New Tandon President Shifts Gears From IBM
At 42, Dan H. Wilkie finds himself president of a company some people may soon be calling Baby Blue.
In taking charge Monday of day-to-day operations at Chatsworth-based Tandon, Wilkie ended a comfortable 18-year career with IBM to join four other alumni of IBM, or Big Blue, in the executive suites of the disk drive company.
Wilkie was hired three weeks after H. L. (Sparky) Sparks, a former IBM executive and Compaq Computer Corp. executive, became Tandon’s senior vice president of sales and marketing.
One of the first adjustments Wilkie expects to make is changing his dress habits from the button-down white shirts and wing-tip shoes that he wore each day at conservative IBM to the shirt-sleeve style of Tandon.
“I think it will take me about a day to get used to that,” he said.
Drastic Job Shift
Beyond a new dress code, there are more significant changes in store for Wilkie. He is moving from general manager in charge of operations at IBM’s complex in Boca Raton, Fla., widely regarded as the premier personal computer facility in the world, to a company that is bleeding red ink and burdened with excessive inventory.
Besides stemming Tandon’s losses, which were a whopping $50 million in the first nine months of the fiscal year ended Sept. 30, he will also become a key player in guiding the company through a transformation.
Tandon plans to move from being primarily a maker of disk drives, devices computers use to record and retrieve information, to primarily making personal computer systems.
All of this comes at a time when the personal computer business is in a slump that has pushed several once high-flying companies either into the red or out of business. One study by Dataquest, a San Jose market research firm, estimates that four out of five of the 350 companies now involved in personal computer manufacturing worldwide will be defunct within two years.
Founder Confident
Nevertheless, Tandon’s founder and chairman, Sirjang Lal (Jugi) Tandon, believes the company can turn around its fortunes by shifting its attention to personal computers.
He estimates the number of personal computers Tandon makes will increase from 5,000 to 6,000 a month now to 20,000 to 30,000 a month by late next year. He also expects that by this time next year, personal computers could replace disk drives as Tandon’s largest business in sales.
“We’re getting into it in a big way,” Tandon said.
To get the executives he wanted to help transform the company, Tandon personally courted them over about a two-month period, calling each one at home at night to make the offers. Wilkie and Sparks said they were aware the other was being recruited and discussed the offers while they were making their decisions.
Wilkie was familiar with Tandon because the company had been one of IBM’s biggest suppliers of disk drives for its personal computer. He and Sirjang Tandon negotiated for eight weeks, visiting Tandon’s facilities and eating dinner together. At one point, Sirjang Tandon let Wilkie borrow a 1984 Mercedes-Benz from his automobile collection.
“I changed my mind about the job every other day for a week as I slept with my eyeballs open,” Wilkie said. Finally, he accepted Tandon’s offer about two weeks ago.
For Sparks, the decision was easier. He had left IBM to help launch Houston-based Compaq, and said he welcomed another chance to build a major personal computer firm.
“This is an opportunity for me to design and create a new sales organization and a new delivery system,” he said.
Backgrounds in Common
Wilkie and Sparks have more in common than their employment by IBM. Both are from small Midwest towns, Wilkie from Portage, Ind., and Sparks from Alton, Ill.
Both began their careers in engineering, with Wilkie earning a bachelor’s degree in mechanical engineering from Chicago Technical College and Sparks graduating from the University of Tulsa with a degree in petroleum engineering.
Both also have a solid dislike for the first names they were given--Wilkie’s is Danny and Sparks’ is Harold--and never use them professionally. Wilkie’s hobby is tennis and taking care of his 1967 Corvette convertible. Sparks has a 30-foot boat he sails on weekends.
Wilkie wanted to work for IBM out of college, but was rejected by the company. He got his chance in 1967, when he signed on as an engineer in Florida.
Sparks joined IBM in 1963 from the oil business when IBM was looking for an engineer to work on a project for a Texas oil company. Two years later, he started his sales career when IBM needed someone to sell oil refining control systems.
Both men list as the most important break in their careers their involvement in the original team that designed the IBM PC, or personal computer, in Boca Raton in 1980 and 1981. Both say their opportunities at Tandon are similar to the opportunities they had in launching the IBM PC.
Tandon executives are still debating whether to sell a Tandon-brand personal computer in the United States like the one that is already being sold in Europe.
Company executives expect to emphasize sales to the private-label market, in which retailers sell a Tandon-made computer under their own brand name. It now makes computers for Fort Worth-based Tandy, which sells them in its Radio Shack stores as the Tandy 1200.
Low-Cost Market Segment
Wilkie and Sparks said they believe Tandon can become the low-cost supplier of IBM-compatible computers to dealers and so-called value-added resellers, those who buy computer equipment and tailor it for a specific use, such as accounting or legal work.
They also predicted that the company can gain a good share of this market because it already makes the key ingredients for personal computers, such as disk drives, and has manufacturing plants set up in Asia, where labor and parts are cheaper.
The lower the cost of the computers Tandon supplies to dealers, Sparks said, the more profit the sellers will make.
“They need profit margins,” he said. “That’s the one thing that is missing today.”
