AT&T sees merger ending computer losses Phone giant is advised to give NCR autonomy.

May 07, 1991|By Los Angeles Times

Mergers between large technology companies have faile miserably over the years, and Ma Bell herself has performed poorly in the computer business. So, does the $7.4 billion merger of American Telephone & Telegraph Co. and NCR Corp. have a ghost of a prayer of succeeding?

If there is a chance -- and there is no unanimity on that point -- analysts say it will only be if AT&T keeps its hands off NCR and allows the computer company's managers to operate autonomously, far outside the sometimes stifling bureaucracy of the century-old telephone company.

"NCR has a good management team. That's one of the reasons AT&T wanted NCR," said William Redmond, a technology analyst at the Gartner Group in Stamford, Conn. "The biggest thing AT&T can do wrong is to put heavy-handed management in there."

Adds Ulrich Weil, a Washington technology analyst: "It could be disastrous if AT&T tries to impose its will and culture on NCR. AT&T is much more bureaucratic, and they've already proven that they don't know how to succeed in the computer business."

AT&T officials say that they have every intention of letting NCR take over the phone company's sagging computer operations and integrate them into NCR's own business. And then, stresses AT&T Chairman Robert E. Allen, NCR management will be left to run the show from its headquarters in Dayton, Ohio.

"The big question is what does NCR do for AT&T over the next decade," says Frank Governalli, a telecommunications analyst at the investment firm of First Boston. "AT&T wants to be a player in the combination of computers and communication. And it wants to boost its long-distance business. That's the goal.

Initially, the merged company must satisfy current owners of AT&T and NCR computers that parts and technical support still will be available for those models. Then, to maintain momentum while a new merger strategy is fashioned, the company must also continue to sell those models to their traditional customers.

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