Conference 7.286::digital

    You caught me by suprise, but I'd like to comment.  Possibly the best
    is to comment on some of your items.  First, I don't understand the 
    point regarding our U.S. Military Security being based on chips and 
    the win-win situation with Japan.  My understanding of military
    security is quite different.  I'd like some more explanation.
    
    You suggest that we would get the best of both management practices.  I
    suggest that we might get the worst of both.  Again, I don't understand
    the benefit of 6mo. to 1 yr. field assignments.  When I was with
    Bechtel, those assignments were two years and they brought about as
    many problems as they solved.  They did give us insight and
    understanding, but I believe that can be gained in other ways.
    
    You seem excited that it would"...benefit every employee...", which I
    do not believe is necessarily correct.  I anticipate that many jobs
    would be duplicated and that one of the great advantages would be to
    eliminate that duplication.  Giving us the economies of scale, which
    probably won't benefit those who must find new jobs.
    
    Probably the thing that set me off is your assumption of the Japanese
    ..."proven superiority ... in employee involvement.  I had direct
    contact with TRW-Fujitsu and their effort to build ATMs.  I cannot
    believe there could be a poorer example in the world.  As you know,
    that effort was a dismal failure and only recently has Fijitsu sold
    any of their ATMs in the U.S.  Several years after that, in a U.S. Bank
    I encountered the same employee involvement efforts and had to put down
    an insurrection - the culprit was the ex-TRW-Fijitsu Applications
    Development Manager trying to implement their policies.  Final
    experience in this regard is my very close friend and now a VP-Mgr. of
    R & D for a U.S. Mfg. Co. that used to work for Cannon.  Before that we
    worked together for 10years and I know him - the problem was Cannon.
    
    One possible advantage is the mix of our products, if we really
    complement each other.  Obviously, Fijitsu is way ahead of us in
    on-line banking.  This could go well with some of our new efforts and
    strengthen us both.  I don't know how well this works out across the
    board, but it could be the greatest benefit.
    
    All six of your disadvantages are right on target.  I think that you
    may have stated them too simply.  Backlash will occur, incompatability
    of management styles is guaranteed.  I suggest that the Japanese might
    have some problems with this merger or buy-out.  The rejection of the 
    Eastern Philosophy is assured.  Mysticism and Christianity do not mix
    well, and I would guess that most of DEC's employees are Christian or
    raised in that ethic.  Great care and thought would be needed to clear
    this hurdle.
    
    My guess is that if the Fijitsu management prevailed the organization
    would not meet expectations.  I am still learning about the strength
    of our management and would not hazard a guess if we have the
    experience, resolve and fortitude to bring it to a success.  
    
    You certainly gave us something to think about.

    I remember someone telling me a long time ago; "When you buy another
    company, you buy their problems." The way I see mergers, with anybody,
    they have to complement eachother. The present business climate
    of either company is the two distictly different, everythings........
    
    What makes anybody think that DIGITAL needs merger help from the
    outside? We have a very good balance sheet, great ratings and a
    good start on the next decade. We made the investments, they will
    pay off. 
    
    Doom and gloom press reports are kindling for the evening fire.
    
    The sky is not falling, it's just the low clouds covering the bright
    sky.
                                                                   
                                                       hy

Speaking of gagging...

Doesn't Fujitsu own, or at least influence, Amdahl, who makes, can you say, I
thought you could, IBM mainframe clones!?!?

I love it...

(forgive give me if I am mixing up my Japanese companies)

(one more thing, from whence is this idea coming from...  I sincerely hope this
is not being seriously entertained...)

    It seems to me that Digital would become the marketing/sales/service
    arm of Fujitsu in this country, and little more.  This is hardly the
    way to sustain the long term viability of the company.  No thanks.
    
