Spin at Sperry

Sperry Rand Corp. produces a range of goods from hay balers and electric shavers to gyroscopes and Univac computers, but lately it seems to be turning out people faster than anything else. The first notable exit was staged last fall by George M. Bunker, whose Martin Marietta Corp. had bought 800,000 Sperry shares with a view toward a merger that both companies appeared to want. Soon discovering that he could not get along with Sperry's top management, Bunker resigned as a director and sold off Martin's shares in what was the biggest single liquidation in Wall Street annals. A month ago, Sperry Executive Vice President Kenneth R. Herman retired and, in a rare move, sold all his 29,539 shares. This week Univac Division President Louis T. Rader leaves to become chief of the industrial electronics division at competing General Electric.

This series of shifts and sales has focused attention on the man who has remained stolid and stationary, President Harry Vickers, 65. A self-made engineer, Vickers achieved success 40 years ago by inventing advanced hydraulic controls for trucks. He formed Vickers Manufacturing Co. and through a series of mergers ultimately came to the top of Sperry Rand. Today he controls the company because he is the largest shareholder, with one-half of 1% of the widely scattered stock, and has a permissive board that includes several friends. Even when General Douglas MacArthur was chairman, Vickers was the single-minded commander.

Luck & Layoffs. Vickers is fond of saying that "success is 921% luck --and the rest is hard work." He worked hard to bring about a merger nine years ago between his Sperry Corp. and Remington Rand Corp., but the marriage has had uneven luck. Remington Rand attracted him because it was such an early leader in the computer field that its Univacs were once synonymous with computers. Like many companies, however, Sperry Rand found it easier to make than to market a good product. Cracks the departing Louis Rader: "Whoever said that if you build a better mousetrap the world will beat a path to your door was out of his cotton-picking mind."

Sperry has often been edged out by the superior selling drive of IBM, which has 75% of the market, and has paid Sperry $9,000,000 since 1956 for patent infringements. Though its late-model Univac IIIs and 1004s are rated among the best computers in the field, Sperry's Univac division trails in some key areas; General Electric, for example, is well ahead in the promising "process control" computers that can run pipeline systems or steel mills. Under Rader, Univac had made great progress toward closing the gaps, and thus his move to G.E. is a double blow.

At the same time, the company has been hit by the U.S.'s planned 10% reduction in defense orders. Sperry Rand counts on the Pentagon for half of its sales. In the past year its defense backlog has dropped 14% to $515 million, and it has laid off 300 engineers, as well as 1,300 production workers.

30% Drop. On the plus side, Sperry has made remarkable gains in its earnings by improving the servicing of its products and increasing business overseas. Vickers says that the company is now making money everywhere except in the brutally competitive typewriter and computer fields--but that Univac will be in the black by year's end. Recently the company announced that while last year's sales rose only fractionally to $1.28 billion, profits almost doubled to $26 million. That is still a lower rate of profit than competitors have, but the improvement might seem sufficient to please investors.

It has not. Gruff, slow-talking Harry Vickers charges that Wall Streeters have been knocking Sperry stock in hopes of buying it on the cheap. Wall Streeters, who think about as highly of Vickers as he does of them, reply that the stock has been hurt by the recent executive departures and divestitures. Last week Sperry stock closed at 14 3/4 --off more than 30% since Jan. 1.

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