More Cash for Bull

The more things change at Compagnie des Machines Bull, France's largest home-grown computer manufacturer, the more they remain the same. Machines Bull, named for the Norwegian whose punch-card system was the company's first product was deep in debt and floundering in mismanagement when, in 1964, General Electric bought half of the firm for $43 million. Charles de Gaulle had hoped for a "French solution" to Bull's problems, but when none could be found he reluctantly permitted G.E. to buy in. Since then, Machines Bull has continued to lose money. It suffered a $23,243,673 loss last year because of rising costs, inventory problems and penalty payments for slow deliveries that wiped out the benefits of an 11.4% rise in sales to $110 million. To get rid of the red, General Electric has decided to put another $30,200,000 into its Paris partnership.

Actually, the U.S. partner was supposed to put up only half the money needed. But Bull's funds are so low and the French capital market is so depressed that G.E. advanced the entire sum. At De Gaulle's insistence--since G.E.'s share of the partnership until the money is repaid moves up to 66% rather than the 50% it formerly held--Machines Bull is supposed to pay back the advance, with interest, before 1970.

The two companies, doing as badly together in computers as they had been doing singly before their marriage, are not eager to talk about losses or the need for funds. All they will say is that the new money will be used to improve production and research. This means that some is earmarked for improving the memories of Bull's Gamma line of computers in order to increase their capability and make them more inviting to buyers. With some of the rest, the partners must recruit engineers and technicians. Since January, a thousand skilled employees have left the company, unhappy over layoffs and cutbacks and nervous about rumors that General Electric was pulling out.

Eventually, Bull and G.E. hope to get more of the French computer market, which grows at the rate of 20% a year. To do so they must win back Charles de Gaulle, who is so dissatisfied with the American solution at Machines Bull that he is approaching the computer business with a different viewpoint. The French government expects to put at least $112 million in its Plan Calcul, which will help small French computer companies to pool know-how in order to cut a bigger Gallic figure in the field. This obviously will mean more competition for Bull and make its comeback that much more difficult.

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