    John

    
     While I strongly disapprove of mergers, I like aquisitions better,
    this topic does open up the thought process for internationalization.
    I believe Digital is well on its way to being a Global player in the
    computer market. What we should be doing is investing into other
    countrys companys. Much like Japan has done to the U.S. auto industry
    how many toyotas are built in the U.S ehh?
     We have offices in other countrys already, I *hope* their management
    follows their culture and plays on their society. How could a merger
    with another company benefit DEC when we already have our foot in the
    door.
     A billion $$$ in the bank should aquire some nice ripe pickings!
    
    Merge NO Aquire YES
    Mike Z.

    
    Second the question posed in .3: where is this coming from? Is it
    based on a reasonably strong merger rumor, or is it the idle musing
    of an underutilized mind?
    
    
    	("What a terrible thing, to lose a mind..."  D. Quayle, attempting
    	  to paraphrase "A mind is a terrible thing to waste.")
    
    

    REF: Prev 5 replies
    
    This is an idea I tossed out for consideration -- pros and cons, and it
    has not official sanction whatsoever.
    
    Why?  A perception that
    
    Japan has a BIG lead on chip technology
    
    Digital gets a lot of stuff now from Japan
    
    Japan's management practices (some) are proven to be better per
    Digital's Japan Study Mission Team results via our people spending two
    weeks there.
    
    Most U.S. military hardware is imbedded with chip technology and now is
    HIGHLY dependent on computer and chip technology to operate, and to
    stay current for the future.
    
    U.S. Memories effort fell apart.
    
    Thus, an idea for discussion -- nothing more than that.
    

	Two weeks? Doesn't seem to be a long time to study management.
	Did the team speak Japanese? If not I'd discount the study off hand.

	In the past many Japanese-American joint ventures have had a rough
	time. The differences in management style and priorities are often
	huge. In a merger one side has to take over control. Who would it
	be here? I can't see the Japanese government or banks letting Digital
	take over. I can't see Digital management letting anyone else take
	over. The conflicts would rip things apart in days. At least that's
	how it looks from here. What we really need is some comments from
	Japanese DECcies. They have a much better understanding of what it's
	like to be Japanese working for an American company and also what
	working for a Japanese company is really like.

				Alfred

    
    What would a Fujitsu/Digital merger be called?
    
    
    
    			Futal
    

    While we're on the subject of mergers/aquisitions, the brokerage
    house Sanford & Bernstein have filed with the SEC the fact that
    they now own more than 5% of Digital.  That ought to spur a few
    rumors on Wall Street. 

    re: .10
    
    If the brokerage house purchased the stock for a client are they
    required to divulge the client's identity in the SEC filing?

RE: .7    
>    Japan's management practices (some) are proven to be better per
>    Digital's Japan Study Mission Team results via our people spending two
>    weeks there.
    
    I think the most you can claim about the Japanese management practice in
    high tech industry is that it is better for the Japanese companies. 
    I once saw a picture of NEC's (or Fugitsu's) office where I saw roll
    after roll after roll of densely packed desks with big terminals on top
    of them and engineers stuffed into what little space there was writing
    software.  In that kind of environment, what do you think would happen
    to our software development projects?
    
    Eugene

    Late-breaking news suggests that it was Mitsubishi that bought the
    stock.  From a picture I have of their organization, they don't
    have a computer company under their wing like all the other big
    Japanese conglomerates ("keiretsu") do.  Maybe they're looking
    to fill out their portfolio?
    
    By the way, at DEC Japan, the rows of metal desks are separated by
    low partitions, they're not all jammed together.  The group manager's
    office cube is only slightly bigger than the engineers' cubes.
    They DO tend to work 7:30 a.m. to 8 p.m., though.

	I wonder if that is the spark for our stock jump today?

    My stockbroker read me the news directly off the Dow Jones.  Digital
    spokesman Mark Steinkrauss states that he knows of no reason for the 
    sharp late-session jump.  He claims that the standard takeover rumors
    are floating around, but that no one is taking them seriously.
    However, the DJ Professional Investor reported a rumor of the 
    "13-D" filing by Mitsubishi Electric Corp. of Japan being
    circulated among traders.

