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HONEYWELL KILLS ERICSSON PACT, MERCHANT GaAs, TECH TRADE

Honeywell Inc has decided to call it quits on its three-year-old joint venture on PABXs with L M Ericsson of Sweden as part of its major restructuring in the wake of the decision to sell control of its computer business, according to Electronic News. Also to be closed is the innovative Honeywell High Tech Trading Co-operation, and Gallium Arsenide development at Richardson, Texas. The news follows the announcement late last year of $575m in write-downs that will be taken in the fourth quarter to cover the costs of restructuring and workforce reductions. The charge is expected to result in a loss of $380m for the 1986 fiscal year – Honeywell’s first full year loss since it went public in 1927. The Ericsson venture, Honeywell-Ericsson Development Co, was set up in Dallas, Texas and Anaheim, California to develop a PABX for the US market built around the Ericsson MD-110 digital switch; that came out as the Deltaplex 2000. Honeywell will continue to buy MD-110s from Ericsson on an OEM basis for its Controls operation, and Ericsson will continue US marketing of PABXs, and carry on the development effort, on its own. The GaAs research facility will shut down and operations will be moved to the research centre in Minneapolis, but the move is seen as marking the end of Honeywell plans to enter the merchant GaAs market. The space vacated in Richardson will be taken over by an expansion of the solid state sensor research arm of the Optoelectronic division. Honeywell High Tech Trading was an ambitious plan to emulate the big Japanese traders by picking up products, generally in the US and Europe, and marketing them in smaller countries. It was intended to generate more revenue from its offices around the world by giving them more products to sell, and had European offices in Brussels, Vienna and Milan; in early 1983, it employed 250 people.

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