Orange County 1990 The Year in Review : Year in Review / HIGH-TECH HIGHS AND LOWS : Early Promise Faded With Economy
The year started out full of promise for many of Orange County’s high technology companies, but with few exceptions, the second half was a time of retrenchment, restructuring, layoffs and in several cases bankruptcy. As the economy soured in the wake of the Iraqi invation of Kuwait on Aug. 2, many companies cut back on capital spending, and the technology sector suffered.
Mergers Archive Corp., maker of computer storage backup systems in Costa Mesa, succeeded in acquiring its archrival, Cipher Data Products in San Diego, for $121 million. Archive merged Cipher’s operations into its own, laid off 3% of the combined work force, and reported a profit for its fiscal year.
Bankruptcies Charles Missler, a self-proclaimed turnaround artist, took his Phoenix Group International into bankruptcy proceedings in November after the company failed to obtain financing and execute on a highly publicized deal to sell 6 million computers in the Soviet Union.
Layoffs Parker Bertea Aerospace, a parts subsidiary of Parker Hannifin Corp. in Cleveland, quietly laid off 391 people in Irvine because of a downturn in defense spending. The cuts reduced Parker Bertea’s local employment to 3,000.
Patents Gilbert P. Hyatt, a workaholic inventor in La Habra, won two basic patents on computer technology after a 20-year battle with patent examiners. One of the patents, which may establish Hyatt as the father of the microprocessor, could enable Hyatt to collect millions of dollars in royalties from the world’s biggest semiconductor companies.
Regulation In March, Diceon Electronics Inc. in Irvine settled charges that it violated environmental laws by dumping toxic wastes into the Los Angeles sewer system. Under the agreement, Diceon agreed to pay a $600,000 fine and was placed on three years’ probation.
Expansion Toshiba America Information Systems, the Irvine-based subsidiary of Toshiba Corp., announced plans to triple its U.S. employment and double its work force in Irvine by 1992 as part of an accelerated plan to make its products in the United States.
Relocation PacTel Cellular, the car phone subsidiary of Pacific Telesis Corp., said in November it would move its headquarters from Irvine to San Francisco as part of a corporate restructuring. The company said 128 jobs would be transferred as a result.
Proxy Battle Martin E. Tash, chairman of a New York publishing firm, led a stockholder revolt against Gradco Systems Inc. and its chief executive, Keith B. Stewart, alleging that the copier firm’s top officers were benefiting from certain transactions at shareholder expense. The Tash group successfully unseated Stewart and took over Gradco in October after a three-month battle.
A Losing Stock . . . Western Digital Corp. Prospects looked promising during the first half of 1990. The company’s stock price climbed to nearly $15 a share on rumors that it had won a contract to build notebook computers for IBM Corp. But the stock began to slide as the rumor didn’t materialize. It fell below $5 a share after the company announced lower earnings forecasts and said it would close down a computer board manufacturing plant in Puerto Rico.
Western Digital Corp. Closing price: $4.50 *indicates a partial period . . . And A Winner AST Research Inc.
Its fortunes in the computer industry rose despite the onset of a national recession. Buoyed by its penetration of the high-end personal computer market, aggressive pricing and an overseas expansion, it is one of the few computer companies that consistently outperformed Wall Street’s earnings expectations last year. The stock rose steadily through the year from just over $10 to nearly $34 by late December.
AST Research Inc.
Closing price: $33.62 *indicates a partial period Source: The companies and the Los Angeles Times files.
Los Angeles Times
