Control Data Corp plans to spin off its Data Storage Products OEM disk drive business into a separate subsidiary, saying that the move will make it easier to explore joint ventures, partnership agreements – or divestiture of the business. It would also make it easier for the division to raise money on its own account, but Control Data is thought to be ready to sell the business if it can get a good price for it: fierce competition from Japan has turned disk drives into low-margin commodity items, and the CDC unit has only recently returned to profits after several years of losses. Turning it around necessitated bringing the US workforce down to 8,100 from 20,000 and moving much manufacturing off-shore. Selling the business altogether would amount to another major reduction in Control Data’s size: at $974.5m, the disk drive business accounted for almost a third of the Minneapolis firm’s 1987 turnover.
