Conference 7.286::digital

    The only rumour I heard of was something to the effect of seven weeks'
    pay plus one week per year in company. No "bonuses" for those with over
    15 years' service. But this was only a rumor...

    Hi,
    
    I heard at the beginning of the last round that they were pulling the
    Q1 FY'94 TFSO's into Q4 FY'93 but after all was said and done I never
    heard what head count was after the round. 
    
    FWIW: I've got two thoughts on this:
    
    1) If they did a LARGE count last quarter they will let headcount be
    for at least 6 months.
    
    2) If they did not do a significant # then that is BP's only short term
    route to the black. If by chance we have a + quarter this past Q4, it
    would be disasterous to have a red Q1 - and he'll have to do what he
    can to prevent that. 
    
    Pat

    I expected more lay-offs - didn't you?  And I'm surprised that there is
    going to be any package at all! TFSO has become a way of life with us. 
    At first - some managers used it as a 'threat'.....that doesn't work
    anymore!!  And if this area is any indication of the whole US the
    reason there are going to be more lay-off's is because they keep
    getting rid of the worker bees and saving the middle/upper mgrs
    jobs..ie  we had 6 mgrs...we went down to 4 - but they all needed
    assistants so we went up to 8 (all mgrs level).  Was is surprising that
    two of the mgrs TFSO'd were made assistants - same pay...and the other
    two hired from the ranks were brought in at a lower level.  God did I
    take a bitter pill this morning or what.....better get in a better mood
    or my name will go to the top of the TFSO list!!

    
    The importance of Q1 being in the black cannot be understated.
    

re: .basenote - when, where, what will the next TSFO be...?

 set/mood=semi-joking

  I heard that they were going to start TSFO's with all the notes entries
 that were asking about the next round of TSFO's....


  set/mood=serious

   I'd be more concerned with 
	1) finding ways to earn money for Digital (Profit),
	2) making sure I was keeping up-to-date technically, and last
	3) wondering when the next TSFO would hit.

 we haven't actually made #1 real yet, so we need to stay focused on that
 (I think), balanced with "am I technically up-to-date" (read that: employable
 by another company).

bwe

I just heard a rumor that BP has gotten the okay from the board
to reduce headcount to 69,000. Can anyone confirm this?

    re: 2580.6
    
    See 2558.0, it seems like Palmer himself has moved from Pat Sweeney's
    scenario (1) to scenario (2).

    
    
    	re .4
    
    	So true. And this will be even moreso, since Q1 is historically
    	a very soft quarter for us.
    
    	re .6
    
    	Down to 69K employees? IMO, the only way to do this would be for
    	him to spin off parts of the company. Which may or may not be a
    	bad thing for those employees affected. 
    
    	Has anyone heard what the final tally of TFSO's was after Q4? How
    	many employees do we have remaining?
    
    	I'd like to see another DVN from BP, with a live Q&A session, to
    	let us know how we are doing, where we are headed, etc.
    
    	John
    

    I believe that approval was granted to reduce the number of employees
    by an additional 40,000 without returning to the Board for approval for 
    this reduction. If I'm not mistaken, the maximum number of people that
    can processed by Human Resources is about 7,000 per quarter. So, the
    anxiety should persist for a while.

    Scenarios:
    
    I) High Technology Company Focused on Product Differentiation with
       Chip Technology (Mainly Alpha).
    
       Headcount: 50K to 70K
    
    II) High Technology Company Focused on Product Differentiation with
        a) Chips and PC's.
    
        Headcount: 55K to 75K
    
    III) High Technology Company Focused on Product Differentiation with
         a) Chips, b) PC's and c) Workstations
    
    	 Headcount: 60K to 80K
    
    IV) High Technology Company Focused on Product Differentiation with
        a) Chips, b) PC's, c) Workstations and d) Servers
    
        Headcount: 65K to 85K
    
    		The real question is:  What is the scenario that BP and the
    DEC BOD has approved.   From reading BP's comments, I will guess
    Scenario I or about 50K employees.
    

    My understanding was that Mr. Palmer would not ask the Board (or
    whomever he has to ask this of) for any more than 26 wks total and the
    comment was it would probably be less.  The 26 wks was based on IBM's
    severence package at the time.  That calculation of 1 yr of pay for
    every year of service would then not apply to anyone with more than
    26yrs of service.  Who knows??? 
    
    I too am wondering what our total population is to start FY94.

    Re.11
    
    	Population at the end of Qtr. 4 should be in the low 90's.
    Now, the problem is that there will be sites, functions, that will be
    there to comply with the S.E.C. reporting requirements, which had
    already been publicly announce that they will dissapear during FY'94.
    Example of this is the Galway (GAO) plant which right now is being
    transferred to Ayr (AYO).   However whatever number of people are
    performing the transfer will be there until early Qtr. 2 FY'94, 
    therefore, we will have to report them unitl that time.
    
    	So, the question remains, what is our 'real' manpower number ?
    And, what is the 'real goal' of our top level management ?
    Guess the answers are related to what is the vision of our management ?
    Are we going to continue doing all the products in all the different
    markets that we do or are we going to concentrate in our Competitive
    Advantage Strenghts (Silicone, Services), therefore being a 'different'
    (smaller) company that the one we are today ?
    
    	Time will tell 

    
    What is the headcount in HP these days?  My gut feeling is we should
    be in the same ballpark.
    
    But that's just me.....
    
    -Ed
    

    Maybe someday, someone important will admit/figure out that SELLING
    PRODUCT PROFITABLY is a good way (THE BEST WAY) to stay in the black
    and that hiding poor performance by cutting headcount is not something
    that SMART business folks or stockholders can afford to tolerate for
    long!

    re: .10 |Potential Scenarios|
    
    I disagree somewhat.  Here's why.  At last week's world-wide
    Sales/Marketing management meeting, the FY94 focus was carefully
    spelled out.  The goal of the company is to (1) gain leadership in
    client/server computing, (2) establish AXP in the marketplace, and (3)
    make the numbers.  Part of this program are the 6 product initiatives
    which were fleshed out in a separate meeting running in parallel last
    week by the corporation's "marketing leaders":  including OBJECTworks,
    OpenVMS, UNIX, Workstations, Networking, Services ...
    
    I think that Senario I that you mentioned focuses only on the "chip"
    aspects, but discounts the obvious software initiatives.  Also, the PC
    business is planning on significantly increasing business in FY94 (I
    think by 100%) which would track Scenario II.  The Workstation
    initiative would suggest Scenario III.  The AXP emphasis would suggest
    Scenario IV.
    
    Also, Strecker's reorganization of central s/w engineering two days ago
    appears to be supporting the initiatives and CBU orientation of the
    "new" New Digital.
    
    I suggest there's a Scenario V -- High Technology Company focused on
    Product Differentiation with a) Alpha AXP chips & PCs & Workstations &
    Servers & Systems, b) Intel PCs, c) UNIX & NT, d) Client/Server base
    software technology.  Headcount:  60K to 85K.
    
    Of course, this is open for discussion ....
    
    But this is all speculation and only BP knows.  And he's not telling. 
    Best thing we can all do is focus on and deliver the 3 priorities for
    FY94 outlined above.
    
    Steve

    Regarding the base note about purging T5's, of which I am one...and
    hiring them back as T2's or T3's....I can't imagine a single T5 in his
    right mind doing that. It doesn't even make sense as a rumor ! If I got
    TFSO'd ( Thanks For Shoving Off ), I sure the hell would not be
    inclined to want to come back for less pay.
    
