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Intel is just like Boeing: A company with legendary engineering roots taken over by myopic financial engineers who can’t think further than next quarters stock

Intel is just like Boeing: A company with legendary engineering roots taken over by myopic financial engineers who can’t think further than next quarters stock price, which is their only measure, their only target, and to which all their bonuses are attached.

danielmarkbruce 3y ago
Good analogy.
kaliqt 3y ago
Funnily enough, this is EXACTLY what has happened to the video game and movie/series industry. They jump onto the latest trend, e.g. ESG to get in good with the banks and funds without thinking about what long term damage it is doing to their brands and products.
- matheusmoreira 3y ago
  To be fair, they jump on that particular trend because the banks will punish them if they don't. They have tens of trillions in assets under their management and they make sure that capital won't flow to companies that refuse their agenda. In effect the banks dictate the direction society moves towards. And people say it's a conspiracy theory. > ESG investment funds in the United States saw capital inflows of $3.1 billion in 2022 while non-ESG investment funds saw capital outflows of $370 billion during the stock market decline that year
  - rpmisms 3y ago
    It's not a conspiracy theory if it's on their website...
  - hdtyyf 3y ago
    This is utterly incorrect. The amount of funds with an environmental or social mandate is trivial; and nearly all of those mandates require essentially nothing. It is sad how easy it is to dupe mediocre men into believing thinking they are victims, when in fact they are simply whiny little snowflake losers.
    - matheusmoreira 3y ago
      Hundreds of billions of dollars are "essentially nothing" to you? I don't know what to say.
rpmisms 3y ago
While it's sad now, I'm looking forward to long-term thinking being emphasized in business school again.
- rectang 3y ago
  Why would people pay attention even if long-term thinking is taught? Only chumps think about the long-term interest of the company. Your long-term interest as an individual is in extracting as much money from short-term bonuses as possible, because once that money is in your bank account it doesn't matter if the company craters.
  - rpmisms 3y ago
    Well, the idea of giving value to society has been evaporating of late, but it should still be taught as the ideal.
- runeblaze 3y ago
  I am still trying to maximize my promo chances and that has been very hard. Long term thinking -- that's like rocket science
markus_zhang 3y ago
They all look like that, aren't they? It's like cancer, late stage. It's everywhere. I'm trying to be optimistic here, but I don't see much light at the end of the tunnel. Best case a second depression wipes away everyone's wealth and we start from clean slate.
- chrisco255 3y ago
  I mean, clearly the competitors eating Intel's lunch do not look like that. Nvidia does not look like it. Apple doesn't. AMD doesn't. Just seems like ordinary competitive churn in the marketplace to me.
  - markus_zhang 3y ago
    That's a pretty good point.
borissk 3y ago
And furthermore they lost most of their best engineers and scientists during the years that the company was run by the useless MBAs. Now each new technology process is a huge struggle. Intel has secured some of the first new gen EUV machines from ASML, but if they'll have the talent to quickly start using them on scale is not yet clear.
- selimthegrim 3y ago
  Somebody from Intel who had a PhD from my school and manages a bunch of process engineers was on sabbatical and teaching a class at his old department, some of whose undergrads I taught. I visited an info session he was presenting and pointed out that I had been a green badge in JF5 for Validation and that they had a reputation of not matching ASML and Nvidia offers. He went ballistic on me and told me to go work for them if I got an offer from them and that he wouldn’t want me on his team with that attitude. While I am sure all the other people in the room who were F1s and undergrads still wanted jobs and he answered their questions honestly as far as I could tell (saying Intel would be bankrupt without CHIPS act money etc) that can’t have been a good look for him. I did leave the room only after telling him I wanted his company to succeed.
  - borissk 3y ago
    You're right - this is another problem for Intel. They have a reputation for underpaying engineers, so the best and the brightest go elsewhere.
kortilla 3y ago
This is oversimplified and actually underplays how serious the issue is. These companies didn’t fail because of myopic financial engineers. The ones focused on quarter to quarter tend to bomb the company relatively quickly and do get flushed out. These companies failed because of long term financial visionaries. These are the worst because they are thinking about how the company can capture markets at all costs, diversify into all adjacent markets, etc. They are a hard cancer to purge because on the surface they don’t sacrifice stuff for the current quarter. They sacrifice laser focus for broad but shallow approaches to all kinds of things. “Sure, we’ll build a fab here. And we’ll also do enterprise NICs… And also storage… and also virtualization… and also AI… and also acquire some startups in these fields that might have something interesting…” The company becomes big listless monster coasting on way too many bets spread out all over the place. There is no core engineering mission or clear boundary between what is the business and what isn’t. Intel is far from “myopic”. If it was something as obvious as a next quarter driven CEO, the board would have made a change immediately.
- mmaunder 3y ago
  > These companies failed because of long term financial visionaries. These are the worst because they are thinking about how the company can capture markets at all costs, diversify into all adjacent markets, etc. Long term financial visionaries? No they’re simply plundering the business to reward shareholders and executives through buybacks and dividends. They rationalize this as “maximizing shareholder value” but it is destroying long term value, growth and innovation.
  - kortilla 3y ago
    Don’t be naive. You missed the entire point of what I highlighted and looking for “dividends and buybacks” as your signal will lead you nowhere. CEOs not focused on product vision who focus on “company growth” as a vague vision are what lead to Intel, GE, etc. There is no greedy raiding of the coffers like your caricature implies in this scenarios.
    - mmaunder 3y ago

danielmarkbruce 3y ago

Good analogy.

