In fact, Seagate has 3 VP's of engineering from Conner..... It IS these guys that make the decisions about what technologies to roll into what new products.
Wait a minute. Don't these ex-Conner executives have to coordinate their efforts with the folks from the recording media and head manufacturing units, both of which are in the process of major manufacturing transitions? Don't the SEG veterans, the SVPs, have the juice because they control the capital budget dollars that support the level of technology of their manufacturing activities? The only executive from Conner with any kind of juice is, I believe, Watkins and his recording media group is way ahead of schedule.
Just to let you know where I'm coming from, I'm extremely wary of slams on management that focus on the ex-Conner executives. Conner was the industry weasel that initiated the price wars that drove the value of everybody's option packages down. Consequently, there has been a natural accumulation of animosity towards the executives of Conner. While it is fair to criticize the ex-Conner executives who survived the turf wars of the merger of cultures, one loses credibility, IMO, when one doesn't acknowledge their contribution to the record December and March quarters when, guess what, they lagged the density race even more than they do now.
This is not to say that there are no problems at SEG because the June quarter was clearly a disastrous one. In sifting through the rubble, however, I have yet to be persuaded that the problems are not manageable. I have several data points from the last conference call that I want to match with data points from the 10/14 conference call in order to determine, for example, just how well the manufacturing transition, particularly in MR heads, is going or how
responsive they are now to the unique requirements of the commodity desktop, which as you say, puts a premium on execution and time to market.
If my assessment is correct, there is tremendous earnings leverage in SEG because they haven't been operating at peak efficiency like WDC. It is, after all, the lowest cost producer. |
