Conference 7.286::digital

    In some countries (don't know if Germany is one of them) as part of the
    PRESENCE requirement (in order to sell you have to manufacture to
    create 'selling credits') the Multinational is require to join a
    national company and do business under its new name.
    
    In Japan, you can not do business, unless you join with a Japanese
    Company.   
    
    Sometime, part of the requirements call for the locals to own (stock)
    part of that joint venture.   This case you cited may well be this
    case.
    
    Doubt that we are forming new companies and moving existing employees
    to them.   However, I can be wrong.
    

    The employees of Digital-PCS Systemtechnik GmbH come from two sources:
    	- Digital Equipment GmbH (the German subsidiary, which hosted the EIC
    	  organisation, which itself came from a merger of CSS and
    	  SWS/Engineering)
    	- PCS Computersysteme GmbH
    
    PCS Computersysteme GmbH no longer exists since it has become
    Digital-PCS Systemtechnik GmbH. The owning company is Digital-Kienzle
    Computersysteme GmbH & Co. KG which is in turn owned by ... etc. etc
    until you get back to Digital Equipment Corporation at the top of the
    pyramid.
    
    When I spoke of moving employees, I was referring to changing the name
    of their employer, not relocating them. (The Digital-PCS organisational
    change involves only a minor relocation for the ex-Digital Equipment
    people who will move to a new building located 12 km away.)
    
    I once saw a map showing the company and holding structure of
    Digital Equipment Corporation worldwide. It was about 1m x 1m and
    written in small print i.e. it is extremely complicated. Is Digital
    required to disclose this publicly, or is it viewed as company
    confidential information?
    
    Anyway I was just interested if any sort of restructuring in terms
    of splitting Digital up into separate companies is going on in any
    countries other than Germany.
    
    Mike                         
    
    

    Again seems like this is what I explained of Country Significant
    Business Presence Requirements.   As you said they are not relocating
    employees.    It seems there are two other companies and DEC (Germany)
    involved (in this rather complicated transaction).   I wonder if we
    are reporting these employees under the 98,100 published in the
    Qtr. 3 P&L ?  My guess, probably not.   There are some interesting
    differences with these subsidiaries I'm going to mention one that
    I know:  Example:  You are an employee of Digital Equipment GmbH
    and you want to 'relocate' to the US for a Job Opening listed in
    the US Jobs Book.   You can do this, however, some of the relocation
    benefits (Years of Service in the Company) are NOT trasferable !!!
    Why ?   As I said, you are not really working for DEC.   De facto, is
    as if you are on contract, whenever the contract finish (relocation is
    considered as a termination of the contract with the subsidiary)
    you enter a new business transaction.
    
    	There is another distinction in some 'Tax Heavens'   These
    countries have what is called legally 'fully owned' subsidiary.
    (Examples: Puerto Rico and Ireland - both closed now) both had
    fully owned subsidiaries.   In this event you can relocated the
    years of service are kept (you worked for the same Digital) but
    you have an International Relocation Contract.
    

>>> I wonder if we are reporting these employees under the 98,100 published
>>> in the Qtr. 3 P&L ?  My guess, probably not.
    
The Digital-PCS people have their computers in our worldwide network, and
are wearing (still) Digital badge, but they have been *removed* from ELF.
The answer is, they are not counted as Digital employees. 

Kari

> The Digital-PCS people have their computers in our worldwide network, and
> are wearing (still) Digital badge, but they have been *removed* from ELF.
> The answer is, they are not counted as Digital employees. 
    
    Kari you are wrong.
    
    The removal of Digital-PCS employees from ELF is an administrative
    problem which will be put right by re-entering them in the next few
    days.                                 
    
    Digital-PCS Systemtechnik is a fully owned Digital subsidiary which is
    part of Digital Equipment Corporation's Professional Service
    organisation. Digital-PCS employees are Digital employees. The Digital
    territory manager for Germany, Hans Dirkmann, is also responsible for
    Digital-PCS (through Digital-Kienzle).
    
    Mike

This is old news but it seems that several people I have come in contact with
lately are not aware of the fact that Digital now owns 100% of Digital-Kienzle
compared to the original 65% financial interest it had.
    
Digital fully owns Digital-Kienzle (neglecting any holding companies in between)
which fully owns Digital-PCS. Therefore Digital-PCS employees are also Digital
employees.

    Source of information: VTX IS

     Digital 1992 Annual Report
        Financial Statements
                Note O - Acquisitions

Mike

---------------------

FINANCIAL STATEMENTS

Note O - Acquisitions

  (Information on Philips deleted)

  As of January 1, 1991, the Company's results reflect the full consolidation
  of Digital-Kienzle Computersysteme GmbH & Co. KG, a German entity in which
  Digital acquired a 65% interest from Mannesmann AG for $233,261,000.  The
  acquisition has been accounted for as a purchase. On December 20, 1991, the
  Company acquired the remaining 35% interest in Digital-Kienzle. The
  consolidated results of operations include the full-year operating results
  of Digital-Kienzle for fiscal year 1992, and six-months results for fiscal
  year 1991.

  (Final sentence deleted)

          

    Digital-PCS has got its employees back into ASK which is the Digital
    Germany electronic telephone directory from which they were purged a
    few weeks ago. Personnel and related functions of Digital Equipment
    GmbH had no established procedure to transfer employees from one
    Digital company to another Digital company in Germany and decided to
    follow the procedure they normally use when employees leave the company
    completely. This involved purging them from ASK, which had the knock-on
    effect of purging them from ELF the next time the data-feeder procedure
    ran.
    
    Using the same procedure Digital Equipment GmbH also sent us our
    final monthly pay-slip, tax-card and state-pension certificate via
    registered mail to our home addresses instead of using internal mail
    (which for as long as I can remember has always been considered
    reliable enough for these documents).
    
    We also had a flood of letters from the sickness insurance companies
    because Digital Equipment GmbH had told them we had all ceased
    employment without coordinating with Digital-PCS Computersysteme GmbH
    to make sure that we were re-registered.
    
    In January Digital Equipment GmbH logistics suddenly stopped delivering
    material to us because they thought they needed an export licence for
    us!
    
    Our application to remain on EASYnet and connect our new location is
    suffering delays because we first have to prove that we still belong to
    Digital!
    
    Mike

    Re: .7    Thanks for the clarification, which is the point I brought
              There is a legal distinction between subsidiary (where the
              Multinational owns less than 100% of the subsidiary) and
              fully owned (where the Multinational owns 100%)
    
    	      For SEC purposes, the fully owned has to include those
    	      employees in their Quarterly Statements (P&L and BS), the
              subsidiary can include the employees or can report them
    	      'stand-alone'