The Mitsubishi purchase was announced in LDP::WORLD_FORUM last week.

The person who posted it asked on Monday why noone had commented on his
posting.  Noone picked up the bait.

/john

  Re: .15

  Excuse me for the ignorance.  What's "13-D" filing?
  BTW, I'm sure no one is in our office at 7:30 a.m.

  Dolby SHIMONO
  DEC-Japan

    "13-D" refers to a form which must be filed with the Securities and
    Exchange Commission (SEC) in the U.S. when a party acquires more than a
    certain percentage ownership in a U.S. Corporation.  (I think the form
    number is actually "13-G", not that it really matters...)
    
    You may be able to find more information in SUBWAY::INVESTING.

    As John Covert pointed out this was discussed as a rumor in
    LDP::WORLD_FORUM, note 5.229.
    
    I've transcribed the quote from the Wall Street Journal in note 1726.0
    in SUBWAY::INVESTING.  Details regarding takeover strategies, defenses,
    required SEC disclosures, Digital's stock price and so forth are all
    discussed in that conference.
    
    Patrick Sweeney

    
    Due to late breaking news regarding Mitsubishi, I have changed the
    topic title from the previous Digital+Fujitsu to a now more relevant,
    and certainly less conceptual topic of Digital+Mitsubishi.  ;-)
    

        A combination with Mitsubishi would open up the possibility
        of a greatly expanded Employee Purchase Program. :-)

        Bob

    The Mitsubishi rumor was noted in the 3/1 Wall Street Journal and
    on last night's Nightly Business Report.  
    
    Mark
    

************** NEWS System Article -- DIGITAL INTERNAL USE ONLY **************

Subj:	Rumors of Takeover Boost Digital's Stock
From:	MISG News Thursday 3/1/90
Sect:	CORPORATE News
Posted:	MAR 1, 1990

	[Editor's Note:	Please note that this is a RUMOR only!  It is reported
			here because it has affected our stock price rather
			dramatically. -- RCP]
				    --------

RUMORS OF DIGITAL TAKEOVER

	"Rumors of Takeover Boost Digital's Stock"  (The Boston Globe, 3/1/90,
	 PP:31)

Digital Equipment Corp.'s stock price soared more than 8 percent in late
trading yesterday as unsubstantiated rumors swirled that a Japanese company had
bought stake in Digital and might be eyeing a takeover attempt.  Digital,
periodically the target of takeover speculation, said it was unaware of anyone
accumulating its stock, which jumped 6 to 78 in consolidated trading on the New
York Stock Exchange.  The sharp run up apparently was triggered by speculation
among Wall Street traders that Mitsubishi Electric Corp. of Japan had notified
the Securities and Exchange Commission that it had acquired 5 percent or more
of Digital's stock.  Mark Steinkrauss, Digital's director of investor
relations, said that the company had not received notice of such a filing by
anyone.   However, Sanford C. Bernstein & Co., a New York investment firm, did
inform the SEC last week that its Digital holdings for clients had reached 6.2
million shares outstanding.  The firm's filing said that the clients had
acquired Digital stock for investment purposes only.  This is not the first
time Digital had been named as a takeover candidate.  In past years AT&T Co.,
NCR Corp. and Unisys Corp. have all been rumored to be studying the company. 
    

    "It's all baloney," said Michael Geran, who follows the computer industry
    for Nikko Securities Co. International, a unit of Japan's giant Nikko
    securities group.  "Mitsubishi isn't in this business," he said.
	-from today's Boston Globe

    I guess he thinks that Mitsubishi's current businesses are closely
    related -- like tuna fish and cars.

RE: .12, .13.
Just read something from a book titled _What Every Engineer Should
Know About Artificial Intelligence_.  The author William Taylor grew up
in Japan.  The following is extracted from page 286 of the book.
I can't help but admire the dedication of those workers, but I doubt any of
my friends of software type can adjust to this kind of environment.

