Tandon to Shift Emphasis Into Personal Computers

Tandon, a maker of computer disk drives based in Chatsworth, announced Monday that it would shift its focus to personal computers and named an IBM manufacturing executive as its president to help direct the company’s changeover.

Dan H. Wilkie, 42, general manager of IBM’s main personal computer plant in Boca Raton, Fla., will become Tandon’s president and chief operating officer next Monday. Wilkie, who will have a seat on Tandon’s board, will take responsibility for the company’s daily operations.

The company’s founder, Sirjang L. (Jugi) Tandon, remains chairman and chief executive.

Earlier this month, Tandon hired another one-time member of IBM’s personal computer team. H. L. (Sparky) Sparks, who was named to Tandon’s newly created position of senior vice president for sales and marketing, had been director of sales and service for IBM’s personal computer unit at the time of the PC’s launch in 1981.

“This is a new era at Tandon. Sparky and Wilkie are heavyweights,” said Norm DeWitt, an analyst who follows the personal computer industry for Dataquest, a San Jose market research firm.

Tandon’s move to increase its presence in the personal computer field comes amid an industry slump. DeWitt said Dataquest expected that 80% of the estimated 350 companies worldwide now making personal computers will be out of business by the end of 1987.

“The shakeout’s barely begun,” he said.

Sirjang Tandon said he was not under pressure from shareholders or creditors to name a new president. However, the company has posted about $50 million in losses through the first nine months of the fiscal year and expects losses for the fourth quarter ended Sept. 30.

James Porter, editor of Disk/Trend Report, said that Tandon is being forced to diversify because of competition from Japanese manufacturers and slack demand for disk drives, which store and retrieve information for computers. Tandon primarily makes the lower-capacity disk drives known as “floppy” drives that have been especially hard hit by foreign competition.

“They only have so many options. They can’t put more money into the floppy drives. That would be like jumping off a cliff,” Porter said.

Tandon predicted that, by late next year, the largest share of the company’s revenue will come from personal computer sales. He said personal computer sales accounted for more than 25% of the company’s revenue in the most recent fiscal year.

Tandon estimated the company’s revenue at $260 million to $280 million for the year, down more than 30% from the year before.

Last year Tandon began making a personal computer compatible with the IBM PC-XT, which is IBM’s second most powerful personal computer, for Tandy Corp. that is sold under the Radio Shack name. Analysts speculated that Tandon will try to negotiate similar arrangements with other retailers.

Tandon also sells a personal computer in Europe under its own name and is considering doing the same in the United States.

Both Wilkie and founder Tandon said the company will have a manufacturing advantage over other personal computer makers because it already produces parts, such as disk drives and printed circuit boards, for personal computers. Tandon said he is not worried about the amount of competition in the depressed personal computer market.

“There are fewer competitors now than there were 18 months back,” Tandon said.