The Companies: Two in Pursuit Of a Turnaround

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Like dieters, corporations always launch into restructuring programs with grand hopes. But the speediness of the results ranges widely, as illustrated by two giant Midwestern companies that have gone through drastic reorganizations. While a streamlining program enabled Control Data, the computer maker, to bounce back from near bankruptcy faster than almost anyone expected, a similar process at Firestone Tire & Rubber has proved frustratingly slow in restoring the company's vigor. Their stories:

A COMPUTER FIRM REBOUNDS

Little more than a year ago, Control Data looked like a high-tech has-been. The Minneapolis-based company was piling up a staggering 1985 loss of more than $567 million (revenues that year: $3.7 billion). Bankers were refusing to extend the company any more short-term credit, while Wall Streeters were whispering that the firm might have to seek Chapter 11 protection. But today Control Data is running smoothly again, thanks to an overhaul in which the company dumped unprofitable sidelines, sharpened its focus on computer technology and cut its payroll from 54,000 at the end of 1984 to 34,000 in 1986. "This is one of the most dramatic turnarounds that I've ever seen," boasts John Buckner, Control Data's chief financial officer.

Control Data got into trouble by developing "corpocracy," or corporate bloat, at a relatively early age. William Norris, a former Sperry Rand general manager who started the company in 1957, had managed by the early 1960s -- with a staff of only a few thousand employees -- to take the industry lead in building high-speed computers for scientists and engineers. But as the company grew and prospered during the 1970s, the founder's interests began to wander toward wide-ranging and public-spirited ventures that diverted money and managerial attention. The company built factories in low-income regions like Appalachia, tried to develop a technique for farming in rural Alaska, and ventured into insurance and consumer finance, among dozens of other pursuits.

Control Data could afford to support its social conscience during good times, but when the computer industry slumped in the early 1980s, the company nearly collapsed from the weight of its commitments. Control Data's distracted managers were neglecting the firm's core technologies, like data-storage devices, while competitors raced ahead. The company's worldwide share of the market for disk drives reportedly plunged from 55% in 1980 to about 20% in 1985. The computer maker feverishly began cleaning house in 1985, not long before its financial squeeze. The company proceeded to discard some 20 businesses that were too far removed from its basic field. The biggest divestiture came last October, when Control Data sold off 80% of its Commercial Credit subsidiary, a financial-services firm, for $523.9 million.

Control Data's massive layoffs created culture shock for employees because the company had been so progressive in its benefits, including day care and family counseling. The remaining employees gamely cheered one another by wearing buttons that read IT'S O.K. TO SMILE. One of the thousands who left their jobs was Norris, who gave up the chairman's post in January 1986 at age 74 to let his successor Robert Price have a freer hand in dismantling the founder's overgrown dream.