TW: Mr. Pistorio has been at the center of European semiconductors
for three decades. He was CEO of SGS
only semiconductor company. In 1978, he
initiated the integration of SGS, and French semiconductor operation, Thomson
Semiconductor, to form STMicroelectronics.
In this 2011 interview, he recounts the history of European semiconductor
manufacturing as they have battled the efforts of the U.S., Japan and
RW: Well, good morning. What
– what brings you to Silicon Valley?
PP: Well, I've
been awarded by the IEEE the Robert Noyce Medal, which is a
medal given every year for career achievements. Very nice and prestigious award, and
therefore, I came to get the award a few days ago.
PP: Thank you.
RW: You've really
won a – a great deal of awards. I've –
looking through your bio.
PP: Well, you
know, ST was a successful company. So
for several reasons, there are recognitions that go to the company, and for the
company, go to their CEO, present or past.
So I think I've been receiving those awards in recognition of the
achievements of my company, which means the recognition of what the people of
ST have done. ST was a people company,
is a people company. But all my time I
believe the team and the spirit of the people was the major asset of the
RW: Well, how –
how – what was your – your youth like – like when you were a – a kid?
PP: Well, when I
was a kid, first of all, I was very fortunate to belong to a very
good family. Good not economically, good
in terms of happiness. My family was
quite modest from an economic point of view.
My father and mother were simply elementary school graduated. They didn't have a formal education. But they were fantastic people. In my family we were two children, me and
my brother, and we received all the kind of attention and love that children
can get, plus the most important thing, the parents can give it to their
children, the education. My parents
allowed us to study, and to reach graduation level. It was not easy for them because it was
really selling everything [laughter] they had and making all kinds of
sacrifice. But with
love. So it's fantastic. I think that you get your basic ethics, your
basic DNA in terms of a culture in the family.
And this was, for me, a great education.
Then I graduated in Turin,
far from where I was born. But I think
my memories of my youth is very good.
RW: Did you have
brothers and sisters?
PP: Just one
brother, who also had the same kind of environment, and the same kind of attention and
education. The rest, we didn't have any
money. My parents didn't give us money,
but gave us the most important thing – love, moral direction, and education. That's all, which are the most important
RW: Sure. Well, that's great. So what did your brother d – what does he do?
PP: He has been a teacher
all his life. And he retired after a total
different career. Now he's retired and
living a normal retired life with his family.
While – as far as I'm concerned, it's a little bit fun how my career
started because I graduated at the Politecnico of Turin [clears throat] in 1963. And I was not a great student. I was a good student until the high
school. But then in Turin, I lost a few
years because I think I was not well-inserted in the new contest. At the time in Turin I was a kind of foriegner – I'm a Sicilian.
Sicily in the south of Italy, Turin is
in the north of Italy. At that time there was a big gap. Television has not yet unified the country. Even the dialect that we were speaking was
different. Italian for me was kind of
foreign language. Sicilian [laughter] was
the real language. So it was a little
bit difficult to get engrained. I lost
some year, and I graduated in 1963. But
I think I was very keen in scientific matters.
Mathematics was my biggest passion – physics. And then all the technical engineering
matters. So my idea was that I would go
and make a designer. And I had several job offers, including
from Olivetti, which was the glamour
high tech Company of Italy
at the time. And when I was already set to accept the job, one guy that knew
me, tells me : ah, but you are not the kind of guy getting
into close environment and do a designer.
You are an extroverted person.
You are a salesman. So why don't
you come – I'm a distributor for Motorola in Italy. Why don't you come and do a salesman for me
of Motorola product? I say; come
on. I've done engineering. I've graduated. I'm good – no, I want to be a technical
guy. He says, how much offers you
Olivetti? I say – I said one hundred and
twenty-thousand lira at the time, which today would sound ridiculous. It would be like sixty Euros, of course, per
month. And he says, I offer you one
hundred and fifty thousand lira. So he convinced
me. [Laughter] That's they way I started my career just
after graduated, being a salesman. So I
never practiced technical engineering.