kaliqt 3y ago

Funnily enough, this is EXACTLY what has happened to the video game and movie/series industry. They jump onto the latest trend, e.g. ESG to get in good with the banks and funds without thinking about what long term damage it is doing to their brands and products.

matheusmoreira 3y ago
To be fair, they jump on that particular trend because the banks will punish them if they don't. They have tens of trillions in assets under their management and they make sure that capital won't flow to companies that refuse their agenda. In effect the banks dictate the direction society moves towards. And people say it's a conspiracy theory. > ESG investment funds in the United States saw capital inflows of $3.1 billion in 2022 while non-ESG investment funds saw capital outflows of $370 billion during the stock market decline that year
- rpmisms 3y ago
  It's not a conspiracy theory if it's on their website...
- hdtyyf 3y ago
  This is utterly incorrect. The amount of funds with an environmental or social mandate is trivial; and nearly all of those mandates require essentially nothing. It is sad how easy it is to dupe mediocre men into believing thinking they are victims, when in fact they are simply whiny little snowflake losers.
  - matheusmoreira 3y ago
    Hundreds of billions of dollars are "essentially nothing" to you? I don't know what to say.

rpmisms 3y ago

While it's sad now, I'm looking forward to long-term thinking being emphasized in business school again.

rectang 3y ago
Why would people pay attention even if long-term thinking is taught? Only chumps think about the long-term interest of the company. Your long-term interest as an individual is in extracting as much money from short-term bonuses as possible, because once that money is in your bank account it doesn't matter if the company craters.
- rpmisms 3y ago
  Well, the idea of giving value to society has been evaporating of late, but it should still be taught as the ideal.
runeblaze 3y ago
I am still trying to maximize my promo chances and that has been very hard. Long term thinking -- that's like rocket science

markus_zhang 3y ago

They all look like that, aren't they? It's like cancer, late stage. It's everywhere. I'm trying to be optimistic here, but I don't see much light at the end of the tunnel. Best case a second depression wipes away everyone's wealth and we start from clean slate.

chrisco255 3y ago
I mean, clearly the competitors eating Intel's lunch do not look like that. Nvidia does not look like it. Apple doesn't. AMD doesn't. Just seems like ordinary competitive churn in the marketplace to me.
- markus_zhang 3y ago
  That's a pretty good point.

borissk 3y ago

And furthermore they lost most of their best engineers and scientists during the years that the company was run by the useless MBAs. Now each new technology process is a huge struggle. Intel has secured some of the first new gen EUV machines from ASML, but if they'll have the talent to quickly start using them on scale is not yet clear.

selimthegrim 3y ago
Somebody from Intel who had a PhD from my school and manages a bunch of process engineers was on sabbatical and teaching a class at his old department, some of whose undergrads I taught. I visited an info session he was presenting and pointed out that I had been a green badge in JF5 for Validation and that they had a reputation of not matching ASML and Nvidia offers. He went ballistic on me and told me to go work for them if I got an offer from them and that he wouldn’t want me on his team with that attitude. While I am sure all the other people in the room who were F1s and undergrads still wanted jobs and he answered their questions honestly as far as I could tell (saying Intel would be bankrupt without CHIPS act money etc) that can’t have been a good look for him. I did leave the room only after telling him I wanted his company to succeed.
- borissk 3y ago
  You're right - this is another problem for Intel. They have a reputation for underpaying engineers, so the best and the brightest go elsewhere.

kortilla 3y ago

This is oversimplified and actually underplays how serious the issue is. These companies didn’t fail because of myopic financial engineers. The ones focused on quarter to quarter tend to bomb the company relatively quickly and do get flushed out. These companies failed because of long term financial visionaries. These are the worst because they are thinking about how the company can capture markets at all costs, diversify into all adjacent markets, etc. They are a hard cancer to purge because on the surface they don’t sacrifice stuff for the current quarter. They sacrifice laser focus for broad but shallow approaches to all kinds of things. “Sure, we’ll build a fab here. And we’ll also do enterprise NICs… And also storage… and also virtualization… and also AI… and also acquire some startups in these fields that might have something interesting…” The company becomes big listless monster coasting on way too many bets spread out all over the place. There is no core engineering mission or clear boundary between what is the business and what isn’t. Intel is far from “myopic”. If it was something as obvious as a next quarter driven CEO, the board would have made a change immediately.

mmaunder 3y ago
> These companies failed because of long term financial visionaries. These are the worst because they are thinking about how the company can capture markets at all costs, diversify into all adjacent markets, etc. Long term financial visionaries? No they’re simply plundering the business to reward shareholders and executives through buybacks and dividends. They rationalize this as “maximizing shareholder value” but it is destroying long term value, growth and innovation.
- kortilla 3y ago
  Don’t be naive. You missed the entire point of what I highlighted and looking for “dividends and buybacks” as your signal will lead you nowhere. CEOs not focused on product vision who focus on “company growth” as a vague vision are what lead to Intel, GE, etc. There is no greedy raiding of the coffers like your caricature implies in this scenarios.
  - mmaunder 3y ago