Philips has been stripped of many divisions such as lighting, chips and home appliances in recent decades. On its way to a bright future, the company needs to stick to what it does do well but that doesn’t seem so easy, as becomes clear in the final part of the trilogy Studio040 wrote about the company. ‘They do need to start investing.’
After operation Centurion, Philips Eindhoven suffered another blow with the move of the head office to Amsterdam in 1998. But at the same time, this marked the start of the creation of Brainport, explains then Philips chief executive Jan Post.
“The lead was taken by then-mayor of Eindhoven Rein Welschen. I had been chairman of the main board of the Dutch Philips companies for another five years and chief executive of its largest subsidiary, the Philips sales company. When the move to Amsterdam became known, I welcomed Welschen to the office the same week. We were totally surprised and said to each other: we must keep each other close. We must avoid being so dependent on one company.”
Launch of Brainport
‘But the basis for Brainport coming out in the early 21st century was the talks that were already being held in the late 1990s,’ Post continues. “In the first months after leaving for Amsterdam, that took shape. Stimulus and Horizon are European programmes that the region started claiming. That happened through Tilburg University board chair Yvonne van Rooy, she knew her way well in Brussels and opened the doors there.”
“Henk de Wilt, then TU/e president, and Theo Hurks, president of the Eindhoven Chamber of Commerce were the other driving forces. Leaving for Amsterdam gave such an impetus to those left behind, that was really the starting shot.”
That the region thrives on Brainport and the high-tech ecosystem that has since developed at lightning speed is obvious. NXP and Signify all have ties to Philips as does the machine factories division that was acquired by VDL, not to mention the flagship of the Brainport ecosystem ASML. All those companies were divested by Philips, but they were not divested by the region. “Those are all grandchildren who have now grown up and are successful. That’s something to be proud of,” says Post.
Moreover, Philips itself is still one of the largest companies in that same ecosystem, and despite the problems that plague it, there are also reasons to look to the future in a bright light.
Lists
Thus, Philips is still at the top of numerous nice lists in 2025. With 1231 patent applications, Philips won the most Dutch patents in 2024, and within medical technology, the company led Europe with 600 patent applications. Philips’ total patent portfolio contains more than 50,000 patents. And the company is also still in a good position as an employer.
Medical Technology
And the path taken by healthcare technology also seems to hold out for a bright future for the company. ‘The focus on medical devices is a good choice,’ says Rens van Leeuwen who worked at the company for 44 years and was on the works council for six years. “Philips is good at development but because of high wages, mass production is expensive. Concentrating on medical systems puts a strong emphasis on development and less on mass production.”
And with that focus on medical technology, the company does show its class, says Van Leeuwen. “Working brains can only be examined properly with an MRI scanner. Another example of technical support for medical science is the joint development by Philips and the UMC in Utrecht in the context of “operating without cutting”.”
“And this can be done with a HIFU system and with a Linac system, both from Philips. HIFU works with ultrasound and Linac with Rōntgen beams. The principle of both systems is to heat a tumour to above 55 degrees, because then the tumour’s tissue dies and the tumour dies while the surrounding tissue hardly suffers any damage. UMC Utrecht and Philips lead the world in this. So Philips really did have vision here and took social responsibility.”
Jan Post is also positive and sees plenty of bright spots at the company. “I have much more confidence in Philips in recent years than in the years before. I think that with Roy Jakobs the right person is in charge. He is transparent and extremely representative. That Italian entrepreneurial family taking a big stake in Philips was also encouraging.”
Political climate
“These positive developments are apparent despite economic headwinds from China. The Chinese market is not doing well. Moreover, political developments in the United States are not maing thinngs any easier for Philips.”
By this, Post is referring to Donald Trump’s re-election and his protectionist economic ambitions. Trump’s import tariffs make it harder for companies to sell products in the USA that are not produced within US borders.
“The shockwave caused by Trump asks for a reformulation of our investment strategy. We will have to start producing locally, in the United States itself.”
Cheese slicer
But it is precisely in the area of investment where Philips has lagged behind in recent years, say union officials Patrick Meerts and Arjan Huizinga.
“We have a major bleeder to deal with in America with the sleep apnoea affair. That’s why in the Netherlands the cheese slicer is applied left and right. Nowhere do you see Philips investing, it’s just cut after cut. I suspect they are going to pull out of Brainport because everything is reasoned from a global perspective. Philips Netherlands hardly matters anymore, let alone the Eindhoven region.”
“If 400 jobs have to go somewhere a fresh human resourcesteam comes in. Those people then understand HR but don’t know the company. They do a trick that they do at Philips but also do at Douwe Egberts. People see that, people notice that and that does not make them happy,” says Huizinga.
Royal
According to Huizinga, it is the employees who have to pay for the problems with the sleep apnoea equipment. “Then come reorganisations, outsourcing abroad, staff from outside as well as bad collective bargaining agreements that do not suit the company that uses the designation “royal”. The royal is no longer important,” says Huizinga.
‘Philips is obviously not what it used to be,’ says Jan Post. “Times have also changed. I’ve always felt that what you do as a company has to have support in the region you’re in and with your employees. With the power of shareholders, that has really changed at Philips. Yet shareholders are important, they have to be able to make a profit or they won’t come, we shouldn’t be naive about that. But if we only steer towards the interests of shareholders, and not those of suppliers, employees and stakeholders in the area where we are, we end up losing.”
“In these times, a company like Philips desperately needs shareholders but it is distressing that those shareholders are valued more than their own employees,” Huizinga says.
Perhaps unions should take a more active role the company? A legitimate question, the CNV executive thinks. “The average Philips employee is not someone who is going to stand on Malieveld to protest. That’s not the company culture; speaking out against the values the company stands for isn’t something people do very easily within Philips – even though those values are no longer propagated by the company itself. On top of that, there are a lot of people with long service records who are in the last phase of their tenure. They also think: I will bide my time,” says Huizinga.
“Having said that, what we do well with Philips is making a social plan. Therefore, for employees there is always a safety net. That’s very positive, but it also gives Philips a lot of peace of mind. So I also sometimes think, if the safety net wasn’t there, people would go to the barricades.”
Bottom line
Huizinga, however, does not rule out the possibility of Philips employees digging their heels in in the near future. “The lower limit has been reached. They cannot actually cut away any more than they have done now. Then at some point we hve to ask ourslves whether there is actually a Philips left in the Netherlands,” Huizinga says.
To keep the company for the Netherlands, Huizinga says, The Hague should also get involved. “Look at ASML and Shell, the government has something to do with that too. Those companies are also funded or subsidised for their expansion in the Netherlands. It benefits everyone to keep ASML in Veldhoven, so a lot is happening in terms of land sales, housing and infrastructure. They should ensure we keep the manufacturing industry in the Netherlands and don’t throw everything over the fence to other countries,” the CNV executive says.
Finally, according to Rens van Leeuwen, Philips can learn a lot from the sold business units that later became very successful. “The market in which ASML operates fluctuates enormously. Sometimes a lot of people want to buy smartphones at the same time and then it’s quiet again for a while and there’s a dip.”
“ASML did not lay off staff at a time when the market was bad, as is usual, but simply continued to develop. When the market picked up, ASML built an advantage over its competitors. That eventually led to ASML capturing the vast majority of the global market – a brilliant move,” Van Leeuwen said.
This was the third and final part in the trilogy about Philips. Read back part 1 on the aftermath of Operation Centurion and part 2 on the internal problems that led to the sleep apnoea affair.
Source: Studio040
Translated by: Vanya Dobrikova
