pa1132@sdcc15.ucsd.edu (pa1132) (03/14/89)
According to a Federated employee in El Cajon, CA store, Atari has seperated itself from Federated. Now Federated is in its own completely, and is expected to be bankrupted soon. Atari is said to make "megabucks" by doing this because it can deduct the Federated loss from tax. Federated is left to die on its own. We should condemn Atari for its irresponsibility! And if Atari can do this to Federated employees, nobody knows what Atari can do to Atari employees in the future!
walkerb@tramp.Colorado.EDU (Brian Walker) (03/14/89)
In article <1308@sdcc15.ucsd.edu> pa1132@sdcc15.UUCP writes: #According to a Federated employee in El Cajon, CA store, Atari has #seperated itself from Federated. Now Federated is in its own #completely, and is expected to be bankrupted soon. Atari is said to #make "megabucks" by doing this because it can deduct the Federated #loss from tax. Federated is left to die on its own. We should #condemn Atari for its irresponsibility! And if Atari can do this to #Federated employees, nobody knows what Atari can do to Atari #employees in the future! Frankly, that's life in the business community. If Federated wasn't making money, then why keep it around? But in any case, aren't you being a little melo-dramatic? Ditching Federated, a losing division, is not the same as getting rid of Atari employees. One could even argue that the move was for the benefit of Atari employees who's jobs could have been at risk by the losses suffered from Federated. Now, if Federated can now turn itself around, then we'll know that Atari made a bad decision. If not, then we'll know what Federated had in store for Atari. As further reference, note the following: In article <739@stag.UUCP>, thelake!steve@stag.UUCP (Steve Yelvington) #Friday's edition of the Wall Street Journal carried a report that Atari #Corp. lost $97 million in the fourth quarter of 1988, including more than #$100 million in writeoffs and reserves charged to the Federated Group #retail subsidiary. According to the article, Federated's fate will be #announced soon; options include sale, spinoff and leveraged buyout. # #Without the Federated losses, Atari would have made an operating profit of #$9.3 million for the quarter, down from $21.2 million, a drop attributed #to high RAM chip prices. # #An Atari spokesman was quoted as saying that "a number of new items #designed to complement the existing ST and MS-DOS product lines will be #announced this year" and that RAM prices were dropping. Atari stock closed #up 75 cents, at $6.50 Brian Walker, University of Colorado at Boulder walkerb@tramp.colorado.edu ...!{ncar,nbires}!boulder!tramp!walkerb "As far as we were aware, we simply made up the language as we went along" -John Backus on the developement of FORTRAN
paone@aramis.rutgers.edu (Phil Paone) (03/14/89)
Don't blame Atari, blame the Federated lawyers that misrepresented the status of the company to Atari when they purchased it. Also, Atari lost millions last year because of the debts run up by Federated BEFORE Atari took it over. They had no real choice. -- Phil Paone attmail!ppaone !rutgers.edu!topaz.edu!ppaone paone@topaz.rutgers.edu
rjung@sal44.usc.edu (Robert allen Jung) (03/15/89)
In article <1308@sdcc15.ucsd.edu> pa1132@sdcc15.UUCP () writes: >According to a Federated employee in El Cajon, CA store, Atari has >seperated itself from Federated. Now Federated is in its own >completely, and is expected to be bankrupted soon. Atari is said to >make "megabucks" by doing this because it can deduct the Federated >loss from tax. Federated is left to die on its own. Just out of curiousity, how reliable a source is "a Federated employee"? Atari has announced plans to sell Federated ASAP a few days ago (leveraged buyout, anyone?), but is this the same as "left to die on its own"? Would Atari make more money by writing off Federated, or by selling it? --R.J. B-) ============================================================================= Disclaimer: This message was written with my authorization # ## # # ## # Mailing address: rjung@nunki.usc.edu ## ## ## (It's easier to just use the reply function, tho) #### ## ####
saj@chinet.chi.il.us (Stephen Jacobs) (03/15/89)
This is in response to an article condemning Atari for dropping Federated. Atari tried very hard to make Federated a winner, and lost an amount lately estimated as about $100 million in the process. It seems (from what I read in the Wall Street Journal) that 'everyone' in the retail business (but few people in the computer business) knew that Federated was a basket case before Atari bought it. Atari simply doesn't have that much money to lose, so they're getting out while there still is an Atari. They don't exactly make money by doing that, but our enlightened (???) tax laws allow businesses which go from money-losing to money-making to write off their earlier losses against their later profits. At that, it is by no means a certainty that Atari can survive as an independent company (in other words, back to the beginning of the Tramiel era, financially). I have trouble blaming someone for doing everything possible to save the family business.
