We are Japanese if you please

It was a moment to savour. There, in the unlikely setting of London?s Chiswell Street brewery, the imperial head of one of the world?s largest companies was being grilled by an appositely red-nosed hack.

At first, Takuma Yamamoto, president of Japanese electronics giant Fujitsu, feigned not to have understood the question. But the irascible quidnunc was having none of it. ?So how much do you personally earn?? he demanded again.

Even when a Fujitsu aide interrupted, brusquely pointing out that the conference was intended to discuss the company?s acquisition of the UK?s ailing computer giant ICL and that the chairman?s pay packet was simply ?not of interest?, the determined journalist stood his ground.

?I?ll decide what my paper?s readers are interested in,? he snapped back defiantly. ?If Mr Yamamoto doesn?t want to say how much he earns and what he gets out of this deal, then he should just say ?no comment?.?

It was a frosty moment, quickly passed over. But eight years later the reporter?s question still has some resonance, albeit on a higher plane. Today, the issue is not so much the Fujitsu chairman?s personal wealth, but exactly how the acquisition has contributed to the company?s bottom line.

Let?s look at it another way. Fujitsu shelled out about #743 million when it acquired the majority of ICL?s shares in 1990. This seemed a huge price at the time, but it may eventually come to be viewed as insignificant when compared with the huge strategic advantages that the acquisition delivered to the Japanese giant. Even more importantly, there is the question of just how good the Fujitsu deal has been for ICL?s hitherto highly loyal band of users.

Fujitsu?s acquisition back in 1990 was certainly a pivotal moment in the history of ICL ? a history that over the past 30 years or so has encompassed many of the UK?s industrial hopes and dreams.

The story stretches right back to the 1960s, when then prime minister Harold Wilson famously pledged that the nation would prosper and flourish in the ?white heat of scientific revolution?.

ICL was the homespun champion of IT and stood at the very forefront of that initiative. It was also a counterbalance to the growing dominance of IBM and its fellow computer players in the US, known as the seven dwarves.

Somewhat ironically, ICL owed its genesis to IBM. As far back as 1908, a little known US firm called the Tabulating Machine Company granted an exclusive licence to the British Tabulating Machine Company to market its punched card devices here and throughout the Empire. The US company ultimately became IBM and its British counterpart evolved into ICL.

ICL?s true formation, though, came about only in 1968. The Wilson government, elected four years earlier, had pledged to strengthen the British computer industry by precipitating the merger that led to ICL?s creation.

Wilson was trying to bring order to the chaos of competing British computer firms, which included the likes of Ferranti, Elliott Automation and Leo. He encouraged the new company ? itself an amalgamation of ICT and English Electric ? to build a new range of computers for the 1970s.

It was a move that cost the government dearly, obliging it to cough up some #40 million of taxpayers? money in launch aid alone.

No sooner had ICL?s new range become reality than ? as so often happens in the IT industry ? the technological focus changed, especially now that IBM had astounded the industry with the launch of its System/360-compatible range of computers.

Despite all this, these were halcyon days for some at the company. One former engineer, who has retired but still keeps in regular contact with current ICL staff, recalls: ?In those days, the company had a very paternalistic attitude. The staff were treated like one big family.

?After Fujitsu took over, everything changed. With the recession that came later, it was probably inevitable that this would happen anyway. But after Fujitsu?s acquisition, it seemed that everything was rationalised and reduced to the lowest common denominator of profit.?

Even before Fujitsu took over, ICL?s cosy camaraderie had been threatened and the bubble was set to burst. Indeed, by the late 1980s, ICL was truly in the financial mire, raising shareholder concerns that something had to be done.

STC, then ICL?s main equity holder, had already climbed into bed with Fujitsu, collaborating with it on mainframe processor technology. It seemed only natural that the Japanese manufacturer should want to acquire ICL. The takeover announcement soon sent shock waves through the UK establishment.

The acquisition meant different things to each of the two companies involved. For ICL, the deal meant a parent with far deeper pockets, while for Fujitsu, it provided quick access to a substantial UK customer base and the potential to penetrate further into Europe.

After all, ICL was one of a triumvirate of European IT companies ? along with France?s Groupe Bull and Germany?s Siemens Nixdorf ? that provided a bulwark against US, and, to a lesser extent, Japanese, technological superiority. When major public contracts and EC grants were up for grabs, it was no surprise when ICL, Bull and Siemens won ? especially if the contract was on their home turf.

