I witnessed the unusual sight last week of seeing a CEO discussing his employment with the financial community.
Carlo Bozotti, chief executive officer, of ST was taking questions during a financial and media analysts’ day held in London on May 16 when he was asked by an analyst what would happen when his contract runs out in 2014. Would he go or seek another term in office?
ST has been suffering from losses and struggling with cost of owning its share in the mobile chip joint venture ST-Ericsson NV, a venture it has now decided to exit.
While few financial analysts would appear to have any problems with the decision to close down the joint venture, it has been proved to be a disastrous move for ST since its formation in February 2009. So the context of the question is clear: that Bozotti formulated the plan to join together the mobile chip businesses of ST, NXP and Ericsson to try and achieve critical mass in the global market and it has not worked.
In response to the questioner Bozotti said: "My mandate is over during the course of 2014. My aspiration is to stay." He added: "I am 61 at the end of this year. To stay for another mandate is compatible with my age."
Compatible it may be, but likely is another matter. Much will depend on how quickly ST can bounce back once the weight of ST-Ericsson is lifted from around its neck.
The audience was told at the meeting of how about 1,000 engineers from ST-Ericsson are being redeployed to work across the surviving business units in areas like digital consumer electronics, set-top box ICs, MEMS, microcontrollers. And the second half of 2013 and the first half of 2014 will be the time for STMicroelectronics overall to start outperforming its peers.
If it does not, and a number of analysts pointed out that the business benchmarks Bozotti was setting for ST are modest, then the supervisory board may consider that more drastic solutions are necessary for the company and that Bozotti will not be the man to carry them out.