Not because of choice, but – but, yes, because of a choice, but it
was too much compelling, the offer. I
was already a little bit aged. I want to
get married. I had been engaged with my
wife already since eight years, so – since several years, not eight. So I accepted. I started my career as a salesman of the distributor ofMotorola in Italy, which I think was good,
because, in fact, I've enjoyed all – all the life of my career. My background for education is
technical. My formation in the
profession is marketing starting as a salesman with the distributor of
Motorola. Then Motorola opened their
subsidiary in Italy
in 1966, and they hired me. At the first in Motorola
there were four people. There was a guy
coming from the states, Dedy Saban, a good friend of
mine. And now he's dead, the poor
guy. He was Regional Director. Then another person was me. I was sales manager. There was nothing else. [Laughter]
But the title was great.
PP: And two girls,
two secretaries. That’s were all the
office. So in 1966, Motorola opened the
office and I became the Sales Manager of Italy.
Wow! But I was managing just
me. And – and then the company grew
rapidly. And in 1969 – 1968 – 1968 –
year '68, yes. I'm not sure – '68 or '69,
I was appointed the Regional Director of Italy. It was a time when there was Les Hogan the
CEO and half of the management team of Motorola left Motorola to go to
Fairchild. Dedy Saban
also. So I had just before became the Regional Manager of Italy. And I must say that at the time, I was
offered to follow all the crew to go to Fairchild. I refused.
By the way, it's interesting for the reaction. I was promoted as Regional Manager of Italy
before the defection of the Motorola people.
And I was in Phoenix
(in the Friday when everybody left) just to take the new power and to get
directions in my new management
position. So Dedy Saban was
my ex-boss and had already been promoted, but anyway, left. Told me that if I would
join, he would double my salary.
And my salary had been just substantially increased the month before for
my promotion. It was a tempting
story. Dedy said not only that: but you will get stock options. I didn't know what this means, stock option. Was the first time I heard of stock
options. So it was quite tempting. I turned down. Said, no, I've just been promoted. This is what has been my objective. I will remain with Motorola. And the only guy, at the top management level
-( or nearly the only guy – few guys had remained. Wilf Corrigan had left. Many people had left) - was Tom Connors. And Tom Connors was the Head of Marketing
Worldwide. In occasion,
he was promoted as the new CEO of
the Semiconductor sector of Motorola. Tom appreciated very much that I did not leave and I
think Tom is a great guy. He still lives
in Phoenix, and
we remained always good friends. So I
remained in Motorola. And then after
that, in 1970, I became the Marketing Manager of Europe for Motorola. And then in 1974, there was the big strong
semiconductor negative cycle that started in the autumn of '74, and '75 was a
disaster. A lot of Motorola executive in
the top level were fired. And my boss in Europe was
Bob Heikes. He
was the General Manager of Europe. I was the Marketing Manager. Europe was
doing very well in spite of the crisis.
So Bob was promoted to Assistant General Manager and came to Phoenix, and I was promoted General Manager
of Europe. And this was 1975, early '75. It was fun.
It was interesting. And then
in'77, Motorola promoted me, brought me to the United
States as Vice President of World Marketing.
It was – was the first time I was named Vice President. Motorola changed the organization on a
vertical way, a World Director of Marketing, a World Director of this and that,
but was not really functioning very much.
So in 1978, they went back to regional organization and reestablished
the job of a General Manager of International, and they promoted me to General
Manager of International. So in 1978, my
last job in Motorola was Vice President, International Semiconductor
Division. And then in 1980 comes the –
the crazy move to SGS. SGS was an
Italian company. It was the only
remaining company – no, there was another company, but had been merged. Anyway, it was an Italian company in
semiconductor. Bankruptcy in the sense
that it was state-owned, and they were losing money
since ten years. Year
after year losing money. And the
way they were surviving is that at the end of every year the government would
pay a check exactly equal to the penny to the loss. [Laughter]
Not investing in the company, but cleaning the loss. And the company would just start again. At the end of the year, they
would go to the shareholder. Say, I lost ten million. Okay.
Here's a check for ten million, start again. So they wanted to find this time somebody that
had clear world experience. And I
remember the group, the Stet-IRI
Group, which was government controlled
and was owning SGS, appointed Boyden International to go and look for
somebody. And they gave mandate to Boyden
International, which is a search firm: “ We want an Italian that lives in the United States
and is a vice president in a big American semiconductor company”. And guess what? It was not difficult to find one. [Laughter]
I think there were only two at the time.
