By Russ Henke on 11/22/2008 7:02 AM

The turbulence at EDA vendor Cadence Design Systems has been the topic of frequent blog entries in this space since mid-summer 2008. While the company’s Q1-Q3 2008 financials have still not been re-stated, and a new CEO has still not be named to replace Mike Fister, who resigned in mid-July, Cadence did make some executive promotions this week aimed at stabilizing the employee base. On November 21, 2008, Cadence announced the promotion of three senior managers to executive positions in R&D and Worldwide Sales and Field Operations. All three come from inside Cadence ranks and all report to the “Interim Office of the Chief Executive.” Dr. Chi-Ping Hsu, 53, was named senior vice president of research and development for the Implementation Products Group. Dr. Hsu joined Cadence in 2003 from Get2Chip, Inc. Mr. Nimish Modi, 46, was named senior vice president of research and development for the Front End Group. He came to Cadence in 2006 from Intel. Finally, Mr. Tom Cooley, 46, was named senior vice president of Worldwide...

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By Russ Henke on 11/20/2008 9:42 AM

Despite the economic and security importance of the US Auto Industry and the strong arguments to the contrary from many sectors (see for example the November 19, 2008 blog entry in this space containing excerpts from Pat Buchanan), prospects for an immediate US auto industry bailout look bleaker today (November 20):The AP reported, "Congress, unwilling or unable to approve a $25 billion bailout for Detroit's Big Three, appears ready to punt the automakers' fate to a lame-duck Republican president. Caught in the middle of a who-blinks-first standoff are legions of manufacturing firms and auto dealers -- and millions of Americans' jobs -- after Senate Democrats canceled a showdown vote that had been expected Thursday (today)." The Politico added that the "year-end drive to win new aid for the ailing auto industry was near collapse." The Wall Street Journal added that Senate Majority Leader Harry Reid "backed away from efforts to force a vote this week" on the Democratic bailout bill. He said he "might move...

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By Russ Henke on 11/19/2008 11:45 AM

Further to previous blog entries in this space, we call your attention to key excerpts from the November 18, 2008 blog of Patrick J. Buchanan, entitled, “As GM Goes, So Goes the GOP”:In the original bailout, “Hank Paulson demanded $700 billion to haul away the trash in the dumpsters of JPMorgan Chase and Goldman Sachs — assuring us that he could hold a garage sale of the junk. Now (mid-November) we hear from Paulson that the $700 billion Congress voted will not, after all, be used to buy up rotten paper on the books of the big banks. Some banks are using the cash to buy other banks.So Republicans are right to be enraged. But they are now about to do something terminally stupid. With GM, Ford and Chrysler teetering on the brink, they are turning a cold stone face to Detroit and are about to follow the counsel of that quintessential Bushite Dick Darman, who said of our computer chip industry, “If our guys can’t hack it, let ‘em go.” America responded — by letting George H.W. Bush and Darman go.Are Republicans aware...

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By Russ Henke on 11/18/2008 8:14 AM

Further to recent blog entries in this space, these figures about the deteriorating market caps of the Big 3 Electronic Design Automation (EDA) Vendors are sobering:

• Synopsys has lost 36% of its value since January 1, 2008. Market Cap is approximately $2.32 billion at this writing.

• Mentor Graphics has lost 49% of its value since January 1, 2008. Market Cap is approximately $557 million at this writing.

• Cadence has lost 77% of its value since January 1, 2008. Market Cap is approximately $975 million at this writing.

By Jack Ring on 11/17/2008

Most of us live in an environment of multiple, interacting factors, each exhibiting an S curve behavior. First phase exhibiting accelerating growth, curling upward. Second phase of approximately constant growth. Third phase of decelerating growth. During the third phase a Phoenix often arises to start a new, upward, S curve. Prof. Adizes, UCLA, provides an S-curve based model in "Corporate Life-cycles" Prof. Leontief adn others have modeled economic life cycles. Sometimes the new S curve gets started early. Sometimes the new curve doesn't kick in until the ramifications of the older S curve have been manifest in various negative or "things aren't what they used to be, who's fault is it?" ways. Many people do not realize that the U.S. has been on a 25 year economic boom, the longest in history. They have simply become accustomed to the constant growth. Too many, not understanding systems, plan ahead as if there is some guarantee of growth. When the S curve starts to bend over (negative acceleration)the first reaction is naievty, then denial, then outrage, then fault finding, etc. ...

