The solution to restoring Compagnie des Machines Bull SA to health lies not in breaking up the company or ceding parts of its micro division Zenith Data Systems, say chief executive Bernard Pache and Zenith president Jacques Noels. According to La Tribune Desfosses, Pache said in Boston that Cutting Bull up into pieces goes against […]
The solution to restoring Compagnie des Machines Bull SA to health lies not in breaking up the company or ceding parts of its micro division Zenith Data Systems, say chief executive Bernard Pache and Zenith president Jacques Noels. According to La Tribune Desfosses, Pache said in Boston that Cutting Bull up into pieces goes against the sense of history. I can’t just make a clean slate of Bull; it’s necessary to retain some continuity of experience. Even though, at the end of last year, he said, some people thought that the solution to all of Bull’s ills was to cut the group up into centres of activity as IBM had envisaged, since then things have evolved. The problem, he said, is that Bull’s customers demand that the company handle all of their information technology problems, which makes it inconvenient to approach the market with autonomous product or service groups. As a result, the company has no choice but to stick to the market’s demands, he said. The demand for personal computers from large Bull accounts represents 50% of their total equipment purchases, Pache argues, saying the company remains attached to its micro subsidiary. Zenith continues cost cutting measures, having eliminated 400 jobs, or 20% of its workforce, between January and June and having cut its sales and administrative costs by 12%, the paper reports. Furthermore, says Zenith president Noels, Zenith increased its delivery rate by 34% in the first quarter. Pache acknowledges that Zenith still needs greater sales volume, however. In this area, the costs of production are sensible to volumes and we’re not the most well placed in terms of materials, Pache said. Noels says in the article that Zenith needs a financial, rather than a technological, partner, but adds that he does not mean a capitalistic investor. We don’t envisage the cession of any part of Zenith, he said. The statements by Pache and Noels, the paper concludes, seem to indicate that Pache has no intention of presenting a radical change in Bull’s strategy to the French government in mid-July. Pache says that he instead hopes to restore Bull to operating profit, from which point, he says, experience proves that Bull’s problems will resolve themselves.