One was Federico Fagin, who was the head of the Exxon owned Zilog So no interest at all. And the other one was me. So they identified me and offered me the job
of becoming the CEO of SGS. And frankly
I thought that they were crazy. I say,
come on. SGS is a dead company, no hope,
no way. And so I was very reluctant to
start. And I remember my father telling
me, stay where you are, Italy's
a mess. At the time in Italy there were
the Red Brigades, and big economical and political
problems. My father was already aging, but was always giving
me a little bit of advice. And he says,
no, don't be silly. Stay
in the States. And don't think
about us ( which was a component, both for me and my
wife). Our parents were aging. Going back to Italy would have been nice. But finally I decided to take the challenge. The idea of running a corporation was very
strong [laughter] motivation. The idea
of going back and turning around a basically broken semiconductor company, the
only Italian company, was too much a tentation.. Another problem was that SGS was a state-owned
company, and the salaries were according to the book of state companies. So the salary they offered me was forty
percent of what I was making at Motorola.
And there was no bonus, no stock options, nothing. So my wife was saying that I was crazy. Say, come on, Pasquale, are you crazy? What do you want to do? Why you want to do that? And I remember that fun conversation I had
with John Welty, who was the CEO of the semiconductor group in Motorola, just
the day before I left. John was smoking
his pipe. We had breakfast in his room
in his house. - So Pasquale, you want to go to back to run SGS, huh? - I say,
yes, John, I'm leaving Motorola. I'm
joining SGS. I love Motorola, but this
challenge is too big for me to refuse.- And he says, as he smokes his pipe: ah, I
see. Is Italy a nice, quiet place right
now? - Oh, no, John, there are the Red Brigades, political shamble, very bad-. I see, I see.
Does SGS make a lot of money? Is a
good company? -No, John, it's
technically broken since ten years.- Oh, I see.
I see. Is SGS paying you
more? No, John, it's paying less than
half of Motorola.-
Pasquale, are you crazy?- Yes,
John, I'm crazy. [Laughter] So I did accept anyway, and was a big fun, because
I went back and the company was really in a very difficult situation
economically, and I turned around the company.
And by the way, I want to say that all the European semiconductor
companies were in deep trouble. So was
Siemens Semiconductor, Philips Semiconductor, Thomson Semiconductor, and SGS,
the Big Four. Some specialist supplier was
making much better. But the Big Four semiconductor suppliers
were all losing money, and every company in their boardroom was thinking “how do we get rid of
this thing? Now semiconductor is an
American and Japanese affair, it's not a European affair”. But we, after I joined SGS, didn't think
it like that. We
said no, we can make it. I
think we can make. And in fact, we did
make. Was a lot of fun. My biggest challenge were my shareholders. Not the customers, not the competitors, not
my people. This was easy to manage. The major trouble were my shareholders. They want me to turn around the company, but without any trouble.
“You don't fire people. You don’t
get in fight with the unions. So
wait. We are happy if you turn the
company around in ten years”. I said, come on, guys. [Laughter] I am here only to turn around the
company. You hired me for that. So I had some challenges with the
shareholders, because for politician reasons they didn't want to have trouble
with the unions. But we had – we did
what we had to do. I started big
restructuring program. And by the way, I
had to fire people for bad performance, absentees. If you can believe that, the absenteeism in SGS
when I joined was twenty-two percent.
Every day nearly one people out of four was not present– no, more than
one people out of four was not at job.
And thiswas accepted by the management. So I told my human relation manager… But to be precise, I started first with the topper
class. They call the Dirigenti,
the higher-level management. We had some
The first month, July 1980, I fired twenty out of eighty. The first month. Not necessarily because they would be non
performers–but also because many of them were unnecessary. There was no need of them. I mean here's a broken company, and they had the two general managers. A broken company and a CEO and two general managers. A manager that was in charge
of Special Affairs. And I asking:what are you doing, as a Dirigente for
Special Affairs?. Well, I had a two-hour
interview with each of those guys to understand the company. In two hours, I couldn't understand in this
particular case what was his job. The only thing I understood he was organizing the football
games, the Christmas gifts…. So you have
a – a big guy, top level, well-paid to organize football games? Come on.
So in the first month – so twenty out of eighty Dirigenti,
just I asked them nicely to leave .. And even at that time, firing the Dirigenti
was possible. Firing workers was nearly
impossible. The Dirigente
you fire paying basically what the law says, which is one year salary; and plus
six months to compromise. So the tag was
eighteen months. Okay, you pay eighteen
months, but first you send a strong message all over the company that the
party's over. If you are needed, you are
there. If you're not needed
, you're out. The second month, August,
I attacked the absenteeism.. The – this twenty-two percent of absenteism. Well,
how can a company survive? So I asked my
human resources manager, which was a Carlo Chilento, do we have cases in which somebody's more
than fifty percent of the working time absent for three
years in a row? He found seventeen
people with that spec. [Laughter] I told him, fire them. And he's smiling nicely and politely, he
says:” Mr. Pistorio, you are American, you don't understand Italy. This is Italy. We are a state-controlled company. You cannot fire people”. And smiling very nicely, I told him, “Mr.