Xorg@cup.portal.com (Peter Ted Szymonik) (03/15/89)
Actually I think its a very smart move. The money spent to keep Federated alive was money that was not being spent on R&D and advertising - in my opinion Federated should have been dumped long ago. And if the lawsuit finds that the previous owners did inflate the inventory before the sale the tale is told! Peter Szymonik a
covertr@gtephx.UUCP (Richard E. Covert) (03/17/89)
In article <1308@sdcc15.ucsd.edu>, pa1132@sdcc15.ucsd.edu (pa1132) writes: > According to a Federated employee in El Cajon, CA store, Atari has > seperated itself from Federated. Now Federated is in its own > completely, and is expected to be bankrupted soon. Atari is said to > make "megabucks" by doing this because it can deduct the Federated > loss from tax. Federated is left to die on its own. We should > condemn Atari for its irresponsibility! And if Atari can do this to > Federated employees, nobody knows what Atari can do to Atari > employees in the future! I totally disagree with the above writer. Atari has made the best possible decision in dumping FG. I live in anarea with many FG stores (Phoenix,AZ) and those store are all losers. I don't shop there because of poor prices, rotten customer service, and poor selection. Atari tried to turn the stores arounds. Atari eeven made one of the FG stores into a model ST COMPUTER STORE and even that didn't help improve sales much. Also, the few local independent Atari stores (COMPUTER WORKS in Glendale AZ) were being hurt by Atari's pricing with regards to FG stores. FG stores got the 520STFM (the one with the double sided floppy drive) weeks before COMPUTER WORKS got them. That really made the COMPUTER WORKS store owner mad!!! I am certain that Atari tried to find someone to buy FG, but probably couldn't find any takers. Now that Atari si out of the retail sale business maybe Atari will have some money to spend on finishing the 68030 machine, and getting the Laptop ST out. By the way, Atari is now shipping the SLM804-PCV which is the old SLM-804 laser printer bundled with the Imagen ULTRASCIPT postscipt language. I would recommend buying a Mega ST4 if you plan on using it though!! But, that is VERY good news for us Atarians!! And Calamus is setting the DTP amrket on fire, it is that good!! Well, anyway, I for one approve of Atari's decision to dump FG stores. and I jhope that Atari can recover from its $200 Million Dollar mistake!!!! Richard (SLM804 owner and saving up for UltraScript) Covert
greg@bilbo (Greg Wageman) (03/17/89)
In article <1308@sdcc15.ucsd.edu> pa1132@sdcc15.UUCP () writes: >According to a Federated employee in El Cajon, CA store, Atari has >seperated itself from Federated. Now Federated is in its own >completely, and is expected to be bankrupted soon. Atari is said to >make "megabucks" by doing this because it can deduct the Federated >loss from tax. Federated is left to die on its own. We should >condemn Atari for its irresponsibility! And if Atari can do this to >Federated employees, nobody knows what Atari can do to Atari >employees in the future! What a strange point of view. You have much to learn about the business world. Businesses exist to make money. Any publicly-held corporation (such as Atari Corp.) has an obligation to make a profit for its stockholders. Atari's management would be grossly negligent if they retained Federated until its cash drain pulled the whole of the corporation into bankruptcy. Is this what you are advocating? That would certainly result in the loss of the jobs of not only Federated employees, but Atari Corp. employees as well, plus the loss of the investments of Atari's stockholders, not to mention the effect on all of the Atari dealers and owners. Furthermore, there is no certainty that "Federated is left to die on its own". It will be sold (if a buyer can be found). The new buyer can inject sufficient cash into the company to keep it afloat, while it rebuilds it from within. The "death" of Federated is by no means certain. I would like to congratulate Atari for making a sound business decision. The only question is, "Why did Atari buy Federated in the first place, when many independent observers said it was a bad deal?" Longish .signature follows. Skip now, or don't complain! Greg Wageman ARPA: greg@sj.ate.slb.com Schlumberger Technologies BIX: gwage 1601 Technology Drive CIS: 74016,352 San Jose, CA 95110-1397 UUCP: ...!uunet!sjsca4!greg (408) 437-5198 ------------------ There's nothing I hate more than a Usenet posting which took three seconds to compose and three minutes to type, glibly dismissing three years (or three decades) of an author's work in three lines. ------------------ Opinions expressed herein are solely the responsibility of the author. (And the author wouldn't have it any other way.)
