Board members were nearly unanimous in urging Schumacher, 45, to resign after heading the Siemens chips spinoff since April 1999.

While the company said Schumacher was resigning for "personal reasons," speculation continued here on Friday about the exact reason. Meanwhile, Infineon's management team has labored to put the best face on Schumacher's sudden and unexpected departure.

Asked for a comment, Infineon's otherwise talkative press office declined. Neither Schumacher nor the new CEO Max Dietrich Kley were available to comment. Even Klaus Luschinetz, labor representative on Infineon's board of directors, was tight-lipped. "I won't comment on that. This is a confidential affair," Luschinetz said.

Sources in the financial community here noted that Infineon's terse statement announcing Schumacher's resignation included the phrase: "The board of directors has made use of it's right to assign the CEO function to it's own chairman, Max Dietrich Kley." Hence, they concluded there was a deep split between Schumacher and the supervisory board.

The influential German engineering union IG Metall had it's own take on the rift. On its Web site the union published the news below a headline reading, "End of a car race." The article went on to say that "The Porsche [Schumacker] has flung out of the racetrack [and] the divergent opinions about leadership between Schumacher and [COO] Andreas von Zitzewitz and [CFO] Peter Fischl are put to an abrupt end."

According to IG Metall, the special meeting of the Infineon supervisory board constituted a final showdown over Infineon's overall strategy. Schumacher's leadership style, criticized by many as autocratic, was a major issue. The union especially blamed the controversy on Schumacher's tough labor policy and the "image-damaging discussion about the dislocation of the company's headquarters" to Asia. "We see Mr. Schumacher's resignation with little regret", the union concluded.

Commenting on Schumacher's department, Harald Biedermann, chairman of the worker's council, said: "We do not know anything about the reasons, they agreed on absolute confidentiality." He added that "the decision provoked a very, very big surprise" among union members.

Schumacher antagonized workers by introducing annual evaluations of every staff member. The lowest 5 percent would be dismissed under the program. Moreover, Schumacher planned to move parts of the company Asia to lower labor costs, a move many labor observers considered ruthless. "This pressure has been removed by Schumacher's" departure, Biedermann said.

Schumacher's resignation came just one week before the fifth anniversary of Infineon's IPO. It surprised the entire industry since Infineon had engineered a turn-around over the past several months and appeared headed for a strong 2004. After failing to turn a profit in recent years, Schumacher recently returned Infineon to profitability.

The hard-charging Schumacher was credited with transforming the money-losing Siemens semiconductor division into the world's No. 7 chip maker under the Infineon banner.

Schumacher gave no indication he was about to leave. He was under contract through 2007. Just last week, Schumacher told the Financial Times he could imagine staying at the helm of Infineon for another 20 years.

In a conference call with analysts on Friday, CFO Fischl tried to calm nervous investors. He repeated that Schumacher's departure has exclusively for personal reasons. Infineon's financial standing has nothing to do with the resignation, he stressed. He also ruled out any change in Infineon's current strategy. Even the company's move to Switzerland is off the table, Fischl said.

Little is known about Schumacher's interim successor, Max Dietrich Kley. The former CFO of chemical company BASF can hold the title of Infineon CEO for only one year.

By: DocMemory
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