Chilento, I'm not asking you if we can fire.
I'm asking you to fire them”.
Now, the months before I had fired the twenty Dirigenti,
he understood that I was not joking. So
he did fire those absenteists – he find
a way to fire them. The unions reaction was big strikes and the occupation of the plants. Terrible. My shareholders called me back in Rome
saying, “hey, you cannot do this in Italy. This is a move we cannot stand. Go back and tell them :I
apologize, I was wrong, my human resources misled me, go back”. I said, come on, guys. You are the shareholder, you can fire me, but
that's what I have tol do, and I will stick to that,
which I did. And later we had episodes
like this several times in which I had to put my job on the
line for matters of principle. Not that
they didn't agree. They knew it was
right, but they could not stand the social trouble as corporations controlled
by the government. But we did.
We did, and the absenteism collapsed in few
months from twenty-two to five percent.
The dirigenti, that were arriving at
nine-thirty in the morning and going to lunch home, and coming back and staying
late in the evening, I told them everybody must be in the office no later than
eight-thirty, no lunch at home. You go
back in the evening, when
you finish the job.- You change the culture.
We did many of those things. Changing the culture.
We started with
the night shift, which was not yet practiced in Italy for female labor, except in
hospitals Particularly for ladies, was
nearly impossible. So we did several
things. But the most important thing we
did was technological and product innovation.
We were fortunate because Italy has a very,
very good engineering schools.
The universities are good, the engineers are good, and they are much
cheaper than U.S. They are equally
prepared, equal competent, but much cheaper.
So we focused on pushing innovation strongly. In the years of restructuring, while I was
firing people, closing plants, doing all necessary cost cutting, I pushed our R&D
to twenty-two percent of sales. That's
the only thing I was pushing very strongly.
SGS had some niche technology which is “intelligent
power” where they were already very good.
So we exploited what we had good to rationalize the product
portfolio, clean a lot of
mess. In 1983, we were profitable, and
we were the first and the only European company to be profitable. And we changed the –
the mindset of Europe in our industry:
because the Siemens and the
Philips, the Thomson would say: “boy, if they've done, why we shouldn't do?” So started the renaissance
of Europe in the semiconductor industry. When I went there, only one company, Philips
Semiconductor, was in the top ten world semiconductor ranking. Ten years later,
three European semiconductor companies were in the top ten in the world, and ST
was the first European. But that's
another story, will come. So we were in essence the
originators of the European semiconductor industry, because people understood
that you can do. And the way is very
simple. You put the American-style
discipline, and push R&D. That is simple.
I mean you have to have the – the determination to do it. So we become a – a reasonably profitable
company, but not well profitable, because the shareholders in the past were
paying only the loss to maintain the company alive but not investing in it. Once we became profitable, they says, “okay, you are in your own.
Forget it”. So if I want to
finance my growth, if I want to invest, I have to borrow. The company was heavily in debt, but
profitable. I understood, however, that
we didn't have the size to compete worldwide.
SGS was a small company. When I
joined the company in 1980, we were one hundred million dollar in sales. One hundred million. Motorola Semiconductors was at the tune of
one billion the same year. Impossible to compete in that way. Our presence in the states was very marginal. Our sales in the states were eight
million. So since day one, I told my
people in SGS in 1980, “ we have tthree
major goals:1. we have to achieve very rapidly, which
is, number one, we must become profitable, because otherwise we are a parasitic
two, we must break into the United
Only if we sell in the United
States, we know our products are good. Otherwise, no. 3.
And number three, we must become member of the Billion
Dollar Club. Otherwise, we don’t count.” And when I said those thing
in July 1980, my colleagues were thinking I was crazy. In fact, I think they were three category of people in my
management team: The first category was
reacting thinking; he's fantastic. I'll
do everything in
the work for him. I give my life for
him. - Another saying
he's crazy, but I will give a try and work desperately.- Another saying, ah, he's a jerk, says crap, we'll wait
that he's out. -Well, I fired those, and
[laughter] pushed the other, and created the right environment. But we were still small. In 1986, we were about four hundred
million. So big
growth. From 1980 to'86, we had
moved from one hundred to four hundred million.
