshness to some among Infineon’s leadership, who clung to “old habits” from slower days at former parent Siemens. “Siemens managers were not used to a high speed type of business,” Budarz said. “It was never said to be harmonic management.” The Financial Times Deutschland points out that the move could be interpreted as Infineon chairman Max Dietrich Kley cementing his power further, since Bauer was promoted only to a “spokesperson” role, not to fill Ziebart’s president/CEO shoes.
And his departure could reenergize stalled progress toward larger industry pursuits. Credit Suisse analyst Adrien Bommelaer [link from Barrons’ Eric Savitz] suggested Ziebart supported smaller M&A deals, but opposed bigger ones (e.g. NXP or Freescale), both of which had been rumored in local press. Die Welt, for example, has reported that Infineon could acquire NXP in return for a 40%-50% stake to private equity firm KKR. And Kley reportedly has been working behind the scenes on a possible deal to merge (as the larger party) with Freescale, though the latter’s crushing $17B+ debt (nearly twice that of Infineon) is a stumbling block.