McDonnell Plans Restructuring of Computer Business
McDonnell Douglas Corp. confirmed Friday that it plans a major restructuring of its money-losing computer business, a move likely to affect the careers of some of the firm’s 1,000 Orange County employees.
“There may well be some layoffs,” said Peter Lewis, an assistant to Jeremy J. Causley, group executive officer of McDonnell Douglas’ Information Systems Group, an amalgam of high-technology companies. “But we can’t offer any figures because we’re still evaluating and focusing in.”
The Information Systems Group reported a loss of $69.7 million in 1986 and accounted for $1.2 billion of McDonnell Douglas’ 1986 revenues of $12.8 billion. The loss included an $87-million write-down of costs associated with various acquisitions.
“The losses are getting smaller,” Lewis said. “There’s been a steady improvement.” But Causley, he said, “is impatient with the progress and wants a higher rate of improvement.”
Company employees learned of the restructuring Thursday. And in a statement issued by the company Friday, Causley said that “it has become apparent that some of our operations are investing too much in the context of the earnings we expect. Our goal is to implement processes of conducting our business more efficiently.”
McDonnell Douglas Computer Systems Co., which manufactures computers for specialized businesses, employs about 800 people at 11 facilities in Newport Beach and Irvine. McDonnell Douglas Field Service Co., which provides computer maintenance services, has 200 Orange County workers, mostly in Irvine. The computer group also employs about 1,000 workers at its Network Systems Co. in Cupertino.
The Information Systems Group employs 12,000 in the United States and several foreign countries. The group was formed in 1984 to spur McDonnell Douglas’ efforts to cash in on the rapidly expanding information-processing industry and reduce its exposure to fluctuations in its aerospace and defense business. However, the group has been hurt by a general slowdown in the computer industry.