But still very small. I think worldwide we were twenty-four. Cannot compete. So I said we have to do something. We had created, as I said before- in 1983 I
believe, -the JESSI Consortium. The JESSI
Consortium was an R&D alliance
between Thomson Semiconductor, Philips Semiconductor, SGS, and Siemens
Semiconductor, the four major companies,-sponsored by the european
research initiative, the Eureka Programme. JESSI,
which means Joint European Semiconductor Initiative, to develop at
pre-competitive level advanced technology. It was the first time of dedicated R&D cooperative effort in
the semiconductor field. So we'd involved
the four companies. In this contest, in 1986
I started talking with Jacques Noels who
was the head of Thomson Semiconductors.
He was coming from TI and had been hired to turn around Thomson Semiconductor. And we said that we – you're too small, I'm
too small, you are too small ( we were about the same
size) why don't we try to merge? So we
developed a plan from bottom up to merge the two companies. We had good complementarities, some overlap,
so we felt we could do a good job. We presented this to our
shareholders respectively. They got
together, they agreed. So this is the
way ST was born. In 1986 started our
meetings, dialogues, whatever you want.
But in 1987, the new company was formed.
SGS and Thomson Semiconductor got together, and in July 1st,
1987, ST was formed. The first name was
SGS-Thomson, and eventually became STMicroelectronics. Now is the – the most, how shall I say,
exciting part of my career. Here comes
ST Microelectronics. And when the
company was born, the photo
of the company in 1987 is the following.
Our sales were eight hundred million dollar, four hundred each, eight
hundred million. Our loss
were two hundred million dollar.
All from Thomson origin plus, because we were slight unprofitable. Our debt was three hundred and fifty million
dollar, all of SGS
origin because Thomson was a division of a bigger corporation,
and they had no debt. And we were number
fourteen in the world semiconductor industry.
So this is the photo. Eight hundred in sales, two hundred in loss,
three hundred and fifty in debt, number fourteen. And I remember that the two shareholders, the
Italian, the French shareholder both eventually government controlled, hired two American banks, one each, to see what is
worth this thing we put together. The
bank came, started and reviewed, visited, and come up with a conclusion. The conclusion was very simple: “They cannot survive. If you want to get rid of them, you have to
pay a big money. So the worth is between
minus one and minus two billion dollar”.
That is what
they concluded. So I was
real upset of this judgment because I knew that the company, had more talent,
patrimony to be so negative. But in any
case, there were external studies everybody concluding: ”
They( ST ) cannot survive. They are
dead. You put together two companies
that are very weak. You make a very weak
shareholders, fifty-fifty, two shareholders that are government, two unions of
two different countries, impossible.
They will die.” The only people
that didn't know that we should die was us. And since we didn't know, we didn't die. [Laughter]
You know, the story with the albatross. It's too heavy to fly. It cannot scientifically fly. But he doesn't know and he keeps flying. So we were supposed to die. We – we didn't know, we didn't die. The company became profitable very
quickly. We did the
rationalization. Frankly, it was
fantastic work. Born in July 1st,
1987, in November of the same year, you cannot recognize
anymore what was SGS and what was Thomson.
I reorganized the company, putting together assigned jobs, to French or
Italian, doesn't matter. [clearing throat] But that is ST. No more Thomson or SGS – ST. [clears throat] We
made the product
rationalization very heavy, cutting all the families that were not necessary. Same story I did in SGS I did in ST, focusing
on what count, pushing R&D, closing factories. And we closed three plants in France, one plant in
Singapore, and one plant in Malaysia. So
was heavy: but we did. And again, we designed the strategic
guidelines of the company that never abandoned us. Three major strategic
guidelines. One was innovation
driven by the market through strategic alliances with customers. It was big intuition that other companies followed Make the
strategic alliance with the customer.
They know the system better than you, and they drive your
technology. They are not only good
customer, but also your partner. The
second strategy was globalization by integrated presence in each major macroeconomic
system. So we want to have design,
manufacturing and marketing in the Americas,
in Europe, and in Asia. We did.
So we had to be close to the customer, because we are doing not commodity like DRAM,
but dedicated products. For that, we
felt we needed to be close to the customers.
And number three, productivity driven by TQM – total
quality management. And it worked. Okay.