    
    I wish we could avoid base notes with such topics. We must all try to
    work to make Digital successfull and concentrate on positive things.
    
    Only my opinion....

    Another interesting rumor - Information Week, I believe.
    
    Rumor has it that Digital is looking for a buyer of their storage
    products division (disks and etc.), plus possibly the StorageWorks
    stuff.  Digital declined to comment on the rumor.
    
    Somehow doesn't seem all that far-fetched . . .

    
    Re: Base note
    
    My information is that there is to be a re profiling of the skill set.
    It is argued that as hardware becomes less complicated to fix and more
    modular there will be an increasing requirement for T2 & T3 "box
    swoppers".
    
    There will also be a requirement for high level technical expertise in
    the T6 and T7 range for the particularly nasty problems like diagnosing
    Vax7000s crashing due to defective code.
    
    There will not, as I understand it, be a large requirement for those of 
    us in the T4 and T5 range. This structure has been described as an hour
    glass shape where those in the middle are to be squeezed upwards,
    downwards or outwards.
    
    Martin
          

In response to the various previous replies (including one of my own)
about headcounts, here is my guess.

A few years ago, it was widely believed that the revenues/per empl.
ratio to be successful should be 200K. And, I remember, we did 
poorly (behind IBM,HP, Sun, Apple and Compaq). If we go by that
ratio, then Digital should be "rightsized" to ~70K, given that
we have ~14B in revenues.

Jay

    Re. .19
    
    	Excellent guess, also you are right on.   However, the irony to all
    this is that the Revenue Generation, these days, is focused more and
    more to PC's, Workstations and Chips.   We all know that we have to
    deliver 50X more volume to achieve the $14B Revenue with PC's,
    Workstations and Chips, than our more traditional VAX Systems and
    Servers Business of the past.
    
    	So, maybe the ~70K size is "right" from the revenue per employee
    point of view, however the question is:  Is Revenue per Employee (which
    is a strictly Cost Competitive measurement) the right measurement ?
    My answer: NO WAY !!!
    
    	We have decided to compete solely on cost.   There are other ways
    to differentiate your product.   It has been proved time and again by
    many companies (US, Japan, European, etc.) that a single item product
    differentiator will NOT WORK in the Long Term.   Why ?   Because the
    competition will focus on that point and it will no longer be a
    Competitive Advantage, in a rather short period of time.   However, if you
    have several Competitive Advantages(Cost, Delivery, Quality, Resale Value,
    Services, Technology, Total Customer Solutions, etc.) then you will be in 
    a better, long term leadership position.   The real issue here is that 
    whatever Competitive Advantages you have today, they will not be the same 
    ones needed on tomorrow's business scenarios, because Consumer Needs 
    drastically change.    Therefore, you have to be extremly dynamic, more so
    in the High Technology Business that we are in. 

    re: .17 I wouldn't be at all surprised. Our group used to be located at
    SHR (home of storage) and we were basically kicked out to make room for
    the consolidation of all of Charlie Christ's people. This makes sense
    if you're going to sell off a business - first get them all in one
    place, then sell that place/those people. Look for SHR1 & SHR2 along
    with the storage business folks to be sold as a package.
    
    Just my prediction, FWIW.

Re .17

In a Storage Subsystems communication meeting last week, Bob Rennick (Storage
Subsystems Manager) was asked about this rumor. Below is my interpretation
of his response:

If a business is not profitable, no one would want to buy it. If it is
profitable, it doesn't make any sense to sell it. Storage (heads, disks and
tapes, and subsystems) earned a fairly large profit for the corporation this 
year and the future prospects look good, therefore the storage business
is not for sale.

The source of the rumor is that due to the fact that we have become a significant
player in the high capacity/high performance end of the disk drive business,
and since Digital has been experiencing financial difficulties lately, several
companies approached Digital with offers to purchase the disk and tapes business.
Since Digital is a publicly traded company it is required by law to consider
any unsolicited bids for all or part of the company and evaluate whether
accepting the offer is in the best interests of the shareholders. The conclusion
of the negotiations was that it was in the shareholders' best interest to keep
the disk and tape business. As of last week, the negotions had completed except
for wrapping up some legal issues.

(I don't have any other information on this. I apologize to Bob if I
mis-interpreted anything he said. -John)

    re: .22
    
    >If a business is not profitable, no one would want to buy it. If it is
    >profitable, it doesn't make any sense to sell it.
    
    Um ... this isn't a quote, is it?  Businesses are bought and sold all
    the time.  Someone will buy an unprofitable business if they think the 
    owners didn't handle things right and that they can make it profitable.
    And, a company will gladly sell a profitable business if they decide it
    doesn't fit their charter so they can focus on "core competence" or
    meet other management parameters ... or if they figure it will soon
    become unprofitable.
    
    Steve 

                             


        *************************************************************** 
                  A Memo to U.S. Managers from Dick Farrahar
        ***************************************************************


Attached FYI is the text of a message regarding the resumption of the U.S. 
Transition Program through Q1 FY94.  The message will be posted Monday, 
July 19th, 8:30 a.m. on LIVE WIRE.  Please take a minute to read it, so you 
will be able to respond to questions from your employees.  

The U.S. Transition Program will continue to be implemented and managed 
business unit by business unit.  The plans will be reviewed on a 
business-by-business basis by the Cross Organization Committee to ensure a 
continued thoughtful and thorough process.  

Any questions regarding this material may be directed to the U.S. 
Transition Program Office at DTN 223-3933.




                    Resumption of U.S. Transition Program

      ******************************************************************
                   A Message to employees from Dick Farrahar
      ******************************************************************

In keeping with our normal business practice,  the U.S. Transition Program 
was reviewed at the conclusion of Q4.  Following that review, a new 
Transition program will commence on July 19, 1993.  At the end of Q1, the 
program will be thoroughly reviewed in the context of Digital's business 
goals and the worldwide restructuring and reengineering effort.  Based on 
that assessment, a decision will be made regarding the program in Q2.

The financial support package previously offered to U.S. employees selected 
for transition has been reviewed and revised.  The package that will be 
offered during Q1 includes reduced cash payments, but still compares 
favorably with separation plans offered by other companies in our industry.  
The revision reflects current business conditions, the company's current 
financial performance, and our intent to manage transition activity within 
the limits of existing restructuring funds. 

The elements of the package include four weeks of continuous pay, plus a 
lump sum payment based on years of service; continuation of medical, dental 
and life insurance coverage for a period represented by the total payments; 
formal outplacement assistance; and where applicable, a five-year 
acceleration of restricted stock options.

The total payments will continue to be as follows:

0 - 15 years of service      	        Four weeks of continuous pay, 
                                            plus a lump sum payment of one 
                                            week of pay for every year of 
                                            service up to fifteen years,
    	      	   	     	       	    minimum of four weeks lump sum.
    	      	   	     	       	    (i.e. 4 week lump sum payment 
    	      	   	     	       	     for employees with 0 - 4 years 
    	      	   	     	       	     of service)

16 or more years of service  	        Four weeks of continuous pay, 
                                            plus a lump sum of 15 weeks of 
                                            pay, plus two weeks of pay for 
                                            every year of service between 
                                            16 and 32 years of service, up 
                                            to a maximum of 52 weeks. 