Eugene


------------------------------------------------------------------------
...  When I developed software for Nippon Electric (NEC), I traveled to 
Japan to install our products at the end of each project.  NEC's programmers
work at rows of desks jammed tightly together.  Each desk is about two
feet wide and eighteen inches deep.  Behind each row of desks is an aisle
about eighteen inches wide, and behind the aisle is a bookcase as high as
the desk.  The arrangement is repeated, row after row after row, filling
a building the size of an aircraft hangar.  People stay at their desks 
because it causes so much trouble for other workers when they use the aisle.
     I arrived at 7:30 every morning just like everybody else because my
hotel was nearby and I had little else to do anyway.  I was awed to find that
most of the desks were still occupied at eight, nine, even ten o'clock at
night.
     One evening about 7 P.M., there were only a few hundred scattered
bodies still toiling away.  Why were there so few people working?  Was
there a plague?  No.  Management feels it is unhealthy for people to work
twelve hours per day all six days of the week, so they have a rule that
everybody has to go home by 6:30 on Thursday evenings.  What about all 
those guys still toiling away?  Well, if their project is urgent, they can 
get permission to stay, but that can be granted only twice a month.  Sure
enough, there was a guard checking passes to make sure all those workaholics
had permission to stay.
-------------------------------------------------------------------------

    
    Posted with permission of the author, enclosed below is the highlighted
    summary of the Digital Study Mission To Japan.
    
                
           D I G I T A L   E Q U I P M E N T   C O R P O R A T I O N
    
    
     
                           Total Quality Management
             
                                 Study Mission
             
                                   to Japan
             
             
             
                             2 - 19 November 1988
             
             
             
                          Summary Notes Prepared by:
             
                                  Ron Bourque
                              U.S. Manufacturing
                               Quality Assurance
    
    

             Japanese Companies visited:
             
                Fujitsu Nagano Factory
                Ricoh Atsugi Factory
                Ricoh Gotemba Factory
                Fujitsu Numazu Factory
                Mitsubishi Electric Corp. [Kita-itami Works]
                Matsushita Electric Industrial Company, Ltd. [Kadoma & 
                   Osaka Works]
                Omron Tateishi Electronics Company [Kusatsu Works]
                Hitachi Ltd. [Kanagawa Works & Odawara Plant]
                Nihon Digital Equipment Corporation [Ichikawa Plant]
                Oki Electric Industry Company, Ltd. [Honjyo Works]
                Sumitomo Corporation [Tokyo Office]
             
             The Study Mission also included a Lecture on Japanese culture
             and customs by Ms. Jean Pearce of The Japan Times,
             
             an all-day Lecture on Total Quality by Dr. Ichiro Miyauchi of
             JUSE
             
             a weekend visit to a Shinto shrine: Tsubaki Grand Shrine
             
             and a little sightseeing [e.g. Nijo Castle & Ninomaru Palace,
             Handicraft Center, Kiyomizu Temple in Kyoto, etc.]
    

             
    
                                   Cultural Aspects
             
             o  We strive to achieve economic security; they know it just 
                doesn't exist and are always trying to optimize the 
                opportunity of the moment
             
             o  Group activity is part of their culture; they do it 
                naturally
             
             o  The Japanese try so hard to make us feel comfortable; 
                making suggestions in their culture must be a low risk 
                proposition
                -  Cannot debate in Japanese
                -  Sato / Nixon misunderstanding
                -  No one is ever all right or all wrong
             
             o  Concept of WA ---> Harmony in everything
             
             o  "The nail that sticks up gets hammered down..."
             