It's very easy. Frankly, it's
simple: putting the choices together and making things happen. I've always believed that the role of the leader are five things, either in business, in a
corporation, in government. For me, a
leader must have five major duties. One,
create a vision. Two, build up the
team. Three, install the culture. Four, design the roadmap. Five, drive the execution. Very simple. If you do, the job is done. If you don't do, too bad. And you cannot miss any of those. Every leader characteristically can be better
qualified for one of the five tasks, but you cannot ignore any. So the company must have a vision, which must be very
striking, and people must believe it's possible. Our first vision was Vision 2000. And what type of goal was? To be one of the top ten
supplier. We were fourteen at the
moment we were born. To become one of
top ten, to have a financial performance better than the average of the top
ten, and to be the “best in class” in environmental responsibility. This was our first vision. And all of our people, all
the employees deployed down, and everybody saying that's what we want to be, we
believe we can be. And by the
way, we were there much earlier than 2000, because '96, we were already in the
top ten, profitability better than the average of the top ten, and so on. So you do the vision. And then the team. The team. You know, to pick people, and motivate people,
etc. Anyway, was good result. The company became profitable. The company was growing very rapidly. And then in 1994, the next step, going
public. Again, the shareholders were
reluctant. . When I told them we are
ready to go public, they say, “come on, you're crazy. I know your ego. You believe in this company, but you're
crazy. Come on. No way”. I said, yes, guys. We can go public. Eventually convinced them
to go public. And in December
1994, we went public. The company was
quoted first at the New York Stock Exchange.
And then the French said, oh, no, we must be quoted also in Paris. And then we were quoted one year later in Paris. And then the Italians, hey, come on, we must
be quoted also in Milan. [Laughter] So one year later, we were quoted also in
Milan. Big mess for
the poor CFO. We are quoted in
three still, in three stock market, New
York, Paris and Milan.
And we are registered in Holland. And we are headquartered in Switzerland. Not easy.
But fine. You comply with the environment
that historically makes you in that condition.
Once we got quoted, the company changed.
Again, changed pace. Now the judge is the market. Now you have a possibility of financing your
growth going to the market. So the period
from 1994 to the year 2004 when I retired was fantastic. We grew nineteen percent compounded a
year. And our ROE was nineteen and a
half percent averaging on all this period.
So the company became one of the top five. For one quarter, we were also number three because
there was a drop in the memory prices and Samsung went down. [Laughter]
But our position really systematically was to be number five – number
four- number five, one being Intel, two, Samsung, three, TI, and four and five
us and Toshiba and we were trading those two places.
So I think was a – a very, very exciting story. But the things that are relevant,
are important, the way we did. Focusing on those strategies, focusing on quality. And I believe that if I were to say now what were the main ingredient – ingredients of our success, I
would say three major elements. The
first element is the fact that the company was systematically committed to
innovation. Our R&D spending was
always higher than the industry average.
Our SG&A spending was always below industry average. The two combined were good compared to
industry average. But our focus in R&D
was not only putting money, but
putting money and working in partnership with customers. So innovation was the number one reason. The number two reason was the spirit we
created in the company, the commitment to people, the empowerment of people, the motivation of people.
It's unbelievable what you can do when you create a spirit
where everybody believes he's an
actor, not a factor, not a pawn. He's
there with his brain. And this was the
spirit of ST. You are there to conquer
the world. And by the way, in my mind,
the next step was to be number three.
And I had a secret dream to be number one. But of course, I retired before
contemplating this ambition. But you
must have the ambition. Why not? Okay.
So this was the second reason.
And the third reason was our culture.
What is the culture of ST? For
me, the culture of ST can be identified in three major concepts: Integrity ( People
integrity, business integrity, corporate integrity). The second thing was environmental
responsibility, environmental neutrality.
We were a world champion in the environmental field. And the third is – excuse me. The second was social responsibility,
including environmental responsibility.
And the third was the commitment to excellence via TQM. Driving for excellence. Everybody. So number one is the innovation, number two,
the people, and number three is this commitment to social responsibility and to
quality, etc. I think it was very
interesting. And by the way, we received
recognitions. Two of which I am very
proud is the European Quality Award in 1997.