The U.S. Transition Program will continue to be implemented and managed 
business unit by business unit.  The plans will be reviewed on a business 
by business basis by the Cross-Organization Committee.  The company must 
continue to move expeditiously to restructure and transform itself; 
however, there is an equal need to continue to proceed in as careful and 
caring a manner as possible, as Digital defines the resources required to 
meet current and future business needs.  



To Distribution List:

    
    
    >  IF a business is not profitable, no one would want to buy it.
    >  IF it is profitable,  it doesn't make any sense to sell it...
    
      One only has to look back to the sale of GSO  to see that
    this isn't always the case...
    
      But I'm glad we're aparantly not selling the storage business!
    
    
    						al

	Drive engineering has been told that there were seven different
organizations interested in buying parts of storage.  Those parts were disks,
tapes and heads - controllers/subsystems was not on the block.

	Charlie Christ repeated those words today, adding that of the seven,
six were already out of the running and that the seventh was expected to drop
out very soon.  

	We were also told that Digital didn't go looking for buyers, but that
management had a fiduciary obligation to investigate those offers once they
were made.

    I like to keep my head down and do my job.  I like to stay focused.
    There is always a lot of crap flying about and I've always found it
    easiest to just ignore what I can and execute the rest as quickly and
    well as I can.  Internal redefinitions, like justifying which CBU my
    global account belongs in....things like that... I try to just duck and
    keep selling....keeps me happy.
    
    Now, though, I'm failing.  I can't keep the crap out of my face.  This
    new engine, this new vehicle that digital designed for FY94; CBUs,
    MRCs, varible comp plans, TSFO Jr., it's all starting to blind me.
    
    I mean, it's July 16th and I have no idea who is driving this new
    engine and there don't seem to be any tracks for it.  Don't you lay the
    track before you run the train?    Sheesh.    And now TSFO Jr.  I'll
    tell ya, very few people can concentrate.  We're all burned out with
    it.  I fear nothing will get done until someone decides to give people
    a chance to focus.  "No layoffs for six months".
    
    4 weeks.  Sheesh.  

    re. -.1
    amen brother. amen.

    The figures quoted in here as current headcount; do these include
    contractors?  I've heard though not confirmed, that in some
    countries, contractors *are* included.
    
    Also, any idea of the percentage of contractor to permanent 
    population?
    
    joyce
    

Resumption of U.S. Transition Program (19-Jul)  m            Date: 19-Jul-1993
   
        (Following is the text of a memo from Dick Farrahar, vice president, 
   Personnel, regarding the U.S. Transition Program in Q1.)
   
        In keeping with our normal business practice, the U.S. Transition 
   Program was reviewed at the conclusion of Q4. Following that review, a 
   new Transition program will commence on July 19, 1993. At the end of Q1, 
   the program will be thoroughly reviewed in the context of Digital's 
   business goals and the worldwide restructuring and reengineering effort.  
   Based on that assessment, a decision will be made regarding the program 
   in Q2.
        The financial support package previously offered to U.S. employees 
   selected for transition has been reviewed and revised. The package that 
   will be offered during Q1 includes reduced cash payments, but still 
   compares favorably with separation plans offered by other companies in 
   our industry. The revision reflects current business conditions, the 
   company's current financial performance, and our intent to manage 
   transition activity within the limits of existing restructuring funds. 
        The elements of the package include four weeks of continuous pay, 
   plus a lump sum payment based on years of service; continuation of 
   medical, dental and life insurance coverage for a period represented by 
   the total payments; formal outplacement assistance; and where applicable, 
   a five-year acceleration of restricted stock options.
        The total payments will continue to be as follows:
   
   0-15 years of service             Four weeks of continuous pay, 
                                        plus a lump sum payment of one 
                                        week of pay for every year of 
                                        service up to 15 years,
                                        minimum of four weeks' lump sum
                                        (i.e., 4-week lump sum payment 
                                        for employees with 0-4 years 
                                        of service).

   16 or more years of service       Four weeks of continuous pay, 
                                        plus a lump sum of 15 weeks of 
                                        pay, plus two weeks of pay for 
                                        every year of service between 
                                        16 and 32 years of service, up 
                                        to a maximum of 52 weeks. 
   
        The U.S. Transition Program will continue to be implemented and 
   managed business unit by business unit.  The plans will be reviewed on a 
   business-by-business basis by the Cross-Organization Committee.  The 
   company must continue to move expeditiously to restructure and transform 
   itself; however, there is an equal need to continue to proceed in as 
   careful and caring a manner as possible, as Digital defines the resources 
   required to meet current and future business needs.  

Re .28

Mark,

Relax cuz.  Russ G. said in the DVN last week that he was planning
no more cuts in the US Field organization.  

The only conditions were that he was counting on some "normal" attrition
and that we had to perform according to the plan.

Its only a slight detail that none of us grunts know what the "plan" is.

Did it ever get this bad at GBC?

    heh heh. Russ G. probably means it too!  QUestion is, can Russ prevent
    it?
    
    I'm expecting things to change continuously.  From top to bottom.
    
    

    Re: .30
    
    		That is an excellent question.
    
    		Here's how I've seen it published
    
    
    		DEC Permanent Manpower .................XXXX
    		LOA ....................................  XX
    		Contract/Temporary ..................... XXX
                                                        -----
                Total Population ...................... X,XXX
                                                       =======
    
    	Now, the real question is still do the 90++++ that we will
    publish for Qtr. 4 contains Contract/Temporary employees.
    I really don't know.   Does someone from Finance or Human Resources
    knows the answer to this ?
    

    re: .33
    
    |Relax cuz.  Russ G. said in the DVN last week that he was planning no
    |more cuts in the US Field organization.  
    
    It was my understanding that Russ specified "SALES", not "the US Field
    organization" ... world of difference.

    Someone explain this to me: If the company is doing better and things
    are looking up why does the current state of the company mean we have
    to reduce the TFSO package yet again? It seems to me that if we were in
    better economic shape then we were 6 months ago the package would not
    have to be reduced.
    
    			Alfred

    re: .37
    
    >Someone explain this to me: If the company is doing better and things
    >are looking up why does the current state of the company mean we have
    >to reduce the TFSO package yet again? It seems to me that if we were in
    >better economic shape then we were 6 months ago the package would not
    >have to be reduced.
    
    I know, I know!  Alfred!  You didn't read the first line of the "we're
    going to keep laying people off" memo!  It starts off with:
    
    "In keeping with our normal business practice, ..."
    
    You see, our current prosperity is *because* we are laying people off. 
    BECAUSE we are doing better it is PROOF that laying people off is good
    for the company!  There is an obvious correlation, so if we want to do
    even better, we need to lay off even more people.  
    
    Of course, if we had done even worse that would have been PROOF that we 
    need to lay off EVEN MORE.  If we had done only slightly better, that
    would be proof that we weren't laying off enough!
    
    So, what would it take to prove that we shouldn't lay people off? 
    Basically, we would have to show that our performance neither improved
    nor regressed no matter how many folks were laid off.  Of course, that
    would have required NO CHANGE over several quarters to counter the
    existing PROOF that we have accumulated over the last few years.  That
    is, during the last few years we have had both terrible and "doing
    better" quarters when we've had layoffs, all of which serves as PROOF
    that laying off people is good for the company.
    
    Layoffs are becoming a "commodity" item for us, thence costs will
    naturally be reduced.
    
    :^(
    
    Steve

    Has anyone seem the year end results?  I know that in the logistics the
    parts went from being a expense to an asset - they were hoping for a
    one time increase of $69M but only ended up with about $23M.
    
    re:37 do you really think the company is doing better?  
    

