History (1989): Very Difficult Period for Rodime

Can the new managing team at Rodime PLC (Glenrothes, Scotland) get the company back into business? It looks doubtful.

The turnover of the Scottish firm in the third quarter, ended June 30, 1 989, was $16.3 million, below the 1988 third quarter of $29.9 million. Even the operating loss of $7.6 million is worse, amounting to $5.1 million in 3Q88, despite a small improvement in comparison with the $8.8 million in 2Q89.

Rodime’s sales are continuously dropping and the company keeps loosing money. Does one of Europe’s last HDD manufacturers still have one chance to survive? It’s going to be very difficult, if not impossible.

The new head executives of Rodime, Thomas G. Kamp, chairman, and Peter G . Bailey, MD, are trying to save the company as they are adopting drastic changes on top of a new re-capitalisation plan mainly underwritten by the Scotland Bank.

“Doing the financing was kind of like taking 70 dogs for a walk without leads and having to get them all through the same doorway,” said Bailey.

The decision to cease disk drive production that was not profitable in Boca Raton, FL was taken for good.

Agreements have been made with the main suppliers with whom Rodime has debts so that they continue shipments, to allow the company to keep on manufacturing.

Luckily, Rodime has strong assets and can survive for a while.

“From our Bank’s standpoint, our available lines are $36 million,” revealed Bailey, ” We’re obviously not fully utilizing that today, because we have just absorbed all the equity. And in fact, right now we probably have close to $20 million of unutilized lines.”

And maybe, who knows?, it could win some of its lawsuits against IBM or Conner, which would give the company a little money, or on the contrary avoid it from loosing some by turning down Jasmine’s and Apricot’s charges.

Bailey hopes that the company will come back to profitability “in a few more quarters.” “The whole manufacturing cost was higher than the sales prices, but, for the highest capacity drives, 100 and 200MB, we’re very profitable because we have limited competition.”

A large agreement could recently have been signed with Sun to supply HDDs on workstations that should soon be announced.

Among Rodime’s new priorities is the ambition to spotlight on high capacity drives, to reduce manufacturing cost and finally better commercial relationships with its partners, especially with OEMs.

The company is going to focus on 3.5-inch drives with smaller and smaller form factors, and on vertical recording on HDDs.

Another target will be a 40MB 2.5-inch form factor drive with a 30ms access time developed with a foreign partner.

“New Rodime, is going to be a lot of fun!” said Bailey. For who? Rodime or its competitors?

This article is an abstract of news published on the former paper version of Computer Data Storage Newsletter on issue ≠19/20, published on August/September 1989.