It looks like another US company will end up in foreign hands.
French electric equipment maker Schneider Electric SA said Monday it had agreed to buy American Power Conversion Corp., a U.S. manufacturer of backup power equipment, for $6.1 billion in cash.
This is a tough issue, and I'm sure it will get critics even more up in arms.
Not that there's ever an easy answer to anything, this might help explain things.
Schneider said APC’s profitability had “dramatically deteriorated” on a series of bad investments in larger power systems. The Rhode Island-based company’s operating margin — earnings before interest and tax as a share of revenue — fell to 9.4 percent in last year from 15.6 percent in 2003.
Whoops. But, as is too familiar a story, those at the top have their 'bottoms' covered.
APC Chairman Rodger Dowdell and APC Chief Technical Officer Neil Rasmussen, who together own almost 10 percent of APC, have agreed to tender their shares to Schneider, the company said.
So, they cash out, and head someplace else where (hopefully) they won't be rewarded for their "bad investments". I wonder what the average stockholder thinks about that.
With 7,600 employees, APC generated $1.98 billion in sales in 2005. Small power systems, such as uninterruptible power supplies and surge arrests, account for about three-quarters of its business.
But a cloud could be gathering on the horizon for these employees.
Schneider, already outsourcing some of its own production to lower-wage countries, said it was “confident” it could turn APC around, highlighting the U.S. company’s production capacity in Asia, where it currently generates 18 percent of its sales.
So, it looks like the trend continues. Something is going to happen, but let's hope it's the free market, not politicians.
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