             o  Self-Discipline is valued [Shintoism]
    
       	     o  Value the process, not just the results

                              Management Aspects
    
             o  Japanese managers think in terms of customer desires and 
                conveniences instead of their own or their company's
                -  The customer is KAMI (God).
                -  Corroborate data with customers
             
             o  Management by and with factual data
                -  Relevant and necessary, not just obtainable
                -  Process control, not just results data
                -  Properly analyzed
             
             o  Detailed knowledge of manufacturing operations seems to 
                increase with the level of management
             
             o  Management and control organizations view problems as 
                opportunities to help, rather than as evidence of poor 
                performance
             
             o  The goal is "to avoid the slightest possibility of a 
                defect occurring"
             

                              Management Aspects
    
             o  Exponential improvement results are achievable
                -  Routinely seek 3X improvement goals in quality and 
                   reliability
                -  Yearly goals and slogans
                -  Constantly visible [e.g. badges, etc.]
                -  January newspaper publishes yearly plan
                -  Sent home to family!
             
             o  Their philosophy on people especially their employees is 
                best summed up by Omron Tateishi's motto:
             
                   "To the machine, the work of the machine; to man, the 
                thrill of further creation."
             
                Technology is for people, not the other way around
             
                Socio-Tech: Technology for Society [e.g. conference room 
                toys, etc.]
             
             o  Automation is done to reduce variability and improve 
                quality as the primary goal
                -  Attack toughest problems first
                -  Eliminate mundane, difficult or hazardous jobs
                -  Autonomation is the norm
                      

                              Management Aspects
    
             o  They manage the process not just the results
                -  When testing yields no failures, they increase the 
                   severity of the test
                -  The goal is always to reduce Baratsuki [dispersion]
                -  Continuous, never-ending, improvement
                -  Inspection is done to obtain the information required 
                   to improve the process [e.g. P-D-C-A], not to sort out 
                   the bad
                      
       	     o  Visibility Management: scoreboards, competitive bonuses, 
                etc.
    
       	     o  Strategic Planning / Total Execution
       	        -  Dynamic [e.g. Flight Plan, etc.]
       	        -  Everyone is involved [even send plans home in company
       	           newspaper
    
       	     o  Continuous Education
             
    
    

                                   Paradigms (of U.S. and Digital)
             
             o  Stockholders' return is most important vs "the customer is 
                KAMI."
             
             o  "The Boss" is the most important customer instead of the 
                next person in the process
             
             o  Management by Exception vs Continuous Improvement
             
             o  Meeting specifications and standards vs trying to excel
             
             o  "Not invented here" syndrome vs trying to learn from 
                everyone
             
             o  The Lone Ranger vs Teamwork
             
             o  Privileged Information vs Visibility Management
             
             o  Quality costs more
             
             o  Quality Control is the job of specialists & professionals 
                in the field vs quality consciousness in everyone
             

                                   Paradigms
    
             o  Total Quality includes quality, reliability, cost, 
                delivery, safety, morale, etc.
                -  Quality of the company, management, product/service, 
                   employee behavior, human resources, etc.
                -  KAIZEN & P-D-C-A Cycle [the secret!]
             
             o  Improvement when we have time vs as the top priority
             
             o  Valuing labor for their hands instead of for their minds
             
             o  Education as an expense vs as an investment

    
                                    Results
    
             
             o  Very few people controlling many machines
             
             o  Try to find someone not doing something
             
             o  Highly competent workforce like world class musicians 
                learning to play a symphony
             
             +  Just about every Japanese Company that has won the Deming 
                Prize was looking at Chapter 11 when they started -- As 
                they recovered, they recognized the power of TQC and kept 
                going.  They didn't stop at solvency!
    

    
                              Supplier Strategies
    
             
             o  When we can no longer compete, we turn our former 
                competitors into suppliers [e.g. Fujitsu, Ricoh, Hitachi, 
                etc.]
             
             o  The Japanese never allow an external supplier to manufac-
                ture a key component
             
             o  Suppliers are usually affiliated in some way
             
             o  They maximize their value added wherever possible
    
             
             Remember our television industry?
             
             What percentage of your components and sub-assemblies are 
             made in Japan?
             

