It's time for AMD to give it up (or fire executives)
AMD has undergone a significant amount of trouble this past year. And while the company believes it can turn things around, Don Reisinger thinks it should sell itself to the highest bidder or fire each and every executive.
If you've been following the AMD saga lately, you probably know that this company is in utter disrepair. After shocking the world just a few years ago with a downright unbelievable set of processors that blew Intel's socks off, AMD awoke a sleeping giant that has proven to be more formidable and dangerous than ever before.
To make matters worse, AMD is in financial trouble and hopes to turn a profit by the latter half of 2008. Oh and in case you're keeping score, the company just admitted that it overpaid for ATI and will need to adjust its financial statements to reflect that error in judgment.
But for all of its issues, AMD is still the world's number two microprocessor maker in the world and it does control one of the major video card manufacturers. But is this enough to justify its existence? If it is, shouldn't something be done with the company's decision-makers to jumpstart things a bit?
Regardless of where you stand on this issue, there's one element to this story that should not be overlooked -- AMD is in dire straits right now and its chances of getting out from under it are dwindling with each new processor from Intel.
If you ask me, AMD should be sold to the highest bidder and liquidated. Of course, if you think that's a bit extreme, fire all of its loser executives and try to find some people who actually know how to run a business and compete against larger competitors.
Trust me, it's the only way.
"We have gone through a very difficult time, reacted quickly and decisively, and we are on our way to really have, I believe, a phenomenal transition year in 2008," CEO Hector Ruiz said at an analyst conference Thursday in New York.
Don't you just hate the corporate line of garbage that continually flies out of the mouths of executives who have no idea what's going on?
If Ruiz and company reacted quickly and decisively, why doesn't AMD have anything slated for release in the near-future that can actually compete with Intel? Sure, he can promise us big things for the coming months, but unless he gives us some details, what good is it?
And while AMD has already said that its plans for Bobcat and Bulldozer should revolutionize the industry, all it has really said about either product is their ability to reduce power consumption and that they will be built them from the ground up. Whoop dee doo.
The future of AMD looks bleak, to say the least. Just because the company believes it can turn itself around, what makes anyone believe that's true? It's a company that will be run by the same fools who have driven it into the ground and oh, there's this company called Intel that's kicking the hell out of it every week.
Here is how to fix AMD:
Choice one: Sell it
A bit too much, you say? Why? AMD is obviously in dire straits, but it has a number of promising attributes that would attract some companies who think they have what it takes to make it big in the processor industry.
Not only does the company own ATI, which contrary to popular belief, was a good move on the part of AMD, it has a solid infrastructure in place along with a number of plants that should make for a low barrier to entry.
Simply put, AMD is not failing because of poor quality or downright garbage products, it's failing because the management has no idea about how to compete with a monstrous company like Intel.
Choice two: get rid of all decision-makers
Much of AMD's troubles this year have been the result of poor management from CEO Ruiz and others. With widespread technical problems hindering its ability to get Barcelona chips out to customers in mass quantities, AMD lost out on a significant portion of the market and the opportunity to (possibly) turn things around.
And while some may call this an error in production or some kind of technical glitch that was beyond the control of management, I'm not so quick to agree. By promising too much and not delivering on those promises, AMD single-handedly created a firestorm that quickly became a PR nightmare.
At least Ruiz realizes it though: "We blew it and we're very humbled by it and we learned from it and we're not going to do it again," Ruiz told financial analysts in New York Thursday.
Knowing that the management of this company is downright incapable of competing against AMD, wouldn't you think the board of directors would find a replacement as soon as possible? Think again: the board increased Ruiz's annual base salary by 7.4 percent to $1.124 million. And considering he made $12.8 million last year after stock awards were factored in, it looks like the only person who's laughing is Ruiz -- all the way to the bank.
Can someone please explain to me why a company that had $1.6 billion in revenue and lost $396 million in the last quarter should be increasing the pay of its chief decision-maker? To make matters worse, this company is competing against another that made almost $11 billion in revenue and enjoyed over $1 billion in profit.
Wow. Does it get any worse?
The moment of truth for AMD is upon us. Can the company turn it around and make a fight out of this battle with Intel or will it fold? Unfortunately, the answer may be the latter if it keeps its current cadre of executives in place to run it into the ground.
Suffice it to say, with the current group of managers at the helm, the AMD ship will sink faster than we once thought. It might be time to say goodbye.