Re: Layoff are our best product

This is one area that management (whoever that is) has identified
and focused on as profitable. I might also add that this is probably
one of the very few where we have focus (the only one?). At any rate
when a 'customer' is visited they're sure to 'buy'. Thus in this
market management has an almost perfect record of 'sales' success.
Maybe we could package the whole process and sell it as a service.
I don't think there are any other companies in the layoff business. 

>    Has anyone seem the year end results?  I know that in the logistics the
>>   parts went from being a expense to an asset - they were hoping for a
>>   one time increase of $69M but only ended up with about $23M.
    
>    re:37 do you really think the company is doing better?  
    
    
    Can you explain how this was accomplished?
    
    

>>I know that in the logistics the
>>parts went from being a expense to an asset - they were hoping for a
>>one time increase of $69M but only ended up with about $23M.
Interesting. So it looks like accounting smoke & mirrors. Will this
sort of thing pass muster with industry analysts?
    
>>do you really think the company is doing better?
upper management does...I believe there is a note in this conference
saying so  
    

    >    re:37 do you really think the company is doing better?  

    I though I was clear that the idea of reducing TFSO was an indication
    to me that the company was doing worse. However, all the pronouncements
    from upper management, see Gullotti in latest LIVEWIRE "[Digital has]
    made significant progress", are that things are better and getting
    better. Frankly I don't know what to think.

    			Alfred

    I think the idea is to carry out FY94 TFSO programs without incurring
    further restructuring charges -- hence slimmer packages.
    
    Q4 financial results will be announced the morning of July 28.
    
    Mac

    Has there ever been a quarter where management said we were doing
    worse?  I can't recall ever seeing one.
    
    Steve

    Re. Last Few.
    
    	It seems that is the logic - reduce employees = increase revenue
    (not only us, if you read the business press these days, Apple is 
    laying-off, IBM, idem, Dell, same, to mention some).   In today's USA Today
    newspaper, there is an article on Section B that reads, 'Investors keep 
    pressure on Tech. Stocks'.  Basically it shows that almost across the 
    whole industry - PC's,Semiconductors, Software and Hardware Vendors - 
    the stock price has drop from as low as 7% to as high as 68%.   
    	Therefore, top management, in trying to atract investors back to
    Tech Stocks has decided to lay-off as many as possible.   Once again,
    ONLY focusing on short term profits (quarter to quarter).    Also,
    it seems that each one is following the other's steps regarding the
    amount of 'Financial Incentive' offered to 'targeted employees'.
    	The investors have said that the market has too many vendors and
    therefore, some will perish as the cost/performance war continues.
    We can only assume that all the industry will continue 'decreasing its
    costs' where they can get their biggest bang for the buck.   Right now
    there is only one expense item where this can be done.   Sadly to say
    that it is us (manpower).   Time will tell if these companies have done
    the 'right thing' or not.
    	Del Jones, who wrote the USA Today article finished it with this
    phrase:
    
    	' There are hundreds of computer companies.  Those that adapt will
          thrive.  But it will be painful.'
    
    	I guess that when he says 'those that adapt', he is really trying
    to say those that lay-off as many as possible, will survive.
                            

    re: .46
    
    Actually, I agree.  
    
    It feels (short-term) good to gripe about things at Digital because I want 
    and expect Digital to be much better than the competition.  But, I understand 
    how other companies are going through the same turmoil and possibly making 
    the same decisions and mistakes.  What I wish is that Digital's management 
    would make the decisions necessary to allow and encourage Digital to be 
    phenomenally successful and not just use "best in class" comparisons to 
    prove they are making decisions that are no worse than those being made at 
    other companies.  No, I don't know what those decisions are.  But, like many, 
    I sense that some current decisions just don't seem right, let alone
    profitable.
    
    I find it curious that when successful companies have failures, they
    reduce organizations and retrain their workers to operate in successful 
    organizations.  This is how it was explained to me by folks at HP.
    (This is also a sign to me of accountable management.)  But, at Digital 
    (and elsewhere, but not at HP) the practice has become to reduce the 
    organizations as a way to justify elimination of workers.  The usual 
    justification includes that only the profitable companies can afford to
    retrain their workers.  But, I can't help but feel that the focus on
    retraining is what helps other companies to be profitable.  
    
    This is a symptom of a larger problem, I think.  The profitable 
    companies already understand where they are profitable and where to 
    invest their resources.  It has been painful to watch Digital thrash 
    as it lays off without understanding where and how to focus efforts 
    and resources to become profitable.
    
    Steve

>>But, like many, I sense that some current decisions just don't seem right,
>>let alone profitable.
exactly!
    
>>It has been painful to watch Digital thrash 
>>as it lays off without understanding where and how to focus efforts 
>>and resources to become profitable.
I disagree...I think that they have a very focused short term effort
to become profitable. That is to dump their work force a by product
of which is to trim the product line. This has been DECs most profitable
short term venture so far. It remains to be seen what might follow on
as a long term strategy though.

    Re. .47 & .48
    
    	I think you two folks are trying to convey the same message
    differently.   I don't think you are in disagreement at all.
    
    Most companies, under the pressure to produce revenue for our most
    important investors (namely the stockowners), resort to the only 
    quick fix avenue they know off:lay-offs.   There are other things that 
    can be done: re-train, diversify your business, spun-off parts of your 
    business, among others.   However, it is quicker and has faster results,
    specially in the bottom line where Wall Street and the Investment
    community is watching, to lay-off employees.   Also, I'm almost
    convinced that laying-off has become the 'latest fad' in the business
    world.   It seems that if you are not laying off employees, you are not 
    showing your commitment to the investment community (stockholders).   
    I've read an article on the US New and World Report Magazine, where the 
    author was discussing the probability of such a fad occurring in the US, 
    Europe and Japan caused by the current recesion in the economy.
    The authors was saying that in the 80's, the companies were under the
    bigger is better logo, now in the 90's it seems as if they are going
    the other way around, small is beautiful.
     

        .-1

    i think you can be big and small at the same time, what you do
    is break your big company into small independent divisions, and
    let them work sort of independent, they did this in GM , where they
    have the oldsmobil/cadilac division, and they have the one for
    trucks and bus, and one for buick etc.. (may be i got the cars
    wrong) but the point is, you can be both big and small and still
    be beautiful, you just need to be innovative about it and break
    the old mold of doing things.

    my motto is , if you aint broke , don't fix it.

    \nasser

    i don't think this latest round of axing that began yesterday has much
    to do about Q4 results. but it may have a lot to do with expected Q1
    results. just MHO.

    Expense --> Asset...I'm not sure how it works.  I understand that other
    companies have always considered there "parts" as an asset - which I
    believe them to be.  On July 6th, all the logistics parts turned over -
    a one time shot - to an asset.  Apparently, this can be done - legally!
    Our whole way of handling parts had to change along with this.  There
    was a mandatory push to make sure this happen so it could be counted
    for the year end results..."to help the budget"...I can't think of any
    other reason to rush it...
    
    

Perhaps the logistics parts just became part of Inventory?  Where 
restockings done with expense money, and have you changed the reporting for 
future purchases?  Counting the stock in inventory seems like an honest 
thing to do, and then focusing on managing the A inventory could help 
manage the costs of inventory better over time.

Matt

        re: .49

    JMORALES with yet another slam against Wall Street.

