5 ms·
The option is not a binary between "let it fail" and "no strings attached bailout." If things get bad enough for Intel, the precedent that makes the most sense
by commandar 2y ago
The option is not a binary between "let it fail" and "no strings attached bailout."
If things get bad enough for Intel, the precedent that makes the most sense is to follow the model that was used with GM: the company enters bankruptcy, existing investors and creditors are wiped out, and a new corporate entity backed by the fed.gov steps in and assumes the assets and operations of the company. Once things have sufficiently stabilized, the government can then divest its ownership in the company.
Intel is economically and strategically important enough that just letting it collapse without a plan to pick up the pieces is a serious footgun. We have a framework for handling this kind of situation that has been shown to work without rewarding those who caused the problem. It'd be silly not to use it.
- PopePompus 2y agoIt's not just the investors and creditors that need to be wiped out. Above all else the managers need to be fired, with no bonuses or golden parachutes.
- tester756 2y agoWhich manager receives golden parachute? wtf?
- electricwire 2y agoFor some hires, they wont sign on without penalties for early dismissal
- stogot 2y agoWho?
- nothercastle 2y agoExecutive mis management is why companies fail. The majority of the bad decisions are made at the executive level.
- tester756 2y agoI'm asking which managers are receiving golden parachute. Managers and executives are different groups of people.
- Gibbon1 2y agoThe 'the only reason a company exists is to make money for the stockholders' is why we're in this mess right now. Because that's the regime management is operating under. And they are delivering what's demanded. Yeah management is looting companies to the detriment of their long term health. But that's allowed because it aligns their incentives with predatory capitalists.
- nothercastle 2y agoStockholders are secondary to c suite. The executives are looting from everyone stockholders included
- s1artibartfast 2y agoMaking the investors live with market consequences is the only way to hold managers accountable for performance. Everyone wants better management, but it wont magically solve itself. Those with the power to drive that change need to have an incentive to do so.
- aitchnyu 2y agoUmm, is there a line drawn so that a middle class investor doesnt lose his money? Same for a lower level manager who isnt independently wealthy.
- AtlasBarfed 2y agoSigh, I'm sure there is zero consideration for a antitrust-style breakup. All I saw on a quick scan was "hey does any other company want to acquire parts of them" which is just another way to say "does anyone want to reduce competition even more". I get that there is probably only one top-end fab in Intel and that would be hard to split across two entities. But if you split Intel into three entities, they might (gasp) hire a bunch of the engineers that have steadily fled intel or be chopped off in shortsighted layoff rounds. You might get (gasp) innovation. If you give all three the access rights to Intel's IP, things would probably be FINE in the long run. Give three separate companies a couple fabs and the IP, and see what happens. Intel has FIFTEEN fabs. So hand five to each of them. Intel is a shell because existing management is financial "wizards" and war-on-labor MBAs that are trying to manipulate the stock price to hit options targets. If you split the companies, they have to compete on engineering, or they die. You can probably also wipe away a lot of the management because the companies will have to do "real work" in the medium run and their "skillsets" won't really apply. The MBA types will all say that's impossible. IMO that's why we should do it, because all the people that failed the industry and company are opposed to it.
- kranke155 2y agoThe dichotomy is useful when people want to manipulate the public. It’s either bailout or not.
- hedora 2y agoThe GM bailout was an unmitigated disaster. Their cars are uncompetitive garbage to this day. When they accidentally make something their customers like (the Bolt, CarPlay), upper management intervenes and discontinues it. The US would be much better off if the engineers and factories they are squandering were allocated to other companies.
- marcosdumay 2y agoThat's what "let it fail" means. That's classical bankruptcy.
- paulddraper 2y agoAre using GM as a SUCCESS story? Haven't seen that before.
- stego-tech 2y agoAdmittedly my language was deliberately more inflammatory than it had to be, because I wanted to challenge folks to basically post what you just did. Rather than an endless reform-a-palooza, seizing upon current apathy to champion “let it fail” forces folks to reckon with the reality that nothing is permanent, and if the status quo is unworkable, how do we destroy and rebuild in a constructive way? Excellent response, gave you the upvote so others will hopefully read it.
- hakfoo 2y agoConrail might be a better alternative model. It really did succeed well enough to re-float and become a competitive endeavour. The state probably did a better job than a private takeover could have because: - They had effectively infinite backstop-- they could afford to spend years and front load a lot of costs to fix the mess - They had a mandate to restructure the sector beyond a single company. I'd expect a nationalized Intel would have an easier time pivoting to new models, while private investors might be too afraid of killing their current golden geese for, say, a full fab spin-off or becoming a more aggressive x86 licensor.