Compagnie des Machines Bull SA, facing probably the biggest crisis in its history now that it is confronted with an administration not prepared to pour ever more good taxpayers’ money after bad (CI No 2,166), yesterday reported that turnover for the first quarter of the year crashed by 10.6%, to the equivalent of $943m; sales slumped 16.5% to $422m and rentals and services fell 5.1% to $521m. The company did not say anothing about the level of losses, but it is hard to improve profitability against a background of falling sales. The company is now in a regulatory climate where no objection would be made to either of its corporate investors, NEC Corp and IBM Corp, each with around 5%, greatly increasing their stakes in the company – to perhaps 25% each – but IBM has no cash to spare even if it wanted to get more involved with a company forever at the mercy of the shifting tides of French policy and NEC Corp, which two or three years ago would have jumped at the opportunity of making Bull a European and US outlet for far more of its products, faces a price war in its cash cow personal computer business back home and faces such a hard time that it has just seen its debt ratings cut – at a time when cheap capital is no longer available in Japan.