    Wall Street didn't tell Ken Olsen to destroy 85% of shareholder value
    of Digital Equipment Corporation.  Robert Palmer isn't being dictated
    to by Wall Street to transform a full-line/full-service IBM-wanna be
    into a combo Intel-wanna be, Compaq-wanna be, and EDS-wanna be.

    If you're not protected by being part of an entrenched manager class or
    if you're not in the profile of an Intel- Compaq- or EDS- employee,
    then your part of the Digital that's discardable.

    Digital doesn't have a unique and coherent mission.  It has a structure
    that's trying to reflect other successful businesses.

Re: .49 .54

Not so much a slam at Wall Street and the investment community as a jibe at
pusillanimous corporate executives hell-bent on placating what they believe
is the quick-buck perversity of the Wall Street crowd.  Playing to the
crowd is just good show biz.
[stage direction]  a slow transition from blue to burgundy lights.

    
    We are hearing (and have been for a gew years) that it's an "industry
    trend", "It's the industry", "it's happening to other computer
    vendors", etc, etc for a long time now.  This type of talk scares me
    because it seems that we are looking for excuses rather than trying to
    fix the problems.  Truth is that Digital is one of a few in the industry
    who have been on such a long decline and we need to take action to fix
    the problems rather than blaming it on the economy, the industry, I
    tripped on a pebble or any other lame excuse and laying of employees
    over a prolonged period of time is not the way to fix the problem
    (IMHO).  If we need to cut, so be it....DO IT AND GET IT OVER AND DONE
    WITH!!!!  This way the remaining employees won't be looking over their
    shoulders all the time and can concentrate on the business at hand. 
    Also we have heard much about how we would be able to cut the workforce
    because we were going to become more efficient and get better tools. 
    Where I am, we are still awaiting these changes.
    
    
    Mike

    re:-1
    
    Amen

    
    re. inventory & asset.
    
    	Perhaps Pat Sweeney can correct a possible "theory" to move parts
    from liabilities to assets. I think inventory is classified by FASB
    as a liability, whereas "work in progress/process" may be an asset.
    Could this be the way that a liability can become an asset?
    
    	just a guess,
    		fred deady
    	 

Re 2580.58   

Fred,  inventory includes, parts, finished products, raw material and WIP 
(work in progress) and is a current asset in the Balance Sheet.

Inventory is normally valued at the lower of cost or market value.

In Digital, CS material was mostly written off as an expense under the
accounting practice we used.  By making an accounting (policy) change, the
company can make a one-time gain by capitalizing the inventory, thus reducing
the expenses and increasing the assets shown in the Balance Sheet.  

Shalom
Baruch

    Changing the accounting practice like this can be a two edged sword
    (actually three edged, as you'll see!).
    
    Good that we reduce the expense.
    
    Good that we increase the asset value, making us less vulnerable to a
    takeover attempt.
    
    Bad, because a key measure of the investment analysts is Return on Net
    Assets and we've just increased our net asset value.

    
    I thought the plan 6 months ago was to *reduce* assets by $1 billion.
    Does anybody have a program card for this nonsense?  I'm lost.
    
    

    re: .55:
    
    Someone quoted IBM, Apple, Dell, etc as others experiencing similar
    problems as Digital.  Compaq, HP, Intel as well as others are still
    profitable during these same "difficult" times.
    
    Mark.

    Regarding the "assetization" of spares in the field, my understanding
    is that it will have zero impact on the audited financials because the
    spares inventory has _always_ been carried on the external books as
    an inventory asset consistent with FASB requirements.  
    
    Prior to FY94, Digital expensed spares for management
    reporting (internal reporting) when the spares were shipped to the
    field geography.  Go figure.  It was probably easier, but resulted in a
    mismatch of revenue and expense on the internal books and could be
    manipulated to skew performance metrics by cutting off shipments at the
    end of the quarter.    
    
    In FY94, the inventory asset of spares will be expensed _when consumed_
    at a customer site.
    
    Back to the topic.
    
    Carter
    
    

    Re: .55
    
    >>>> Not so much a slam at Wall Street and the investment community
         as a jibe at pusillanimous corporate executives hell-bent
         on placating what they believe is the quick-buck perversity
         of the Wall Street crowd.   Playing to the crows is just good
         show biz.
    
    
    	 You've got that right.   And Re. 54 If you thing I'm wrong, then
         go ask Ken Olsen why he is not CEO anymore, he did not what
     	 to play the 'Wall Street and Investment Community' short time,
         revenue oriented 'show biz' game.   The ones (CEO's) that are not
         willing to play their game, almost always get axed.

    Ken Olsen's opinion on why Ken Olsen is no longer CEO of Digital is
    interesting but irrelevant.

    Ken Olsen was CEO when Digital's shareholders saw 85% of their market
    value go up in smoke.  How a company can go from 200 to 30 points,
    losing billions and billions of dollars along the way and then turn
    around and then blame "Wall Street" is just ludicrous.
    
    The world changed and Digital didn't.

    Re .-1
    
    Exactly. What Ken Olsen was responsible for building Ken Olsen was
    responsible for destroying. He was responsible for destroying 85% of
    what he built. The latest team aren't doing much better. Of the 85%
    that was lost under Ken Olsen's reign only about 10% of that has been
    rebuilt. Still a long way to go.
    
    It is absolutely pointless trying to blame Wall Street or anybody else.
    The responsibility for the current state of the company rests in one
    place and one place only and that is in the CEO and the management
    chain on downwards. The board did their job and fired the guy that
    was responsible for letting 85% of the value of the company go up in
    smoke. Let's hope the current CEO is doing a better job. Only time will
    tell.
    
    Dave

re Note 2580.65 by SDSVAX::SWEENEY:

>     How a company can go from 200 to 30 points,
>     losing billions and billions of dollars along the way and then turn
>     around and then blame "Wall Street" is just ludicrous.
  
        Uhh -- excuse me.  Perhaps I'm dense, but isn't the "from
        200 to 30 points" something that happened on "Wall Street"?

        Now I admit that it takes "two to tango" -- isn't "Wall
        Street" one of the two partners in the stock price drop?

        (Actually, aren't BOTH of the partners in the stock price
        drop on "Wall Street"?)

        Bob

    Re .-1
    
    The term "Wall Street" is usually used as a perjorative tewrm meaning
    "those nasty yuppies who work on Wall Street". Sure DEC stock is traded
    on Wall Street. But the reason it went to $30 a share is because nobody
    wanted to pay more for it. If there were lots of people who still
    thought the stock was worth $200 a share it would be at $200 a share.
    
    If you personally believe that Wall Street is wrong and that the stock
    is worth $200 a share I have a great deal for you. For $100 per share
    I'll sell you as many DEC shares as you want. Bet you don't take me up
    on it. See, you don't believe the stock is worth $100 per share either.
    
    The price of DEc stock is set by what a willing buyer will pay a
    willing seller, not by thise "bad" people on "Wall Street".
    
    Dave

To single out one individual (CEO or otherwise) as the cause for Digital's
misfortune and attendant loss in shareholder equity, is just as ludicrous
as blaming the Wall Street community.  Digital was never really a "darling"
stock of investors because it would never allow dividends.  Perhaps Olsen
was responsible for that.  In any event Wall Street begrudged him for it.
Digital was successful for twenty years despite this disdain.  During this
time we got fat, complacent and bloated.  Management was what really became
unmanageable.  Like a Frankenstein's monster the creator lost control.
One after another bad decisions, misplaced emphasis, missed opportunities
plagued us forcing us to seek quick fixes; fads, gimmicks, and reorgs
which was believed would fool the marketplace, both customers and invest-
ers alike.  Well we haven't fooled anyone.  