    
             To become more competitive as managers, we should:
             
             o  Invest at least 20% of our time in our own training and 
                self-development
             
             o  Obtain a better understanding of quality management tools 
                and begin using them with our people
             
             o  Change the environment to one where both good and bad news 
                are valued
             
             o  Become more familiar with our operations -- obtain 
                detailed knowledge beyond budget and schedule data
             
             o  Become more familiar with our customers 
             
             o  Increase our knowledge of the competition [what they are 
                doing, not just their financial reports]
             
             o  Become involved with and participate in SGIA's
             
             o  Make improvement our highest priority
             
       	     o  Re-visit our sourcing strategies
    

             
             It isn't so much the difference between their workers and
             ours as it is the differences in management styles which
             create the differences we see on the factory floor.
             
             We are in a race that has no finish line!!!
             
                                                              Thank you,   
            

    
    re -.1
    
     Gee, most of that stuff sounds like it comes out of a DEC residents
    mind, heart and mouth. You all get the picture. I leave by saying the
    customer IS god, so try telling others that who aren't with the
    customer everyday, night, weekend....holiday....vacation.
    
    -Mike Z.

  Re: "The customer is KAMI (God)"

  I guess "The customer is God" is an intense expression to the American.
  Even to us, the Japanese, it sounds a bit strong (or I'd rather say,
  "funny").

  "O-kyaku-sama wa Kami-sama desu" (The customer is God) is a pretty popular
  phrase in Japan.  It's originated by a popular ENKA (a genre of Japanese
  pop music) singer's motto, which contains some pretense, I think.

  Anyway, our "Kami" is not identical to "God" in the West.  You'd better
  not overrate the phrase.  For me, it's the same meaning as "Customer
  Satisfaction."

  dolby

    Can someone in Japan tell us a) if this rumor is being reported in
    Japan and b) what is likely to  happen if Digital is actually bought
    by a Japanese company? Please.
    
    		Alfred

Re: < Note 1037.29 by CVG::THOMPSON "My friends call me Alfred" >
>a) if this rumor is being reported in Japan

  Nikkei Sangyou Shibun (Nikkei Industrial News) this morning (March 2)
  has a small article by the New York correspondent on the front page.

  The contents are just about .23 and .24.  And more; The firms on the
  rumor includes
    Mitsubishi Electric
    Mitsubishi Trading [???  In Japanese name, Mitsubishi SHOUJI ]
    Matsushita Electric Industrial  (Panasonic)
  An analyst's comment: "It's difficult for a Japananese company to buy
  DEC, which costs over 1 trillion Yen."

  I couldn't find any article on the matter in major papers such as Nihon
  Keizai Shinbun and Asahi Shinbun.

  dolby

    ..it was also reported that all the companies listed in .-1
    denied the rumor and were preplexed with it.
    

    Personally I'd prefer Matsushita to Mitsubishi, but as they both deny
    the rumour, I'll just have to carry on forking out large wads of dosh
    for my hifi...

Worldwide News                      LIVE WIRE

                              Stock Purchase Rumor 

                        (This is a message from Ken Olsen)

     It has been rumored lately that a number of companies, both 
     domestic and overseas, have expressed an interest in Digital 
     stock.  We feel very confident that if they are buying stock, 
     they are doing it as an investment because they see the inherent 
     quality of Digital.

     Successful Japanese and European business people, for instance, 
     are like Digital.  They take a long-term view, and they believe 
     in long-term investments in people and technology.  Like us, they 
     are willing to make short-term sacrifices for the long-term good 
     of the customer, the company and employees.

    RE: .34  "Repel All Boarders!"
    
    Better yet, with the hope of opening new markets in Eastern Europe,
    let's make it "Repeal All Borders".
    
    

What if we spend the cash on "golden handshakes" and the stock drops ten points?

How vulnarable would that make us until the long term savings put the cash back?

