Recently reborn as a services company, mainframe computer maker Unisys Corp. may be attractive to several suitors at the moment, but the company has no intention of being acquired, according to CEO Lawrence Weinbach.
"We have no interest in being acquired," Weinbach said in an interview here today. "I came here to build the company, not to sell it." However, if a company approaches Unisys with the aim to acquire, it will ultimately be up to the company's shareholders to decide whether to accept or not, said the CEO, who joined Unisys just over a year ago.
Several months ago, some analysts pinpointed Unisys as a possible takeover target due to its relatively strong line of products, but weak business model. [See "IDC Directions: Unisys, Data General Ripe for Takeover," Apr. 20]
However, since then, Unisys has continued refining its business strategy with a focus on certain vertical industries, such as the airline and financial service markets. Unisys now makes 70% of its revenues from services, including system integration and outsourcing, and just 30% from hardware sales, mainly from its core product group of high-end servers, Weinbach said.
The transformation from ailing mainframe company to successful services company was not an easy one, Weinbach admits. When the gregarious CEO arrived at the company after nearly 30 years at consulting firm Arthur Andersen, "the company had so many troubles people didn't want to look you in the eye," he said. Weinbach set about improving morale by visiting 12,000 Unisys employees in their home locations around the globe, he said. "I see myself as a cheerleader."
His can-do attitude, alongside a major restructuring of the company's business objectives, allowed Weinbach to decrease company debt by US$1 billion in his first year on the job, he said. In addition, Unisys has posted several profitable quarters, with the most recent results continuing to show a comeback, he said. The company reported earnings of US$95.7 million on revenue of $1.78 billion for the third quarter, ended Sept. 30 of this year, compared with earnings of $50.9 million on revenue of $1.62 billion in the same period in 1997.
By the end of 1999, analysts predict, Unisys will report earnings per share of $1.28, while the 1998 prediction is $1.04, Weinbach said. Unisys predicts that it will grow earnings about 8 percent in 1999, then in excess of 10%per year from 2000 on.
Looking forward, Unisys plans to focus more on marketing to get the word out about its new services and products, Weinbach said. The company is currently in the market to hire a vice president of worldwide marketing, a new position that will focus on building up brand recognition. In addition, Unisys is going to relaunch its Web site to make it easier for customers to use. "Right now, we have a terrible Web site," Weinbach said.
In house, Unisys will continue to focus on boosting employee confidence in the company, by implementing bonus, stock and training programs, he said.
Though Unisys realises it will be going up against formidable competitors, including IBM and Compaq Computer Corp., in both the hardware and services market, it believes it can prosper by focusing on only a few vertical markets, Weinbach said.
"If we aren't good at something, we will get out of it," he said.
Unisys, in Blue Bell, Pennsylvania, can be reached at +1-215-986-4011 or on the World Wide Web at http://www.unisys.com/.