I saw Micron CEO Steve Appleton at a poker game the other night. Texas hold'em to be specific. He had a big pile of both cash and chips in front of him ... hundreds of millions of dollars worth ... and standing right beside him was the State of Idaho. Idaho looked nervous with visible tics that seemed to me to be a bit more than aftershocks from recent seismic activity in neighboring Nevada. I couldn't quite figure out why so I watched for a while.
Now I have to tell you, Steve Appleton is not a very good poker player. He plays and bets erratically, putting up huge sums on longshot hands that seem to have little chance of paying off. It became clear to me in time why Idaho was so nervous. The state had some of its money in Appleton's pot and the game was not going well. Hand after hand, Appleton was losing millions and millions of dollars.
And then something odd happened. Appleton took a wad of his dwindling cash reserves and handed it to a player across the table from him who looked suspiciously like California's Gov. Arnold Schwarzenegger!
And that's when I woke up.
Two questions immediately popped into my mind. The first was "What in the world had I been drinking that made me dream of Steve Appleton!!!???" The second was, "What could my dream possibly mean?"*
And then I thought about Micron's curious week. It began with a news conference by Micron President Mark Durcan where he announced the company was forming a strategic partnership with a Taiwanese chipmaker. Somewhat significant since this is something Micron has resisted in the past. And then Durcan threw in a peculiar comment. He said that Micron would build a new fab in Boise 'someday', when economic conditions were right. This is an odd assurance from a company whose most recent financial statement showed losses of nearly 3 million dollars every day.
The next day, no news conference, but an announcement that Micron was going spinoff its image sensoring division. As Ken Dey with the Idaho Statesman pointed out in an interview segment on 'Today's 6 News,' that's probably good news for Micron's fab in Nampa. But there was another interesting tidbit. The new division would not be headquartered in Idaho, but rather in California. (The spin-off has been rumored for a while, with speculation that Appleton would eventually resign his current post and take over the new company. Makes me wonder if he isn't methodically plotting his own escape from Idaho to the Golden State ... but I digress).
After my dream, it occurred to me, "Could it be possible that the timing of these announcements are related? Could the mentioning of a mythical new fab in Boise have been some sort of cover for the headquartering of the new image sensor spinoff in another state?"
I honestly don't know the answer. The truth is I'm not smart enough to avoid tough questions the way Micron does (as explained in one of my blogs over the summer, Micron does not grant interviews with KIVI-TV because of their displeasure with our questions) and I'm not rich enough to be able to afford to lose $3 million a day. But I am savvy enough to know that Micron really can't afford any more big PR hits in Idaho. Dey has recently written about the lack of enthusiasm in the legislature for Micron, which has received some very generous tax breaks in the past. In his blog he wrote, "...Micron appears to have lost its luster with the Legislature. No one in the Legislature from the Governor on down is giving any indication that they want to help Micron through its recent troubles. I’ve actually heard that Micron has asked for help, but legislators have balked."
Dey's blog had Micron execs so concerned, one of their PR people wrote an e-mail to Boise business leaders saying what Dey expressed couldn't be further from the truth, and that legislators are calling Micron all the time offering to do more to help the company. Either way, any sign that the company is now shipping even more jobs out of state could make legislators downright hostile to the high-tech giant.
There was another news item about Micron at the end of the week (you can find it on the news section of our website). A juror in a price-fixing trial against a Hynix executive referred to Micron Executive Michael Sadler a "lying sack of shit" after he testified. Jurors apparently felt Sadler, who has immunity for his role in the computer chip price-fixing scandal, gave less than honest testimony and could not be trusted.
I think that's indicative of the bigger problem reputationally for Micron these days. Admittedly engaging in illegal price-fixing as a business practice, promising expansions in Idaho that never come to fruition while investing billions in plants in other states and countries, clumsily laying off hundreds of Idaho employees, making multi-million dollar payouts for executives while the company posts record losses, telling a business publication "I don't have to hire another person in the United States" and otherwise isolating yourself from most local media outlets because you don't like the questions they ask ... it all adds up to an environment of distrust for Micron.
In the Idaho Legislature, trust is the most precious commodity of all. It is a handshake deal, your word is your bond, I believe you will do what you say kind of place. It's no wonder Micron isn't having much success there right now. That's a tough reality for a company struggling to survive, but Micron's done it to themselves.
*-Full disclosure, this is a literary device. I did not actually dream of Steve Appleton, and trust me, no one is more relieved about that fact than me.
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