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By Russ Henke on 11/15/2008 9:20 AM

Further to the blog entry in this space yesterday (November 14, 2008), you may be interested in the article below that appeared in the New York Times today (November 15, 2008):

Tech Industry, Long Insulated, Feels a Slump (ASHLEE VANCE)

Paste this URL into your browser:

http://www.nytimes.com/2008/11/15/technology/15tech.html?_r=1&th=&adxnnl=
1&oref=slogin&emc=th&adxnnlx=1226769111-PR7FqvP6jAozYEOGWeHAxg

By Russ Henke on 11/14/2008 5:37 PM

With the recession spreading to the semiconductor sector, the impact on Electronic Design Automation (EDA) vendors can’t be far behind. And the woes of the semiconductor companies are making news.Applied Materials, National Semiconductor and AMD, the latest in the chip sector to feel the economic slump, announced cuts in their work forces and also announced downbeat financial projections.The Wall Street Journal reported today (November 14, 2008) as follows: Applied, considered "the sales leader among makers of tools for manufacturing chips, said it will cut 1,800 jobs, or 12% of its work force, through a combination of attrition, voluntary severance and other reductions." The company "announced the planned reductions -- expected to reduce expenses by about $400 million a year -- along with a 45% drop in profit for the fiscal fourth quarter ended October 26, 2008 and said it expects further declines in sales and orders in the current quarter." National Semiconductor "said it will cut nearly 5% of its work force,...

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By Russ Henke on 11/13/2008 8:22 AM

As if we didn’t have enough to worry about, the November 13, 2008 Wall Street Journal reports, "Three of the largest makers of computer and video screens, Sharp Corp., LG Display Co. and Chunghwa Picture Tubes Ltd., pleaded guilty to criminal price-fixing charges and will pay fines totaling $585 million. As a result of the price fixing," the US Justice Department said, "electronics manufacturers and, ultimately, consumers were forced to pay higher prices for televisions, cellphones and other products using liquid-crystal displays." According to the US officials, "Products affected by the price fixing included Apple Inc. iPods and Razr phones from Motorola Inc. as well as laptops and computer monitors from Dell Inc." The US Justice Department also noted, the New York Times reports November 13, 2008, "Prices for the flat screens in televisions, personal computers and cellphones have plummeted in recent years -- but the decline would have been even faster if it hadn't been for an international price-fixing...

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By Russ Henke on 11/11/2008 5:49 PM

While President-elect Obama and Democratic House and Senate leaders are pushing urgently for quick action on financial assistance to help the troubled US auto industry, with hundreds of thousands of jobs hanging in the balance, we discover today (November 11, 2008) a semi-secret giveaway (after the fact) to banks that so far are hardly helping boost the economy, to wit:   Some of the nation's biggest banks are in for a windfall - on top of the $700 billion government bailout - thanks to a new tax    policy quietly issued by the Treasury Department. The notice gives big tax breaks to companies that acquire struggling banks   hit hard by the mortgage crisis. In some cases, the tax breaks could exceed the cost of acquiring the banks, according to   analyses by private tax experts! The change could cost the Treasury as much as $140 billion extra by enabling firms      that acquire struggling banks to use more losses incurred by those banks to offset their own taxable profits.   The notice was silently issued September...

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By Russ Henke on 11/9/2008 9:01 AM

Further to the blog entries in this space of November 6, 2008, named, “Latest Fuld News…”, and on November 4, 2008, entitled, “On Executive Pay & the Bailout”, and of September 18, 2008, called, “Poster Child”, the following article appeared in the New York Times on November 9, 2008:    “How the Thundering Herd Faltered and Fell” This article by Gretchen Morgenson is compelling reading about how Merrill Lynch finally imploded in the unregulated financial environment of the last 8 eight years.But one telling factoid emerged that just has to be explicitly added to our blog entry list of “poster children” executives who were handsomely rewarded after driving their companies to the brink of financial ruin:    In October 2007 Merrill’s board ousted Mr. E. Stanley O’Neal. On top of the $70 million in compensation he was        awarded during his four-year tenure as chief executive of Merrill Lynch, Mr. O’Neal departed with an exit package    worth $161 million. Recall that Merrill Lynch was taken over by Bank of America...