 

    
    Re: .69
    
    What you say is correct, but the buck stops at the CEOs office.
    It is the CEOs job to provide the leadership that fixes the ills
    you describe.  If BP doesn't, then he'll go the way that KO did. 
    You can't hold all of management as the DRI.  Nothing will get
    fixed if you do.
    
    Steve
    

    Digital began it's slide when it went public and became beholden to the
    whims of analysis(sp?) on wall street.....don't think they make a
    difference, let some respected wall street analysis say your not going
    to do well for the next two quarters and see how fast the stock drops
    as investors unload....let them say your going to do better than
    expected and watch how fast the stock rises....this has been going on
    for years and it's why America is perceived as making money by moving
    paper as opposed to making money by making goods.....
    
    IMHO

    IMHO....
    
    Wall Street and Stockholders have to much power..!
    
    I understand, you got the money, you call the shots.. BUT, in my mind,
    this is still wrong..!
    
    If they want to invest, invest.... If they don't, don't... BUT I can
    not see how they (wall streeters) have the right to dictate how a
    company operates.... IF that company sees that investers aren't
    investing in their company, the company could choose to fix potential
    problems (or not).... If they go out of business as a result of doing
    the wrong things..., so be it..! 
    
    Wall street/investors should not be the reason (at least sole reason)
    for making business decisions..
    
    My opinion!
    
    Bob G.
    

>    Wall street/investors should not be the reason (at least sole reason)
>    for making business decisions..
    
    First, those "investors" are the owners of the company.  They have
    the ultimate responsibility for how the company is run.  A Board that
    ignores the investors will be replaced by one that does not.
    
    Second, those who decry the "short term" mentality of American companies
    have a right to complain, but are complaining to the wrong party.
    How in America can a company take a "long term" view when Congress
    changes tax laws every year, at least one environment law every year,
    plus dozens of other attempts at Social Engineering; each of which has
    a nontrivial impact on how this company operates.  It is IMPOSSIBLE to
    form a rational long-term plan when the rules are changed so frequently.
    A "short-term" orientation is forced upon the market by the lawmakers.
    
      John

    
    Re: .73
    
    > A "short-term" orientation is forced upon the market by the lawmakers.
    
    It's reasonable to say that the problem can't be solved without
    addressing this, but to ascribe the whole problem to it is going
    too far. 
    
    Steve
    
    

    Don't forget that we had a pretty dramatic stock market crash during
    the $200 -------> $30 slide.  It's just that other stocks recovered. 
    Digital, on the other hand, continued to slide.  You can blame *that*
    on KO, etc.
    
    Chet

    Could we get back to the subject in the title please?

    > You can blame *that* on KO
    
    the biggest fault KO had was the same problem President Kennedy ran
    into with the "Bay of Pigs" fiasco...
    
    the same problem President Johnson ran into with the Vietnam war
    fiasco...
    
    they all had people in place "whom they did not put there" who were
    "expert advisors" on their given area. Their advice was less than
    expert as it turned out and lead to disaters....
    
    what you can blame each for is being too willing to trust the judgement
    of others of whom they had no first hand knowledge, this has brought
    many a good "CEO/president/individual/etc." down. It will always
    exist as organizations are so large and political there is no solution
    
    just pray you'll never be in those shoes because when you are it's
    only a matter of time before you'll be the one outside looking in...
    

    Wall Street (bad guys) == Shareholders (good guys)
    
    I think we're being a bit unfair to management and a bit untruthful to
    ourselves when we rag management for catering too much to Wall Street
    and at the same time rag management for responding too little to
    the desires of Shareholders.
    
    I suspect that the real issue involves long-term planning versus
    short-term planning.  We tend to think of Wall Street as being
    short-term and Shareholders as being long-term.  I think that's a bit
    inaccurate.  And, I think the real issue is whether or not management 
    is making the right decisions with respect to short-term and long-term 
    good of the company.
    
    Many folks seem to feel that Digital is focusing so much on short-term
    solutions that long-term mistakes are being made.  If true, the
    long-term condition of the company will be so bad that even drastic 
    short-term solutions will cease to help.  I don't think we've reached
    that point yet because layoffs still seem to improve the bottom line.
    
    Steve

    Re. Last Few.
    
    		The issue is that no single party can be blamed for a
    large problem.   There is a 'shared responsibility' of the problem
    at hand:
    
    		1) Management Precatices 
    		2) Short Term Mentality of Wall Street and Investors
    		3) Goverment
                4) Economic Conditions
    		5) Product/Services offered by the company
    		6) Customer Preferences
    		7) Others
    
    	When you add all these factors together and specifically if you do
    not have a competitive advantage on at least 50% of them, then you are
    destined to failure.    That is what has happened, not only to us, but
    also to others, like: IBM, Dell, Apple, etc.    
    	Someone, mentioned earlier that other companies (H/P, etc.) are
    doing well.   That is because they have (had) a competitive advantage
    (given that we offer a differentiated product) over those that are
    not doing so well.    
    	I think we are all in agreement that no single entity has 100% of
    the responsibility, we can not solely blame it on: Wall Street, the
    economy, management, etc.   However it is the wrong combination of
    these ingredients that spoils the brooth.
    		

    re .79
    
      Maybe I missed it but I didn't see where "Employees" fit into you
    listing of ingredients.
    
      As bad as "management" was it should be clear to anyone who's been
    around since say 1980 (Like me!) that many employees took tremendous
    liberties with company resources and lenient attitude toward start/end
    times, basket vacations, ...
    
      Couple all the things listed in .79 and add employee waste and a lack
    of effort and willingness to blow the whistle and you get what we are
    right now.
    
    Marv
    
    
      

    > employees took tremendous liberties with company resources and
    lenient attitude toward start/end times, basket vacations, ...
    
    that IS a management problem....

re: .69

>To single out one individual (CEO or otherwise) as the cause for Digital's
>misfortune and attendant loss in shareholder equity, is just as ludicrous
>as blaming the Wall Street community.

     I completely agree. Unchecked and ongoing however, it was the duty
     of the BoD to fix the blame and act accordingly.
 
>Digital was never really a "darling" stock of investors because it would 
>never allow dividends.

     Uhh - not quite. Many companies require massive reinvestment of profits
     for R&D to continue growth. That's fact. Some investment funds only
     buy dividend paying stocks. That's fact. Some individual investors only
     buy dividend paying stocks. That's fact. Some of each of these folks
     complained often about Digital and other non-dividend companies.

     Because Digital Equipment Corporation is regarded as a volatile stock
     (moves more than the market up and down) it became a candidate for
     the Options market. By selling options on owned stock (Puts and/or
     calls) stock owners, funds/individuals, could realize a form of
     income as a replacement for dividends. They still do.

     A company in Digital's position paying dividends can only be compared
     the U.S. Government policy of buying support from third world dictators
     via foreign aid cash handouts. Not sensible and it doesn't work.

>Perhaps Olsen was responsible for that.

     Nope. Just a fact of business.

>In any event Wall Street begrudged him for it.

     Except for the specific investors mentioned above, I'm unaware of any
     begrudging attitude by 'Wall Street.'

