Unisys is finally to abandon PC manufacturing at a cost of #125 million. The long-awaited move is a further symptom of the continuing shake-out in the PC market, which has seen players like AST run into serious trouble. The PC market is no longer tenable for small-scale manufacturers, according to Martin Sexton, Unisys' European vice-president for corporate communications. "Like most suppliers, we have recognised that the low-end computing market is best served by mass production," he explained. "For Unisys, the unit cost of producing PCs was too high and it is the logical step to have another company produce PCs with the Unisys badge on." Unisys is working with a partner, to be named in March, that will take over its PC manufacturing. Sexton said he does not anticipate any job losses, but could give no guarantees. The move is part of Unisys CEO Lawrence Weinbach's strategy to concentrate on services and support. Announcing the move, Weinbach said the company had been wasting too much time in internal political wrangling between its three business groups. Weinbach's action came as no surprise to analysts. "With people like Compaq and Dell owning such efficient manufacturing facilities, it is becoming increasingly difficult for companies like Unisys and Digital to compete in the PC market," argued Inteco consultant Mike Welch. "The specialists are the best people to do it." Unisys will take a $1.1 billion (#675 million) one-time charge against the fourth quarter figures of 1997 as a result of restructuring. However, the company is still carrying a $2.3 billion (#1.4 billion) debt.
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