Interview with

PASQUALE PISTORIO

2011

TW: Mr. Pistorio has been at the center of European semiconductors for three decades. He was CEO of SGS Group, Italy's 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 Taiwan.

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.

RW: That's great.

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 company.

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 things.

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 in Italy 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] Only me. But the title was great.

[Laughter]

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 eighty Dirigenti. 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. 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 institution. 2.Number two, we must break into the United States. 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 1^st, 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 company. Two 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 1^st, 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 about STMicro.

RW: Very impressive.

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 Motorola.

RW: When I look at the Italian government, it seems to me they could use a makeover, too.

PP: Oh, 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 adjustments with a lot of pains in the medium – short term.

RW: Well, thank you.

PP: Thank you very much.