WDC to Toshiba: We're sorry about the memory thing (see you in court)

Is Daddy going to live somewhere else?

+Comment Western Digital boss Steve Milligan has apologised to Toshiba's CEO in an August 11 letter.

The companies have been knocking lumps off each other as WDC tried to delay Toshiba's sale of its interest in the pair's flash foundry joint venture.

Toshiba had threatened to deny WDC access to chips from the foundries. It had said it would invest in chip development and production on its own and tried to bar WDC employees from plant premises and databases.

This was part of its response to WDC taking Toshiba to the time-consuming International Arbitration Court to see if WDC actually has, as it had claimed, veto rights on the sale.

Bad blood was mounting, which did not help WDC's efforts to form a consortium to buy Toshiba's interest in the joint venture.

According to Reuters, which has seen the letter, the text included this:

I am not a litigious person by nature. Personally, I have never sued anyone. I understand that the litigation and ongoing disputes have created significant ill will for some within Toshiba. This is regrettable and I am deeply sorry for the feelings this has created.

Milligan said WDC would address Apple's concerns about the deal, seemingly related to NAND pricing if WDC became the global number two in flash production. Apple has just joined a Bain bid consortium.

He said WDC was not seeking management power in Toshiba Memory Corporation (TMC), nor board seats or voting rights:

Western Digital will not have any ability to interfere in the management or operations of TMC, and we have no desire or expectations to the contrary. We are highly confident that Apple will understand this structure and be comforted by it.

Although he asserted how sorry he was, he didn't propose dropping WDC's legal actions at once. Instead Milligan said they could be stopped if Toshiba and WDC agreed a deal.

And he urged speed in their negotiations: "As you know, time is not our friend. The only people benefiting from this prolonged dispute are the competitors to our joint ventures."


Let's paraphrase this: "When we were arguing I put my hands round your neck and squeezed. You were upset about this and I'm sorry about that. Let's agree on how we can stop arguing and then I'll take my hands off your neck before you choke. We haven't much time by the way."

We might imagine Toshiba would not find this an altogether comforting set of sentiments.

Nevertheless WDC and Toshiba did start talking, only for negotiations to collapse yesterday. Time for another letter, Milly? ®

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