IBM Corp’s Spanish subsidiary IBM Espana SA lost much of its manufacturing work to IBM Europe’s plant in Montpellier with the launch of the latest line of mainframes, and the company’s situation has gone from bad to worse with the steep decline in the Spanish economy over the past year, Tribuna Informatica and Computerworld Espana report. Spain now registers one of the highest unemployment rates in the European Community, and the pain is being felt in full at IBM’s Spanish subsidiary. IBM Espana registered the first ever losses in its history in 1993 a net deficit equivalent to $70.2m compared with a $3.2m profit in 1992 and $130.6m profit in 1991. Turnover dropped to $1,575.5m from $1,674.4m in 1992. Breaking down these figures, the domestic market turnover dropped by 7.1% to $1,050.2m, while exports fell by 4.5% to $525.3m. Cash flow was up to $155.5m from $125.7m. The company invested $91.9m in 1993. Operating profit was up to $80.8m from the previous year’s $72.2m. The negative results were the result of the restructuring charge of $169.7m, since the workforce was cut by 11.3%, staff levels dropping to 3,826 from the 1992 figure of 4,479. An IBM spokesman threw oil on troubled waters by highlighting the increase in operating profit and cash flow, while maintaining that the 7% decline in turnover in the Spanish domestic market was smaller than the shrinkage recorded in the Spanish computer market as a whole compared with 1992.