   ---- End of re: -69 ----

     Overall observation on many of the previous replies:

     After math and science, economics must be the most under represented
     subject in school (well, maybe tact in English composition is close :-))
    
     The Wall Street Journal, Nightly Business Report or Wall Street Week
     all have something to sell - and it isn't Digital or any other company.
     Just because someone writes a comment in "Heard on the Street" and the
     stock price reacts, doesn't imply 'control.' Foolish people often do
     foolish things. An efficient market reacts over time to correct 
     foolishness. The securities industry in the U.S. is an efficient
     market.


John B.

    re: .82 I've had enough.  Will writers here please identify who they
    mean by "Wall Street" before they write here?
    
    We all laughed when, as Digital had two consecutive losses, Ken Olsen
    said that when the company returns to profitability it would consider
    declaring dividends.  Dividends, of course, require profit.
    
    A profitable company accumulates _cash_ and the _cash_ gets returned to
    the owners by dividends or retained earnings.  The accumlated capital
    is reflected in the stock price, as long as the company doesn't get
    stupid and lose it all.  So investors look for profits and cash, not
    necessarily dividends. 
    
    Digital in so many respects was such a cash-rich company that its net
    interest earnings exceed operating earnings in several quarters.
    
    Massive investments in R&D are not required for growth.  Let's look at
    what Compaq and Apple spent on R&D and what was the result.  Small
    companies are the source of much of the innovation in the industry now.
    
    Look at the Annual Report.  The big number is called "Stockholders
    Equity".  That's who owns it, it's not the "management discretionary
    fund".
    
    As for your political comment, it's best to say that I found it
    incomprehensible.
                                                 

    
    re: .83
    
    Gee, Mr. Sweeny sorry if I didn't get across to you. In fact your
    comments herein have been some of the few I thought were accurate.
    
    My own reference to 'Wall Street' includes the three groups I mentioned
    in .82 plus one more. That is: Institutional investors, Individual
    investors, Commentators/Reporters and the Securities handlers.
    
    My "...political comment..." was nothing more or less than a reference
    to the fact that most folks education and perception of 'Wall Street'
    is based on studies of television (Dallas) or the movies (Wall Street).
    Of the four groups I mentioned the public statements of
    Commentators/Reporters or Securities handlers can be discounted as
    mostly selfserving rhetoric. 
    
    The folks who really put up the money are best heard by looking at
    prices - that's their real voice. Although short term anomalies do
    occur, the longer term price of a security reflects it's real value.
    
    When folks argue about management serving or being driven by 'Wall
    Street' I get lost in the discussion because I can only imagine 'Wall
    Street' in that context as the stockholders. Any management team that
    tried to cater to the press or the brokerage houses wouldn't last long.
    
    In rereading my .82 and your .83 I think we both erred in stating some
    generalities about dividends and then referred directly to Digital in
    the same context. The fiscal position of a company and it's direction
    at any given time has more to do with dividends than any general rule.
    The history of a number of companies in a single industry over time may
    produce the appearance of a rule but of course, that isn't what drives
    the issue.
    
    The large bankrole Digital developed to yield such good returns did not
    happen over 20 years. It was the direct and concerted effort of Jim
    Osterhoff and his vision of what was necessary to ride out the future
    he envisioned. Prior to that singular effort of accumulation, Digital
    pursued a course of plowing it's profits back into the company in many
    areas, including heavy R&D funding. We also concentrated on minimizing
    debt load at the expense of dividends.
    
    In spite of the numerous comments found in this and the Investing
    notesfile, there is little to offer in the way of fact that Digital's
    not paying dividends ever affected more than a few potential investors.
    
    I certainly agree that any company not making a profit would not pay
    dividends. I also believe a company making a profit can have many good
    reasons for not paying dividends.
    
    John B. 

    John, there's no need for a tone of hostility.
    
    I really don't understand why there's a need to repeat the caricatures
    of corporations based on movies and television.  Let's talk about the
    reality of financial journalism and the reality of investment banks is
    that they exist in an environment that demands integrity as well as
    profit.  They are our customers and it's a display of ignornant
    prejudice to shift any blame onto them.
    
    How can I say it any clearer: dividends come from profits.  If there
    are profits then they belong to the shareholders and not to management.
    
    Jim Osterhoff was Vice President of Finance for a few years in the
    80's.  Digital's profitability then was tied to the nature of the
    computing industry and the acceptance, however, reluctant, of
    proprietary systems.  As such, the margins charged for such systems
    could make the company profitable even at $90,000 revenue per employee.
    No mere Vice President of Finance could get back a 17% gross margin.
    
    Dividends are a distraction.  The real issue is understanding that
    Digital alone is responsible for the mess that Digital is currently in.
                                                                        

    Pat,
    
    We appear to be in agreement, except that I've not said or implied
    anything 'hostile' - or at least that wasn't my intention. I really
    do agree with what you are saying. 
    
    I mentioned T.V. and movies in reference to those folks who continue to
    paint 'Wall Street' (whatever they mean by that) as some concerted
    force pressuring the company to do the wrong thing short term.
    
    My original entry here was in reference to comments that included the
    phrase 'We were never the darling of Wall Street.' That was amplified
    by the comment that not paying dividends was the cause. I disagree not
    only with those statements but, the thinking behind them.
    
    It was to those ends I was, and continue to reply. Certainly not
    hostile, just frustrated by the lack of attention I can pay to my
    replies that, apparently, is causing the tone and content to be
    confused.
    
    Simply - I don't believe attacking a strawman 'Wall Street' serves any
    purpose. Secondly, I believe the issue of dividends (past and present)
    is overblown. Lastly, a return to profitability on a sustained basis is
    the only real 'cure' for our current situation.
    
    The 'blame' if it needs to be placed at all, rests right here, within
    the company. So does the means to achieve the solution.
    
    Sorry for any other interpretation.
    
    John B.

    John & Pat.
    
    		I truly think we are all in agreement.   Pat's last
    sentence in the .85 is excellent, I can not agree more.   DEC has put
    itself in the problem that is now.    However, as I mentioned earlier,
    we can not say that only one problem is the cause of our precarious
    financial situation, but a combination of factors, that when mix and
    match together are, to say the least, explosive.    That is what has
    happen, again not only to us but to several others (ie. IBM, Apple,
    Dell, among others).   Moreover, not only in hardware vendors,
    software, chips and other high technology firms are also suffering,
    from what I call the 'high expense life of the 80's'.    Companies
    were hiring, spending, etc. like there was no tomorrow.   With the
    realities of the 90's (Technology became another commodity),
    companies started to 'manage' their overstaffed, bloated expense
    budgets in the quickest way possible (lay-off).   Please remember that
    salaries and fringe benefits are between 50% to 60% of a companies
    total cost of doing business, the other costs are highly related to
    salaries, like heat, light and power, real-estate, travel, etc.
    If you do not have manpower (salaries) you do not have heat, light,
    power, travel, real-estate (to a measure I mean - the correspondance
    is certainly not one to one - please don't get me wrong).
    
    	We have killed this one.   The next question is the future.  Is
    DEC doing the 'right thing' ?    What will happen if: a) Economy
    begins to get better and we need more capacity/capability to support
    our customers with needed equipment ? b) The economy gets worst ?
    c) We continue the current trend ? Are we 'right-sized' ?   Do we
    have the right people for the job at hand ?   Are we prepared for the
    best or for the worst ?   These are the type of questions that we
    should be asking.   We can not do anything about the past, however, we
    can do a lot of things about the future.

