Olivetti Operation Skirts Woes Distance, Profits Insulate Plant From Parent’s Trouble

Distance and steady profitability have insulated Spokane-based Olivetti North America from the woes besetting its Italian parent, Chairman Ted DeMerritt said Tuesday.

But concerns about Olivetti SpA’s mounting problems have increased, he said, and a previously arranged travel itinerary was expanded to include additional visits with customers.

“It’s disrupting and distracting,” DeMerritt said in a telephone interview conducted while he awaited a plane east from Chicago.

Controversy has enveloped Olivetti since Sept. 3, when Chairman Carlo De Benedetti resigned under pressure. The company’s chief operating officer followed him out the door a day later.

Since then, Italian authorities have challenged the accuracy of Olivetti’s financial statements, and the value of its stock has plummeted more than 40 percent.

A $292 million loss in the first six months of 1996 continued a skid that started in 1990, one year after Olivetti bought ISC Systems Corp. and made its Liberty Lake building the headquarters for operations in the U.S. and Canada.

Olivetti North America employs almost 500 in Spokane. The company sells specialized computer systems to banks and other financial institutions, and also services satellite ground stations for companies like Hughes Network Systems.

DeMerritt said revenues have provided enough capital to make Olivetti North America self-sufficient.

And the sheer distance from Olivetti’s headquarters in Milan has prevented North American officials from becoming over-dependent on support from the parent company, he said.

Spokane employees, though aware of the difficulties in Italy, know they must stay focused on keeping clients happy, DeMerritt said.

“We have customers, commitments and a job to do,” he said.

DeMerritt said partnerships under consideration in Europe may enhance Olivetti’s personal computer business, its most troubled division. If not, alternative supplies to meet customers needs have been assured, he said.

He predicted that Olivetti’s new management and business strategy will, in the long run, create a stronger company.

, DataTimes