One continuing legacy of this is ICL?s prominence in Whitehall and the public sector. Some wonder how long the company can play the patriotic card, now that it is under Japanese ownership.

But as Ron Condon, a veteran ICL observer, points out: ?Since Fujitsu took over, it has poured #1 billion into the company. That must count for something among users.?

At its peak, in the early to mid-1990s, ICL employed close to 30,000; today, staff numbers have dwindled to around 19,000.

Meanwhile, mainframe revenues ? once the core of its profits ? have shrunk to just 5% of turnover. Under Fujitsu, all the manufacturing facilities have been axed and even ICL?s prestige headquarters overlooking the Thames at Putney are up for sale.

The company?s PC lines have been subsumed under the flame-red Fujitsu logo, along with ICL?s Teamware software, while other less profitable divisions have been hived off. Like so many born-again enterprises, the modern ICL has become a systems and services company.

ICL is now a pale shadow of Harold Wilson?s original dream of a UK computer manufacturing giant. Moreover, only now does the company look like pulling back from the profit nosedive that has characterised performance in recent years.

For Labour statesmen such as Tony Benn, who as Wilson?s technology minister back in the 1960s supervised the creation of ICL, the company?s decline as a British manufacturer was inevitable with Fujitsu at the helm.

It was not just that another national asset had been lost, but the sale reflected the UK?s downward spiral as a world-class manufacturing force.

As Benn lamented at the time: ?When I was minister, we put a lot of time and money into ICL. To lose all that and make it little more than a branch plant of a Japanese company is foolish in the extreme.

?Before long, all we will be left with is whisky and clog dancing.?

Meanwhile, any remaining hopes that ICL might revert to something like its former self once it has been floated on the London Stock Exchange as a public company looked optimistic.

Initially, Fujitsu pledged to float the company within five years of its acquisition, but the deadline has been repeatedly put back. The latest date for flotation is the year 2000, when Fujitsu will still retain a majority shareholding.

Despite all this, today?s ICL users remain stubbornly loyal, conjuring up visions of India colonialists clinging to the fiction of British rule long after the Union Jack has ceased to flutter. But who?s to say they?re wrong in remaining loyal?

Chris Walker, chairman of the ICL User Association, points out that new chief Keith Todd, who was appointed after Peter Bonfield jumped ship to join BT, has made strenuous efforts to revamp the company?s image, as well as to restructure the company from top to bottom.

This single-minded strategy appears to be paying off.

Todd is on record as saying recently: ?No plan I have ever presented to Fujitsu has been turned down. We have been able to build a great relationship with the company.?

In two months? time, Todd is expected to announce a further shake-up of the remaining nine business units, and Fujitsu?s identity will take more of a back seat. This summer, ICL?s high performance group will mark 50 years of computing by commemorating the company?s early connections with Manchester University and its pioneering Mark 1 computer. The celebration will also serve as a subtle reminder of the company?s British pedigree ? something which could prove useful if a London Stock Exchange listing is in the offing.

Walker himself is a stalwart VME mainframe user as IT head for Northumberland County Council. He says: ?It?s unlikely that ICL would have been able to plough the same amount of investment into R&D that Fujitsu has. In fact, in view of all the changes that have taken place in the computer industry, I don?t see how ICL could have survived without Fujitsu?s backing.?

At ICL, spokesman Neil Pattie is naturally upbeat about the company?s future, stressing that it has become a multi-vendor operation.

?We have undergone a massive restructuring in the past five years,? he says, ?and our sole aim now is to meet customers? requirements. If that happens to be Fujitsu, great. But we won?t push it.?

Otherwise, he says, ICL retains an ?arm?s length? relationship with its Japanese parent: ?We have the benefit of its sales channels in other parts of the world plus the obvious advantages that stem from its R&D budget.?

It?s an alliance whose fruits include the recent launch of ICL?s migratory Trimetra platform, offering the option of Unix, NT and VME architectures. ?But we?re still very much ICL,? insists Pattie. ?There?s no way our identity has been gobbled up.?

As dedicated Star Trekkies might remark, it is ICL ? but not as we know it, Harold.