NCR Corp has for several years tried to foster the perception at the Dayton company that all its stakeholders – shareholders, customers, employees past and present – would be treated impartially and would be regarded as of equal importance by the board, but with a public company, the ultimate arbitors of what is best for the company and what its future should be are the owners of the business, the shareholders. And shareholders are notoriously disloyal to those that look after their interests by running the company as NCR chairman Charles Exley is only too well aware. His claim that $125 a share woild be a fair price for NCR was only a recognition of these facts of corporate life – there comes a price when the shareholders to a man, widow and orphan will be determined to sell out no matter what the board may say, and Exley is not at all pleased that Wall Street has taken the suggestion of a $125 a share price to be a negotiating. The fact that the board set a price does not mean that we want to sell the company – the company is not for sale, Exley said. We want AT&T to go away and leave us alone so that we can get on with our new product programmes, which represent a once-in-a-lifetime opportunity to revolutionise the computer industry. If we are to realise NCR’s extraordinary potential, we must be free to dedicate all our energies and resources to the task at hand, adding that If AT&T finds $125 per share outrageous, that’s fine with us. We want them to go away and leave us alone. Meantime according to the Wall Street Journal, a battle had been raging since the summer over whether the computer business should be shut down or rescued by some move such as the proposed acquisition of NCR – but acquisitions of other companies were also in the battle plan. Meantime AT&T Computer Systems president Rich McGinn told our sister paper Unigram.X last week that AT&T had discussed the merger notion early on with some of its largest customers, and that 95% of them had backed the idea. Whether the scenario they were given included the possibility of a hostile takeover is unknown. McGinn claimed the union of AT&T and NCR, which would create America’s fourth largest computer company, would be less painful than past mergers between other titans simply because of their existing mutual dependency and dedication to open systems. Something like this has never before been attempted in the open systems arena, McGinn said. AT&T’s computer operations have been a fount of red ink, despite just scoring, according to McGinn, their best quarter and their best month in October, up 25% domestically. McGinn, who is unsure what his position will be or if he will even have a job after the smoke clears, believes that the merger with NCR would immediately sop up some of the flow.
Excess baggage
McGinn, for one, would be prepared immediately to jettison AT&T’s costly phone company-designed information systems infrastructure, which he claims adds substantially to his overheads, and exchange them for NCR’s more modern billing and ordering procedures. Doing it from scratch would take two to three years, he reckons. Simply adopting NCR’s system would mean a year’s transition and savings of tens of millions of dollars. Ironically, AT&T has just moved its computer headquarters, home to 1,000 staffers, to Parsippany, New Jersey, a site that lies cheek by jowl with NCR’s regional headquarters. AT&T is now contemplating moving that site again, to Dayton, Ohio. McGinn says AT&T has a notion of exactly what will have to give in the product line if the merger goes through, but has no operational plan detailing the excess baggage, something it is waiting to formulate in conjunction with NCR. AT&T is gradually shifting its focus from the WE32000-based 3B minicomputer line to a succession of iAPX-86-based machines, partly bought OEM, initially from Ing C Olivetti & Co SpA and latterly from Intel Corp, and partly designed in-house. It has also been working on multi-processing with Pyramid Technology, and has an OEM deal with Pyramid for top-end machines. Pyr
amid currently appears confident that its agreement will remain unaffected by the proposed merger, but NCR Corp has its own Intel-based Series 3000 multi-processors, including very high performance parallel processors in the pipeline, and one of the main attractions in its new Intel-only strategy is the benefits of binary compatibility throughout the entire line – and AT&T looks to be ready to agree.
