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Cautious and Upbeat

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November 19, 1999|Jonathan Gaw

With his company struggling in an intense price-cutting industry, Western Digital Corp. Chief Executive Charles Haggerty on Thursday addressed a roomful of frustrated but subdued shareholders in what is likely to be his last annual meeting. Fielding numerous shareholder questions, some of them chiding, about the company's gloomy prospects, Haggerty gave a cautious, upbeat diagnosis, although he repeatedly declined to say when the computer hard drive manufacturer might break a streak of eight quarterly losses. He chastised competitors for instigating a two-year price war that has caused losses for every manufacturer of hard drives for desktop computers, warning that "it may be a while before we see a truce." The Irvine-based company has lost $952 million over the last eight quarters and has been cutting costs by outsourcing several functions and shifting its manufacturing facilities from Singapore to Malaysia, where labor costs are lower. Haggerty, who plans to retire next year, said the cost-cutting may not be over, but declined to specify areas that may be targeted. Several shareholders, upset at the company's plummeting stock, said Thursday they would like to see the company sold. "It would just seem to me they need to line up with someone with deeper pockets and better distribution," said Michael Napoli, a shareholder from Santa Monica. Haggerty, citing company policy, declined to discuss potential buyout rumors. The stock, which has lost nearly 75% of its value this year, closed unchanged Thursday at $3.94 a share.

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