Mike McNamara, CEO – Flextronics – Design, Build, Ship, Service

·         Strategies have to be different – Tensions in the market

·         Lack of funds and slow down in entire world is different from previous slow downs

·         40% of the leadership changes during a recession

·         225k employees, 20k in logistics, 100k in China

·         30 countries, 28m square feet

·         Leader of the Extreme Networks

·         $27.5B in FY08, LTM $35B, 23% growth & 46% growth over the years

·         6 Themes for 2009

o   The credit crunch will change who survives

§  The banks will pick the winners – Pick the rates based on where you are at

o   We will have an accelerated oligopoly – Business is controlled by a few

§  Telecom for example after the last recession – Consolidation happened

§  Don’t pick suppliers that you don’t think will make it

o   B to B credit issues will dominate customer/supplier discussions

§  Flextronics gives 15 to 30 day credit to Microsoft – You don’t do that at Starbucks – It is COD

§  Need to shift to different terms – Plan capital in a different way

o   Getting back to 2008 in 2011

§  Use to have 401k plan, now have a 101k plan

§  We have already outsourced and lower our costs – Now, run less through our factories

o   The cumulative design cycles will reduce

§  R&D will go down, no need to improve some of the products out there (Don’t need 42” TV with a few extra widgets for a while)

o   The management of the supply chain has never been more important

§  The ability to anticipate