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By Russ Henke on 11/7/2008 12:04 PM

The US unemployment rate zoomed to a 14-year high in October 2008 as another 240,000 jobs were cut, far worse than expected, providing unquestionable evidence of Bush 43’s deepening second recession. The new data, released November 7, 2008 by the US Labor Department, showed the US jobless rate rose to 6.5% in October from 6.1% in September. Current unemployment has now surpassed the high seen after Bush 43’s first recession in 2001, when the US jobless rate peaked at 6.3% in June 2003. This October’s decline marked the 10th straight month of payroll reductions, and Labor Department revisions showed that job losses in August and September 2008 were actually much deeper than first estimated. Employers cut 127,000 positions in August, compared with 73,000 previously reported. And some 284,000 jobs were cut in September, compared with the 159,000 jobs first reported. So far in 2008, 1.2 million jobs have disappeared; over half the decrease occurred in the past three months alone.What a legacy!...

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By Russ Henke on 11/6/2008 7:22 AM

On November 5, 2008 Cadence announced the commencement of a restructuring program designed to “focus the company's strategy, streamline the business and improve operational execution and financial performance.” Once completed, the company expects to achieve annual operating expense savings of at least $150 million through a combination of workforce and other expense reductions. The company expects to eliminate at least 625 full-time positions, representing 12% of its global employee base, plus a substantial number of contractors and consultants. Because of varying regulations in the jurisdictions and countries in which Cadence operates, workforce reductions will be realized over a period of time and are expected to be completed in the second half of fiscal 2009. Cadence expects to record a restructuring charge of approximately $65 million to $70 million pre-tax, $48 million of which will be recorded in the third quarter of 2008. As this blog entry is posted, Cadence shares are trading at $4.33 each, yielding a...

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By Russ Henke on 11/6/2008 7:18 AM

Further to the blog entries in this space of November 4, 2008, entitled, “On Executive Pay & the Bailout” and of September 18, 2008, called, “Poster Child”, the following information appeared on the news wires late on November 5, 2008, paraphrased here:Richard Fuld will now step down as Lehman Brothers CEO by the end of the year, and he won't receive severance or a bonus. He will then stay on as chairman of the board. Fuld has been a target of public outrage over risky practices on Wall Street which helped send the US economy spiraling into turmoil.New York State Comptroller Thomas DiNapoli has accused Fuld of leading Lehman to its Chapter 11 filing on September 15, 2008. "Mr. Fuld's decisions drove the company toward ruin, as his board stood idly by," DiNapoli argues in court papers filed late November 4, 2008, asking a bankruptcy judge to appoint an independent investigator in the case.Comptroller spokesman, Jim Fuchs, said Fuld’s resignation would be a good first step. While Fuld had offered to resign on September...

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By Russ Henke on 11/4/2008 11:09 AM

One of the most irritating issues for most Americans in recent years, has been the unprecedented rise of corporate executive salaries, especially those of CEO’s, compared to the incomes of average US workers. In frequent cases, this ratio has reached 400:1. This disparity has become especially galling since 1999, because average workers’ income in the US has not even kept up with inflation, while CEO pay has ballooned.Such irritation reaches still another level when CEO’s who head poorly performing companies are finally ousted, but having still collected exorbitant pay and lucrative golden parachutes. (See for example the blog entry in this space from September 18, 2008, entitled, “Poster Child”, which discussed Nicholas Kristof’s Op-Ed piece published in the September 18, 2008 New York Times, “Need a Job? $17,000 an Hour. No Success Required." Kristof’s article was about one Richard Fuld, the longtime chief of Lehman Brothers. He took home nearly half-a-billion dollars in total compensation between 1993 and...

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By Russ Henke on 11/3/2008 6:02 PM

Further to the 10/28/08 blog entry in this space….Today, on the eve of Election Day, the news broke that Bush 43’s Treasury Department has turned down a request by General Motors for a mere $10 billion to help finance the automaker’s possible merger with Chrysler. Meanwhile, it was announced today that GM's US sales plunged 45% in October 2008, the worst drop of any major automaker. Indeed, if GM's sales were adjusted for US population growth, October 2008 would be the worst month for GM since World War II. (For its part, Chrysler’s sales dropped 35% in October 2008).The jobs of hundreds of thousands of US auto workers hang in the balance.Simultaneously, Bush 43’s Treasury Department said today that it plans to borrow more than $500,000,000,000 in the current October-December 2008 quarter. And as its parting gift to the next administration, the government will likely have to borrow another $368 billion in the first three months of next year; moreover, the government's borrowing for the whole of next year will...

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