http://todayinsingapore.wordpress.com/2009/08/05/seagates-swansong/
Seagate’s Swansong
By todayinsingapore
Seagate Technology announced yesterday that it will shut down its Ang Mo Kio factory by end of next year, moving its facility to “other Seagate sites”, and throwing 2,000 into the unemployment pool. The braggart of Singapore’s “unique” tripartite management, Lim See Say, seems to have been caught unawares (”Job losses could be worse if not for tripartite partners, says Lim Swee Say” By S Ramesh, Channel NewsAsia, August 5, 2009).
Singapore’s disk drive industry started with Magnetic Memories International (MMI) hard drives and Tandon’s floppy drives in 1979, leading Seagate to choose Singapore as a production site in 1981. Although output grew to more than 48% of the global output of 60 million units, Singapore began to lose its cost-competitiveness to its neighbors in the early 1990s. Notably, Conner began to set up new plants in Penang, Malaysia. Yet, in 1995, Seagate invested $200 million to build a huge manufacturing complex to consolidate its manufacturing facilities in Singapore.
In March 1996, Singapore Technologies (ST) acquired the failing disk drive maker Micropolis to concentrate on the mid-range and low-end workstation market, going for volume and market share. ST’s revenues were $2.3 billion in 1995, and the company is “government-linked” – in other words, the state has provided all the venture capital. Soon after, Micropolis was liquidated in 1997 with debts of $630 million.
One version of the debacle has it that Seagate had hosted an EDB (Economic Development Board) visit to their plant, during which they went into great details of their business and bared all to the government guests. Next minute, ST announced they were going into the hard drive business. Seagate executives were not pleased at all, and word had it that they “persuaded” their suppliers to boycott the new Micropolis. Without parts, they were dead, despite the exciting new products that were in the pipeline. At that time ST’s Managing Director, Ho Ching, was also Deputy Chairman of EDB.
Sometimes, truth is stranger than fiction.
CEO and President Al Shugart, referring to a Agence France-Presse report, is quoted as saying, “I was mainly concerned with the fact that our plans which we shared with the EDB would get shared with Micropolis. I’ve got to give all my information to the government, so they should not compete with me. (But) that was just one point that I brought out in my being uncomfortable with Singapore Technologies, one of many points.”
Shugart had lunch with then BG (Deputy Prime Minister BG Lee Hsien Loong), and told him, “I don’t understand why you guys did the Singapore Technologies thing. Everything else you’ve done, you’ve done perfectly. How did you screw this up?” According to Shugart, BG responded: ‘Well, if it turns out that we screwed it up, we’ll get rid of it’. That sounds kind of familiar.
Seagate’s Swansong
By todayinsingapore
Seagate Technology announced yesterday that it will shut down its Ang Mo Kio factory by end of next year, moving its facility to “other Seagate sites”, and throwing 2,000 into the unemployment pool. The braggart of Singapore’s “unique” tripartite management, Lim See Say, seems to have been caught unawares (”Job losses could be worse if not for tripartite partners, says Lim Swee Say” By S Ramesh, Channel NewsAsia, August 5, 2009).
Singapore’s disk drive industry started with Magnetic Memories International (MMI) hard drives and Tandon’s floppy drives in 1979, leading Seagate to choose Singapore as a production site in 1981. Although output grew to more than 48% of the global output of 60 million units, Singapore began to lose its cost-competitiveness to its neighbors in the early 1990s. Notably, Conner began to set up new plants in Penang, Malaysia. Yet, in 1995, Seagate invested $200 million to build a huge manufacturing complex to consolidate its manufacturing facilities in Singapore.
In March 1996, Singapore Technologies (ST) acquired the failing disk drive maker Micropolis to concentrate on the mid-range and low-end workstation market, going for volume and market share. ST’s revenues were $2.3 billion in 1995, and the company is “government-linked” – in other words, the state has provided all the venture capital. Soon after, Micropolis was liquidated in 1997 with debts of $630 million.
One version of the debacle has it that Seagate had hosted an EDB (Economic Development Board) visit to their plant, during which they went into great details of their business and bared all to the government guests. Next minute, ST announced they were going into the hard drive business. Seagate executives were not pleased at all, and word had it that they “persuaded” their suppliers to boycott the new Micropolis. Without parts, they were dead, despite the exciting new products that were in the pipeline. At that time ST’s Managing Director, Ho Ching, was also Deputy Chairman of EDB.
Sometimes, truth is stranger than fiction.
CEO and President Al Shugart, referring to a Agence France-Presse report, is quoted as saying, “I was mainly concerned with the fact that our plans which we shared with the EDB would get shared with Micropolis. I’ve got to give all my information to the government, so they should not compete with me. (But) that was just one point that I brought out in my being uncomfortable with Singapore Technologies, one of many points.”
Shugart had lunch with then BG (Deputy Prime Minister BG Lee Hsien Loong), and told him, “I don’t understand why you guys did the Singapore Technologies thing. Everything else you’ve done, you’ve done perfectly. How did you screw this up?” According to Shugart, BG responded: ‘Well, if it turns out that we screwed it up, we’ll get rid of it’. That sounds kind of familiar.
