Running to catch up
1 min read
Renesas seems to be forever running to catch up. The problem is that it isn't catching up.
When the 'old' Renesas merged with NEC Electronics in April 2010 to form the 'new' Renesas, it was faced with the challenge of merging two sprawling organisations with duplicated manufacturing facilities, largely duplicated product lines, duplicated marketing operations and typical Japanese staffing levels. It was also faced with a softening market.
The problem was – and remains – that both companies were accustomed to working in a certain way. Employment was all but guaranteed, bureaucracy ruled and decision making took place on a geological time scale.
It has been addressing the issues: production capacity is being scaled back, albeit slowly; head count has been reduced by 20%; and overheads have seen a similar decline. It is also looking to move some production to foundries. Even with the cuts, it's still behind the game because its sales have dropped.
The latest presentation of where Renesas is and where it wants to go looks like the product of an MBA think tank; it's full of worthy phrases, but short of the radical actions which a company in Renesas' position needs to take.
You are left with the feeling that while it knows what needs to be done, it has yet to work out how to do it. But it does admit that it needs to speed its decision making. That's a start.
