Following completion of the buyout by J H Whitney Co, the new chairman and chief executive of Prime Computer Inc is to be IBM alumnus James McDonald, who took on the president’s job at Gould Inc, found a can of worms and ended up selling off the company in pieces. McDonald says he plans to reduce research and development expenditure and to break the Natick, Massachusetts minimaker down into much smaller operating units, each of which will be a profit centre. All businesses will be continued, but job losses are certain. The biggest challenge will be to generate a big enough surplus at Prime to meet $150m in annual interest payments on the burden of debt assumed by the company in the buy-out. McDonald is confident that Prime’s maintenance and service operations will generate the necessary cash. Once the buy-out is done, Prime will at least for a time be privately held.