We were the first European company to receive the European Quality
Award. And the Malcolm Baldrige Award in
1999. And again, we were the first European
company to ever receiver a Malcolm Baldrige Award, indicating we were on the
right way. That's nice. At the time I retired, end of 2004, the
company was at nine billion dollars in sales. Quite profitable. Money in the bank. In the top five in the
world. So I think we did a
satisfactory pattern and the company was pretty, I would say, remarkable
considering the point from where we started.. That's my little hystory
PP: I've been
talking to much maybe. [Laughter]
RW: It seemed to
me that you've used a lot of American concepts.
PP: Absolutely. My school was Motorola. Great corporation. Bob Galvin, the head of the corporation, was
a great leader. He was the “ god” in Motorola
because he was the chairman of the total corporation. I was member of the semiconductor
sector. But Galvin was a great leader with a strong integrity principles. Motorola was a strong integrity principle,
and a very strong and good management school.
I think everything I learned about management is from Motorola. And the American way of doing business in the
semiconductor industry was unknown in Europe at the time I went in Europe. And I
tried to put all those concepts at work . My old boss in Motorola in the late 1960’s,
Jim Finke – I don't know where is he now – used to say that Europe compared to
– to U.S. in the semiconductor industry was only few years late in technology,
was several years late in manufacturing, and was decades late in marketing,
[Laughter] and in management in general, which was true at the time. So I brought in some of those principles,
some of those things that I'd learned.
And by the way, if you want to make a turnaround, if you want to change
the culture, you cannot go alone. So I
brought with me some people. Some of my
colleagues in Motorola which were very close to me professionally – we had
grown together – came with me in ST. – in SGS, I
mean, my first – first exp. Not too many.
Daniel Queyssac, and Dick Pieranunzi
in the States, and in
Italy, Piero Martinotti
and Salvatore Castorina
and Voichy von Somogy in
Germany. That's all. That's all. But that's enough to change the culture. You bring the people – then I hired a new CFO , Maurizio Ghirga from Exxon Italy. He was the CFO of Exxon Italy. Again, American trained CFO. That's it.
You have those key people, you change everything. They bring the culture. Everybody the same culture. My colleagues in Motorola, we know each other
and work together. All
the same school. The – the CFO
from Exxon, he knows the principles, accounting principles, the U.S. Gaap
or whatever you want. But
the – the – the American style.
And then you change the culture.
Yes, that's what was a major part of my formation in
RW: When I look at
the Italian government, it seems to me they could use a makeover, too.
boy. I prefer not to comment. I think we are very, very sick in government
today in Italy. Real sick. Ah, lot of – lot of problem. I don't think there is the right culture or
ethics. And I hope that we overcome this
period which is a very bad period in our history, democratic history. Our economy is in difficulty, and our credibility is low. So – but there is no need of copying any
country. I mean Italy has a lot
of good tradition in itself. I mean what
happened after the Second World War? You
know, we had very strong leadership, leaders that recognized what was right, that put us in the Western world, kept
out of other social concepts. Italy
became – you may not remember this thing, but in the '50s and early '60s, Italy
was growing faster than any country in the world. And this was called the Italian Economic
Miracle. Our productivity was fantastic. Our GDP was growing like the Japanese.
So we had our economic miracle: we were transforming ouselves
after the Second World War in less than twenty years from an agricultural
country in one of the top seven world industrialized countries. In fact, the top five. So the country could do it . And then there has
been several reasons, and today we are in not good shape. I hope it will be resolved soon. And we'll see. But there is no need to learn from America or any
other country. We have our own
tradition. We can learn from our self in
the past. And I must say that America has
also some problem. By the way, I think
Obama is doing a great job, but it's difficult to overcome the terrible situation he
took. We'll see. In the long run, I have good confidence on Italy. In the short run, I'm pessimistic. I mean the next five years will be very
difficult for Italy. With the debt burden we have, with the structural reforms
that have not been done. We need some
really tough pain to overcome this period.
But in the long run, Italy's
a fantastic country. You know that in
terms of cultural goods, we are the richest in the world. We are the number one classified by the
United Nations in terms of cultural patrimony.
And Italy has a tremendous diversity of culture, paysage,
history, excellent universities, good students, cheap engineering. Kind of a lot of thing. Tourism. Tourism, we could do much more. In 1970, we were the number one in the
world. Now we are number five. Why? Poor management at the country level. Infrastructures are no good, The culture of service that has deteriorated because poor unions, education, whatever. But we will come back. I'm sure we'll come back because the
potential is there. We need to have some
a lot of pains in the medium – short
RW: Well, thank
PP: Thank you