Turkey dinners may never be the same in Akron, Ohio. At the height of gobbler season – after Thanksgiving and before Christmas – the Akron Beacon Journal reported the outcome of a bizarre paternity case involving a computer leasing company executive and a turkey baster. According to the paper, the court was told that the […]
Turkey dinners may never be the same in Akron, Ohio. At the height of gobbler season – after Thanksgiving and before Christmas – the Akron Beacon Journal reported the outcome of a bizarre paternity case involving a computer leasing company executive and a turkey baster. According to the paper, the court was told that the results of DNA testing indicated a 99% probability that the alleged father indeed sired the boy born in the summer of 1991. However, the defence pleaded, justice demanded that his client be judged in the context of extenuating circumstances. The mother who had brought suit to obtain financial support, the lawyer contended, did not become pregnant by ordinary means. Oh, no, the defendant’s lawyer protested, his client had been trapped… because the pregnancy resulted from artificial insemination. Elaborating, the counsel for the defence asserted that at the time of conception, the presently warring parties, rather than making love in a traditional fashion, engaged only in plenary osculation. The defence introduced testimony suggesting how this activity might have led to a blessed but, until the trial, somewhat underfunded event.
A physician employed by the defence explained how a turkey baster could be used to obtain results akin to the effect of the technique traditionally favoured for the production of baby Akronians (CI No 2,076). No evidence was introduced regarding the provenance of computer leasing executives. The jury of six men and two women debated the matter for two hours. In the end they did not swallow the story. Consequently, Judge Saundra Robinson of the Summit County Common Pleas Court ordered the recalcitrant father to provide medical expense coverage for the child. Further legal proceedings will determine what, if any, additional child support the father will be compelled to pay. Incredulous observers are hardly confined to Akron courtrooms these days. On Wall Street, IBM’s avowed honourable intentions haven’t had a salubrious impact, either. The company’s shares took a basting in the wake of overwhelming evidence that the company was in far worse shape than it had previously disclosed. Compounding the disillusionment of investors was their belated realisation that the company’s bosses were unwilling or unable to talk turkey. As recently as mid-October, IBM was telling investment advisors and anyone else paid enough to listen that its $4.84-per-share annual dividend was safe. By mid-December, however, the company’s smoke signals had changed direction. The dividend was no more safe than employees’ jobs, another 25,000 of which were then slated for elimination during 1993. At the time of the announcement, IBM’s chairman John Akers assured shaken shareholders, employees and customers that he had no plans to add his name to the 25,000. The company was quickly rewarded by a selling spree – not of computers, but of IBM shares – that plunged the stock below $50. The suggestion in IBM’s prepared (if that is the correct word) statements, which included the announcement of writeoffs in the vicinity of $6 billion, was that corporate cutbacks would target some business segments more than others.
By Hesh Wiener
The mainframe business, IBM executives intimated in a discussion with Wall Street analysts, was high on the list for cost reductions. Until December, the mainframe, however criticised, appeared to be the goose laying most of IBM’s golden eggs. Although IBM had previously said mainframe sales were unlikely to grow during 1992, only in December did the company admit its previous reckonings were on the high side, adding that mainframe sales for the year could be 10% below last year’s pace. IBM’s management said its problems were exacerbated by an unanticipated downturn in Europe (meaning mainly Germany); sales also have gone soft in Japan. Germany and Japan are the two nations outside the United States where mainframes are held in high regard. The rest of the world has its mainframe advocates, but their voices are difficult to hear above the vociferous yammering of crazed
Unix groupies. (Even now, after AT&T, which invented Unix, has dumped its Unix Systems Laboratories unit that owns rights to the software, the bleat goes on). The expressions of surprise on the part of IBM as it discovered what the rest of the universe already seemed to know about Germany and Japan show precisely how the Akers regime’s attitude has corrupted IBM’s sales force. We have no doubt that the forecasts of IBM’s markets sent in by its sales reps indicated a rather rosier outlook than the orders that followed, or, it seems, didn’t follow. These dutiful IBMers were not trying to cause confusion. On the contrary, they sought harmony with their leader. The result [of the most recent writeoffs and layoffs] will be a stronger and more prosperous IBM, chairman Akers said. Akers apparently plans to create some of that prosperity by cutbacks in large systems. As any fool knows, and many believe, IBM can undoubtedly find other ways to bring in $15,000m to $20,000m in revenue at gross margins in excess of 60% to replace the mainframe business it has put in jeopardy… plus additional billions to be lost as customers view IBM’s other products in a new and less flattering light. IBM belatedly realised that demolishing half its mainframe division might not go over well in either the computer or stock markets. So, for the edification of a Wall Street Journal reporter, its spin doctors dusted off some ongoing efforts to cobble together parallel processing machines compatible with its mainframes (CI No 2,077). The result was good public relations. The company’s share price jumped $3 on the news. But it signalled no change in IBM’s plans nor the likely consequences. Anyone attempting to deny the obvious problems IBM will face if its name no longer commands a premium in price, trust and corporate allure need only examine the personal computer market. IBM seeded the desktop computing business and then – through poor judgement and gross indifference to its customers – lost the fruits of success. IBM’s ideas spawned an industry that now exceeds the mainframe segment in gross revenues, precludes IBM’s profitable expansion into many emerging markets, limits the prices IBM can charge for virtually all its hardware and software products and humiliates the executives whose decisions shaped IBM’s ill-fated strategy, assuming there really ever was a strategy. It is no wonder then that President-elect Clinton, hosting an economic Tupperware party in Little Rock on December 15, paused to criticise IBM’s decision to undergo surgery.
Clinton raised the spectre of what must be the greatest fear of IBM’s executives, employees and shareholders: the procedure IBM has attempted to characterise as corporate liposuction might instead be an amputation. It was not merely the fate of IBM that worried Clinton. IBM’s corporate vivisection will be amplified the world over as reduced expenditures by the company, its present and former employees and its less wealthy shareholders slash gaping holes in every sector of every economy. A tragedy is unfolding, and all we have heard from the amply remunerated executives ostensibly in control of IBM is gobbledygook. Copyright (C) 1993 Technology New of America Co Inc. All rights reserved.