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Technology Stocks : SDLI - JDSU transition -- Ignore unavailable to you. Want to Upgrade?

To: Eashoa' M'sheekha who wrote (3247)	7/26/2002 8:39:08 PM
From: OWN STOCK	Read Replies (2) \| Respond to of 3294

KCFOS: Most of the stuff you talk about is old hat, and was already in place. R&D always did live on Government contracts. The only thing ever funded was product development. In the old days it was cheap to do, and as a result they had a big catalog of high margin products selling to geeks in lab coats in low volumes. Quality was: try it, and if it works, great. If it fails, buy another. Today, the products they make have to be qualified by them and their customers to very high standards (Telcordia). Quality is: if it fails, lose a major customer. The key to me from the telcon was the phrase: cost of qualification on new products. What I am afraid was not said was they (also) have to get it back on existing products that used to be made in locations they have closed. IOW, when they went around closing plants to save costs, they "discovered" they had to re-qualify the products coming from the new production lines. That is very high cost and risk, and the hint I got was they ignored that part of the equation. Probably assumed it would be easy. Postulated history and future: 1) Market booms, stock soars, top staff get very rich: top 10% pull the rip cord (remember KK?). 2) Market tanks, 80% of top technical staff wakes up and cashes out: able to retire comfortably (many, many). 3) Company downsizes, layoffs begin, morale drops to zero. 4) Plant closures, manufacturing consolidation. 5) Recipe lost, qualification lost, customers PO'd. 6) Surprise: Oops. 7) Last 10% of top technical staff leaves under intense pressure to fix the problems they did not create. 8) Get new COO, (white knight or axe-man?), classify tax refund as income, speak about ethics and honesty, all the while suing customers for payment, etc (yesterday's telcon), 9) Recipe still lost, sales plummeting. 10) Close more plants, eliminate entire product lines. 11) Surprise: Cash going faster than planned. 12) Golden parachute deploys with the remaining cash. 13) Look for another white knight. From another POV: lightreading.com JMHO -Own