I was sat alongside Brian Fuller, who was then EE Times editor-in-chief, in the ballroom of a London hotel as I heard Ulrich Schumacher, then CEO of Infineon Technologies AG, talk about the unthinkable.
It was December 2002 and I remember the frisson that went through me as I realized what Schumacher was saying. He was responding to a question that seemed to be either idiotic, alcoholic or planted. "Would Infineon move its headquarters from Munich?"
Schumacher started off slowly by talking about how much Infineon was already an international company with manufacturing at various locations around the world and teams of accountants in Portugal doing the bean counting. Then he warmed to his task. Schumacher said that the tax regime his company experienced was some 18 percent worse than that enjoyed by some competitors and that this difference was unacceptable. He added that by being based in Germany, Infineon was battling against an unacceptable tax burden and was prepared to do, "whatever is necessary" to alleviate the cost
Having floated this radical idea Schumacher then calmed things down by saying that such talk was premature. "Would we go somewhere else? It's not something we would do lightly," Schumacher concluded. In subsequent reporting
Switzerland and Singapore emerged as leading candidates for a relocated Infineon.
I reckon the Infineon supervisory board didn't like that kind of talk and with hindsight it seems like it was the beginning of the end for Schumacher at Infineon. Although Infineon had been formed on April 1, 1999, and conducted an IPO in March 2000, that most German of companies Siemens was still a substantial shareholder and probably dominated the board.
Schumacher lasted another 15 months until March 2004 when he unexpectedly
resigned amidst a disagreement over strategy. At the time the IG Metall union blamed the controversy on tough labor policies Schumacher was trying to bring in and "image-damaging discussion of the dislocation of the company's headquarters to Asia."
Well here we are 10 years later and now several companies are only too eager to say how they are basically far-eastern companies and well plugged into the greater China chip and equipment manufacturing nexus. They certainly don't expect to lose their jobs for such talk.
Rick Clemmer, CEO of NXP Semiconductors NV was recently happy to describe NXP as being
practically a Chinese company. However, that did not mean Clemmer was proposing to move NXP's headquarters from Eindhoven, The Netherlands. Quite the contrary: "The only reason we are still a Dutch company is because we enjoy our tax breaks in the Netherlands," he said.
And ten years on talk about corporate tax rates is also back in vogue with the number of companies setting up shell companies to move revenue streams about seemingly on the increase. Apple is attracting a lot of anger for the way it has set itself to minimize its
tax liabilities but it is certainly not the only company.
After leaving Infineon Schumacher took a position leading Chinese foundry Grace Semiconductor so at one level he practiced what he preached. Perhaps he was an executive ahead of his time?