After Ulrich Schumacher's shock departure as CEO of Infineon, two more executives have resigned and an orchestrated putsch by Siemens appears to be in the offing.
The company said in a statement: "There will be a change of direction in the Corporate Center and its Communications Department at Infineon Technologies. In this connection... with their mutual consent and immediate effect, the head of the corporate center, Matthias Poth, and the head of communications, Christoph Sieder, have resigned their positions at the company."
So, asked or told to go? The latest communications-related news from Infineon was an advertising campaign at airports, fairly typical corporate stuff and not the sort of thing that would put a communications head on a resignation course.
According to The Inquirer, German newspapers commented over the weekend about Schumacher's ousting.
A Frankfurt Sunday newspaper claimed Infineon chairman Max Dietrich Kley told Schumacher to resign or be fired and then became the interim CEO. Meanwhile, Die Welt suggested that the Siemens chairman of the board, Heinrich von Pierer, was personally involved in the decision that the authoritarian Schumacher had to go. He concentrated too much on image, might face legal investigations and, it was said, might even have been involved in corruption.
Another German journal, c't magazine speculated that an excess of outsourcing by Infineon and possible law-breaking wouldn't have helped Schumacher's cause. And Frankfurter Allgemeine suggested that he might face an investigation by German authorities.
Infineon under Schumacher had been talking about a corporate restructuring with a corporate communication discussing it in April last year.
The release mentioned "a wide-ranging series of measures to force the pace on the corporate restructuring that is already being driven by various programmes. A return to the profit zone, and sustained success for the company, are the paramount corporate objective... Infineon is banking on realising massive savings, including by the further streamlining of corporate structures as well as through the implementation of the (productivity increase) programme."
There was to be a massive cost-cutting programme with corporate structures and optimised processes. Business units would be relocated, processes outsourced, up to 90 jobs lost, and the company HQ might have been moved to, for example, Switzerland or elsewhere in Europe, the US or even Asia.
There was labour unrest about the changes. On the German engineering union IG Metall website it read: "The Porsche (Schumacher) has flung out of the racetrack." It mentioned disagreements between Schumacher and his COO, Andreas von Zitzewitz, and CFO, Peter Fischl. Apparently Schumacher introduced annual evaluations for all Infineon staff and the lowest-achieving five percent of the workforce could face dismissal. This did not sit well with the powerful workers' unions.
Christoph Sieder was brought in by Schumacher as head of a restructured corporate communications department in May 2003 and charged with providing "optimal support for the strategic realignment of Infineon Technologies". The department would become "more target-group oriented, flexible and hard hitting" - classic Schumacher bluster and a clear attempt to push Schumacher's line.
So the combination of corporate high-level restructuring, labour unrest and ongoing legal problems finally brought Schumacher down. An Infineon headquartered in Singapore, with devolved business units around the globe, would not have been very German. Ironically, however, Infineon reported its first profit, in over two years, in the quarter to September 2003. It appeared to be making progress, albeit of the sort that upset senior Infineon staff and the Siemens chairman of the board.
Possibly the DRAM price-fixing investigations are little more than a side-show. Or maybe Schumacher's depature will provide a useful scapegoat for an incoming CEO when the full story comes out.