         Is it true that the stock really dropped from $200 to where it is
    now? I know at one time it was approaching $200 BUT a 2 for 1 split
    occured making the actual value around $100 after the split.So
    ACTUAL drop was only from ~$100.
    
                                      Rich

    No, the last split was before October 1987.  At a price of 200
    (actually 199 rounded up), the company again was contemplating a split
    for the January to March 1998 quarter.
    
    However the stock crashed and has never recovered.

RE: .-1
>         Is it true that the stock really dropped from $200 to where it is
>    now? I know at one time it was approaching $200 BUT a 2 for 1 split
>    occured making the actual value around $100 after the split.So
>    ACTUAL drop was only from ~$100.

This is incorrect.  DEC stock has NOT split since it hit $199.50 shortly
before the stock market crash.

As someone still holding many of those pre-crash shares, I can assure you
that the actual drop WAS from $199.50!

    
    
    	re .80
    
    	What's a 'basket vacation'?
    
    	John

    Like in the military (basket leave), basket vacation is when a timecard
    is filled out and either the secretary or supervisor/manager tosses the 
    card in the waste basket before it gets to payroll.
    
    Marv
    

    What happened to the topic....TFSO status ??
    

    TFSO status is based directly on what is being discussed here. 
    
    What happened to DEC is simple.  Digital built incredible profits until
    the early 1980's because it had a niche, and some might say a monopoly
    of sorts (like intel and microsoft have today) in the mini-computer
    arena.  They fortified this position in the late 1970's by introducing
    the vax line, and an relatively easy upgrade path for their customers.
    
    At the same time as DEC was making enormous profits on its PDP's and
    VAXs it spread out to provide complete data centers for it's customers.
    One stop Shopping from terminals all the way through to networks, with
    the Computer with the VAX as the hub of the wheel.  Having a single
    Architecture on all machines allowed the customer base to get faster
    and bigger machines and maintain some level of software consistency.
    One stop shopping took the thinking part out of the customers hands
    for the most part, and if the company was profitable with Digital's
    equipment, well Hell, keep buying.
    
    At the same time as DEC looked enormously profitable to the chagrin
    of wall street dividend hawks, a chink developed in the armor. 
    Personal computers created a data center at the desk.  In the Hubris
    that DEC exhibited, it said "who'd want one of those toys".  If DEC
    had only looked at its history it would have seen that DEC was built on
    "personal" computing.  But profits were still rolling in, and we didn't
    build toys.  
    
    Well anyway, the gas began to run out of the VAX line, and people were
    saying, why should I pay 2.5 million dollars for 1 computer and 2000
    dollars per terminal when I can by a PC at each desk for 600 bucks and 
    connect to a bigger PC for fileservice.  And hell printers cost 3 or
    400 bucks.   Thats when the new monopoly developed.  Intel processors
    at the heart of a family of machines that ran the same Operating
    system.   Kinda like what we did with the PDP/VAX except 2 or 3
    companies in a sort of Cartel did what we did in that niche we had oh
    so long ago.   
    
    I know people hate the word, but the PARADIGM shifted, but we did not.
    So now we have a financial problem.  We are making products that nobody
    wants, but we employ a lot of people to do it.   Some parts of our
    business make profits, like disks and PC's at real slim margins, and
    yeah we make lots of money of VMS still, but we still have a lot of
    people making less and less products.  If we have a product line of
    50 products instead of 100 products, and processes are more efficient,
    how do you support the people that are left over when there are less
    things to work on.  The simplistic answer is that you 
    find new markets and find things for them to do.
      
    I submit to you that finding the market is that job of the few, 
    and that exploiting the market follows with more resources.   
    That means that as product lines consolidate,
    that until a new product line is created to satisfy a new market
    opportunity, and unless digital has lots and lots and lots of money,
    we cannot have as many people constantly on the roll.   
    
    This means that ultimately we are all here on a contractual basis.
     
    Regardless of that, Wall Street and the investment community are sort
    of like vultures.  A vultures habit is to eat the carrion after another
    animal has done the work of killing the animal, and got its meal and 
    left.  A vulture does not do the killing most of the time.   The 
    market changed, and competition killed us, and Wall street and our 
    investors-owners-us(if you buy stock) circled above plucking at what
    was left over.  In this scenario, the wall street picked at our
    carrion, and went off to consume it in some other fashion...but we
    had already met our demise.
    
    Now we have Alpha chips, OSF, VMS, a good disk business, a brisk PC
    business.  It is the call of those of us who are left to  do those 
    things well.  It is the job of our management to find the new markets
    and determine how to manipulate resources to exploit those markets.
    If a market disappears, there has to be a metamorphasis so that we can
    be ready for the next challenge.  That means cutting when there is
    extra and hiring if we don't the resources in house.
    
      

   >>>>
Regardless of that, Wall Street and the investment community are sort
    of like vultures.  A vultures habit is to eat the carrion after another
    animal has done the work of killing the animal, and got its meal and 
    left.  A vulture does not do the killing most of the time.   The 
    market changed, and competition killed us, and Wall street and our 
    investors-owners-us(if you buy stock) circled above plucking at what
    was left over.  In this scenario, the wall street picked at our
    carrion, and went off to consume it in some other fashion...but we
    had already met our demise.
   >>>>>

   Another way to look at it is that Wall Street and Shareholders are there
   to invest their money in ventures you put up for their consideration. 
   That's called going public. You need large amounts of money to do your
   research, development and marketing and so you go public to raise the
   money. They give you the money and you give them back a decent return
   on investment. You don't; they pull their money out and finance somebodyelse
   who's more dynamic than you. I don't see where the vultures come in. 
   You don't like it. You can stay home and be private like some very
   profitable companies are (S.C.Johnson Wax - the one that makes Glade Plug-ins)


   Let's say you deposit 187$ (price of a DEC share sometime back) in a bank.
   Five years later the bank tells you that it's worth only 36$. If you want
   you can try selling it on the open market and see if anyone is willing
   to pay anything more for it now. How patient would you be with the bank?
   Why is any shareholder any different than you? All this means is that the
   bank has not yet convinced anyone why that deposit is worth more than
   the book value - 36$! Previously they bought our story about the VAX/VMS
   line being a steady money-maker. According to your own excellent summation,
   that edge is gone now. Let's not blame somebody else for all our problems.
   We're slow, inefficient, bloated and brain-dead except for a few pockets.
   WallStreet is nothing but a mirror that shows us what we look like now.
   If we don't like what we see, the problem is not with the mirror!

   Nari

The vulture analogy was used to show that Wall Street didn't kill us, but
informed us that we met our demise.  Actually vultures are good animals
because they hasten the decomposition process by leaving less meat and
digest it creating vulture guano, a good fertilizer, which allows
plants to grow, which feeds herbivores, who are preyed on by carnivores,
who tend to leave a bloody mess for the vultures to circle above...

:-)

   ...Ah! Hah!...

   I get it now....Vultures making immense profits by Buying High and Selling
   Low, especially Digital Stock!!  :-)

   Nari

    
    
    "Greed is Good" 
    
    -Michael Douglas, "Wall St."
    

    re:.last few
    
    No, this isn't "greed is good".  Vultures eat carrion.  They smell the
    dead.  If there are vultures over our head, then they're telling us
    something.
    
    Looking alive is one way to shoo them off.

    re .99
    
    Hmmm - "Death is Nature's Warning"?
    
    /Butch