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Technology Stocks : Western Digital (WDC) -- Ignore unavailable to you. Want to Upgrade?

To: appro who wrote (10428)	8/3/1999 11:47:00 AM
From: David Harker	Read Replies (1) \| Respond to of 11057

All, some WDC news from Rochester, MN newspaper (home of WDC's Enterprise group) Two recent articles (since CEO was visiting town), one of which is linked below, via the newspaper's minimal web site, which does not have a link to the most recent article. Here are some text snippets from the unlinkable article (Written by Bob Freund, Aug 2, Post Bulletin, Page 5C): All bold highlighting was done by me, not the paper. ------ "Search for Replacement goes on" (dh - article tells of Haggerty's original desire to retire in 1997, but disk industry crisis stopped that) "Earlier this year, Haggerty and others thought the underlying factor, overproduction of the devices, had eased and prices might recover. But other factors, such as plunging price tags for PCs in general, have conspired to keep prices low. 'Last Quarter (ending June 30) was probably the worst that any of us have seen in the history of the industry,' he says. Prices for the most popular sizes of drives fell 22 to 24 percent, according to the executive. To put it in perspective, Haggerty says prices are so low that Western Digital is only receiving the equivalent of what it costs to produce the desktop disk drives. It is not getting paid at all for the technology and research that goes into them. Wall Street now doesn't see WDC returning to profitability for several more quarters. Nonetheless, Haggerty says the company still has ample staying power. It has $225 million in cash to work with, plus a back-up line of credit over $200 million. 'We have enough cash to carry us through,' Haggerty says." ... (back to CEO search) "Some internal talent will be strong contenders. Among them is likely to be executive VP Matt Massengill, who headed the Rochester-based Enterprise Storage Group from mid-'97 to mid-'98 and is now WDC's No. 2 leader." ------ Here is the other article (July 26), and the link to it: 209.163.50.231 "Haggerty Local lab's future bright Monday, July 26, 1999 By Bob Freund The Post-Bulletin Western Digital Corp.'s development laboratory in Rochester is secure and could become a prime factor in the future of the disk drive company, its soon-to-retire chairman and chief executive officer said today. Chuck Haggerty said during an interview that the high-capacity disk drives designed at the local plant remain a key element for both financial and technology reasons. While price-cutting has sapped profits for all makers of disk drives used in desktop computers, the bigger and faster drives provide much better returns, the Rochester native said. "Every one is equal to six to seven desktop drives in profitability." The technology of the high-capacity drives also differs from the desktops, and Western Digital's experts are all in Rochester, he said. They will be working in a $32 million design complex just after the first of the year. Haggerty announced last week a search for a successor, saying he plans to leave Western Digital in June 2000 after about 36 years in the computer business. His retirement is being timed to coincide with a large-scale company restructuring. The restructuring itself will not slash the work force further. "I don't foresee any major layoffs here in Rochester," he said. But, from time to time, there may be minor layoffs related to needs for products or skills, Haggerty said. Western Digital closed its fiscal year with losses of $492.7 million, or $5.51 a common share. The performance increased the company's losses to $712.9 million over the past two years. With all disk drive makers taking big baths in red ink for their desktop products, such cutthroat pricing can't last forever, Haggerty says. He was in Rochester today to play in Western Digital's Annual Charity Golf Classic, being held at the Rochester Golf and Country Club."