ericg@sco.COM (Eric Griswold) (03/21/89)
pa1132@sdcc15.UUCP () wrote in article <1308@sdcc15.ucsd.edu>: >Now Federated is in its own >completely, and is expected to be bankrupted soon. Atari is said to >make "megabucks" by doing this because it can deduct the Federated >loss from tax. Federated is left to die on its own. We should >condemn Atari for its irresponsibility! And if Atari can do this to >Federated employees, nobody knows what Atari can do to Atari >employees in the future! <begin sarcasm> It is so awful how a business makes a decision to get rid of a situation that is losing money! I mean really, any good business would keep around a major sinking ship just because it has such a big heart. Let's condemn Atari. Let's condemn Warner Communcations for doing the same thing to Atari years back. Let's condemn free enterprise entirely and let mediocrity take over. <end sarcasm> Good move, Atari. I was surprised when the decision was made to purchase it. -- Eric Griswold (ericg@sco.COM) "That's no baby. That's a Mr. Potatohead" I do not speak for SCO, I barely have enough room for my own opinions.
rjd@brunix (Rob Demillo) (03/21/89)
In article <1308@sdcc15.ucsd.edu> pa1132@sdcc15.UUCP () writes: > Federated is left to die on its own. We should >condemn Atari for its irresponsibility! And if Atari can do this to >Federated employees, nobody knows what Atari can do to Atari >employees in the future! Jeez! Calm down...haven't you been paying any attention to this net (oer the newspapers) at all? The Atari-Federated marraige was polluted from the beginning, with the Federated chain doing its best to keep Atari frustrated to begin with. It was a huge money sink for Atari. (A huge drop in profits was reported last quarter because Atari was sinking money into this Federated deal.) Of *course* Atari is cutting them free, any business would. Irresponsibility...'left to die on its own'...what the heck are you talking about...a chain of stores or a woodland creature caught in a bear trap...if anyone can be blamed for loss of jobs at Federated, its the CEO of Federated...they should have upheld their end of the deal. Companies go under...that's big business. Would you rather that Atari spend $40M/quarter floating Federated's losses? - Rob DeMillo | UUCP: ...ima!brunix!brnpsg!demillo Brown University | BITnet: DEMILLO%BRNPSG.SPAN@STAR.STANFORD.EDU Planetary Science Group | Reality: 401-863-3769 "I say you *are* the Messiah, Lord! And I ought to know, I've followed a few!"
mars@athena.mit.edu (Anita) (03/27/89)
We must remember, no matter how idealistic we think it may be, Atari is first and foremost a business. Therefore, in order to improve its current product line, they have to protect themselves. That is why they dropped Federated. Some Federated stores were pushing the Amiga more than the Atari line when Atari still owned Federated, so to Atari I say, Good Move. -Andy aka Sir Hackalot