Can `Techie Bonding' Overcome Bad Blood?Peter Coy
Talk about turning on a dime. For most of five months, NCR Chairman Charles E. Exley Jr. threw his vast energies into resisting American Telephone & Telegraph Co.'s attempt to take over NCR, blasting AT&T's "failed strategy" in computers. But when, on May 6, a takeover deal was struck, Exley was the soul of cooperation. Grinning and clasping hands with AT&T Chairman Robert E. Allen at a New York news conference, Exley said his criticisms of AT&T had mysteriously faded from memory, and he vowed to work to make the merger succeed. Backing his words, he spent 10 1/2 hours the next day in Morristown, N. J., touring AT&T's Computer Systems unit.
Allen can only hope that Exley will serve as the bellwether for all of NCR. AT&T's acquisition of NCR for $7.4 billion in stock--$110 a share--will work only with goodwill on both sides. And although Exley will retire when the merger is final, his statement that "all of us have a stake in the success of this new enterprise" should help make AT&T welcome back at NCR's Dayton (Ohio) headquarters, where Exley is widely respected. That, in turn, should help AT&T achieve those synergies between computers and communications that are more often promised than delivered.
AT&T doesn't have to achieve those synergies right away. In fact, trying too hard for them could spoil the deal. Still, AT&T is convinced that there really is profit in uniting computers and communications under one roof. Most analyses of the AT&T-NCR deal, pro and con alike, have treated that question vaguely. By inviting Exley to Morristown, AT&T is beginning to try to turn its theories of synergy into reality.
Some of the products that the companies could jointly develop are easy bets: They're already working separately on putting video cameras on automated teller machines so that customers can communicate face-to-face with a distant teller or loan officer (table). AT&T speech-recognition chips are another natural for NCR computers and other gear.
SLOW MOVERS. Less obvious, but potentially more lucrative, is how the companies could cooperate on the coming generation of smart cards and smart phones and the computer networks they communicate with. Imagine buying an airline ticket by smart card, a credit-card-sized device loaded with personalized information. You put the AT&T card in the NCR ATM and order a ticket. The airline reads the card to make sure your credit is good. If it is, it "writes" the ticket onto your card. At the airport, you present your card instead of a paper ticket. If it chooses, the airline can load your card with other information, too, down to whether there's a meal on your flight.
Such electronic transaction systems have been slow to catch on, and AT&T and NCR aren't the only companies exploring them. But by joining forces and recruiting customers such as banks, they might be able to stimulate more public acceptance of the systems. And smart cards and smart phones could stimulate use of NCR computers and AT&T long-distance service.
The two companies will need open communication to work on such long-term projects. But they may have trouble hearing each other after the din of the takeover battle. Allen has probably soothed many at NCR with his promise that any job cuts from consolidation will come from AT&T's ranks. Another sweetener: Exley's successor as chief executive, 54-year-old Gilbert P. Williamson, will report directly to Allen and sit on AT&T's board. Lee W. Hoevel, NCR's vice-president for technology and development, says he hopes to promote "techie bonding" between his people and their counterparts at Bell Laboratories.
If anything, there seems to be more trepidation about the merger at AT&T than at NCR. After the merger announcement, a chin-up spirit prevailed at AT&T Computer Systems. Still, employees of the money-losing unit were wondering whether to go ahead with a June news conference on a particular new product or slip it into the market unannounced, since the companies haven't yet coordinated strategies.
Days before the deal was struck, NCR headquarters employees stripped anti-AT&T cartoons from their walls in preparation for visits from soon-to-be colleagues. One trashed cartoon showed an AT&T frog zapping an NCR butterfly. If Bob Allen is to make this merger work, he has to hope that sort of sentiment becomes suddenly obsolete in Dayton.
HOW AT&T AND NCR COULD GET IT TOGETHER
AT&T may study these high-tech marriages
ENHANCED TELLER MACHINES AT&T could add video connections to NCR's cash machines so that bank customers could communicate with distant tellers
COMPUTERS THAT `HEAR' AT&T's voice technology could help NCR computers understand limited speech
SMART CARDS NCR could help develop these credit-card-size devices, which store personal data
SMART PHONES NCR could work with AT&T to develop and promote smart phones, due out soon, with display screens for home shopping and banking