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Pension Fund Seeks Meeting to Discuss IBM's Problems

December 11, 1992|KATHLEEN DAY and JOHN BURGESS | THE WASHINGTON POST

The nation's largest public pension fund has asked to meet with the outside directors of International Business Machines Corp. to discuss the company's financial problems.

Richard Koppes, general counsel of the California Public Employees Retirement System, known as CalPERS, said Thursday that IBM corporate secretary John E. Hickey said Wednesday that IBM's directors would consider the request at a special board meeting next week.

The pension fund's request for the meeting is significant because CalPERS has been instrumental in forcing the boards of several big corporations to take radical steps to deal with severe financial problems.

IBM has been shedding workers, cutting production capacity and taking multibillion-dollar charges against earnings for the past five years in an attempt to find a new identity in a fiercely competitive marketplace.

CalPERS, along with other pension managers, insurance companies and mutual funds, is one of the nation's largest institutional shareholders and one of IBM's biggest investors.

CalPERS' knock on IBM's door is viewed by some in the investment community as one of the major pressures that has spurred the company to call the special board meeting next week to consider additional measures to deal with its problems. Some industry experts expect the company to announce new staff cuts and write-offs.

In early October, IBM Chairman and CEO John F. Akers met with CalPERS chief executive Dale Hanson to discuss IBM's problems, Koppes said. IBM officials could not be reached for comment.

Also Thursday, federal officials said they expect to resolve a dispute with IBM that has threatened a $1.9-billion IBM pact with the Federal Aviation Administration.

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