	I don't know how they'll budget the money but I doubt it will be
	a large depletion from cash on hand. The highest estimate of cost
	I've seen in the press is about $280M which probably still leaves
	over a Billion in the bank even if we did take it from there. It's
	seems a little early to panic. 

				Alfred

    Knowing that Q3 looks like a pretty poor quarter, and that Q4 may not be any
    better, makes me think that the logical thing to do would be to take a
    charge against profit for whatever the buyouts cost.  It would not be
    smart to directly reduce assets by opening the piggy bank -- especially
    in light of the expected lean income statement.
    
    	DM

RE: -.1

>    Knowing that Q3 looks like a pretty poor quarter, and that Q4 may not be any
>    better, makes me think that the logical thing to do would be to take a
>    charge against profit for whatever the buyouts cost.  It would not be
>    smart to directly reduce assets by opening the piggy bank -- especially
>    in light of the expected lean income statement.

     If the write-off consumes the profits, the excess money has to come from 
	the balance sheet.

    re .39:
    
:
:    If the write-off consumes the profits, the excess money has to come from 
:	the balance sheet.
    
    yep, but not necessarily from _cash_.
    
    -DM-

:
:    If the write-off consumes the profits, the excess money has to come from 
:	the balance sheet.
    
>    yep, but not necessarily from _cash_.
    
     Well it's the most liquid asset, you could increase your liabilities
     but the interest increases your expenses.  Or are you suggesting we
     have another stock offering?

	Larry

    I believe that losses are deducted from Retained Earnings. This may or
    may not reduce Cash, depending on the non-cash expenses such as
    depreciation reported on the income statement. 

    OK, if you want to talk about accounting...
    
    CASH is an asset on the balance sheet
    
    DEPRECIATION is an expense
    
    ACCUMULATED DEPRECIATION is an amount deducted from the value of PLANT
    AND EQUIPMENT on the balance sheet
    
    Two core principles of accounting:
    
    (1) Changes in the balance sheet are reflected in the income statement
    
    (2) Retained earnings is not a account from a ledger but a residual.
    Arithmetically, total assets - liabilities - stock at par - additional
    paid in capital.
    
    The accounting treatment of this ("voluntrary separation") in the
    income statement will be either an increase in the ordinary "cost of
    product sales" expense or an "extraordinary expense releated to
    restructuring"
    
    Patrick Sweeney
    
    (I'm in the field: in the Financial/Digital Customer Center and this
    reflects my opinion)

     
    
>   (1) Changes in the balance sheet are reflected in the income statement
    
    Only if they affect income.  Disposition of an asset at book value,
    retirement of debt from cash or the sell of stock, etc. will not
    show on the income statement.  The most glaring example of a
    transaction that cannot appear on the income statement is a companies
    buying and selling of it's own stock(Treasury stock).  Gains and losses 
    are either directly charged to retained earnings or additional paid 
    in capital.
    
    In about 1976, the SEC and the FASB began requiring public companies
    to issue a FUNDS Statement to correct these deficiencies.
    
>   DEPRECIATION is an expense
    
    DEPRECIATION is the periodic charge against income to amortize
    the cost of a ASSET with an effective useful life in excess of
    1 year.  Useful life is defined in conformance with guidelines
    of the FASB and the IRS.  The expense occurs whenever the asset
    is paid for.
    
>    The accounting treatment of this ("voluntrary separation") in the
>    income statement will be either an increase in the ordinary "cost of
>    product sales" expense or an "extraordinary expense releated to
>    restructuring"
    
    Unless we expect to have continued termination's ad infintim..
    It had better be an "EXTRAORDINARY EXPENSE".  Failure to do so
    would violate the GAPP of fairly representing the current operating
    results in context with past and future events.
    
>    (I'm in the field: in the Financial/Digital Customer Center and this
>    reflects my opinion)
    
    You are obviously a business major, an accountant would know the
    difference.  ;-)
    

    This note discussed the earlier Mitsubishi rumor.