Thursday, 16 August 2012

CSC plans to exit Italy? Questions in the Italian Parliament.


 
CSC is planning to sell its Italian business and exit the country, according to sources in Italy.

CSC entered Italy via a series of acquisitions in the mid and late 1990’s but has struggled to establish itself there, suffering significant losses and constantly downsizing over the past years.

CSC’s plans to exit the country have raised questions and concerns in the Italian Parliament.
MP Pier Paolo Baretta has asked the Minister of Economic Development what steps the Ministryintends to take to protect the 1,080 employees of CSC Italy.

Mr. Baretta questioned CSC's decision to sell its Italian business, expressing concerns that "CSC has benefited from years of tax breaks that only last year led to the company obtaining benefits of more than $100 million".
Selling the Italian business may not be easy for CSC even at a low price. The country’s economic outlook is troubled and CSC’s business there is not profitable.   In addition to any price to be paid to CSC, buyers will probably need to fund further reductions of the workforce and strengthen sales skills. Additionally CSC will need to guarantee its contractual commitments to service Italian operations of its key multi-national clients. CSC will also seek to avoid or at least minimizeongoing financial commitment or contingencies towards the buyer.

Is Italy the only European country CSC plans to exit? We doubt it. One must wonder about CSC’s intentions in Sweden, Norway, Austria, Portugal and Spain among others, and how
it intends to support global customers operating in these countries. 

4 comments:

Anonymous said...

Here is link to Pier Paolo Baretta website where he comments in Italian on CSC's plans


http://www.pierpaolobaretta.it/sito/csc-italia-interrogazione-di-baretta-al-ministro-dello-sviluppo-sul-futuro-della-societa/

Anonymous said...

Apart from the Stealth software for the fashion industry, it is hard to see what value there could be for a buyer without access to CSC technology and methodologies.

Fashionista said...

The Stealth software could do well under new ownership.

It has been implemented internationally by many Italian fashion houses. But curiously it never seems to have been promoted by CSC in other countries with a significant fashion industry eg France.

David said...

I can't help observing that the moment of decline for CSC Italy was when the Country President asked the European President (at that time the infamous Laphen) to dedicate himself to an important bid and temporarily relinquish running the country.

Laphen of course declined - wanting both at the same time, with the result that neither the country nor the bid got the attention necessary and the bid was lost.

This bid would have established CSC as a serious outsourcer in the market. From that point onward CSC in Italy would always be seen as a body rental shop with precious few advantages other than that of an occasional American flying in with some specific skills.

The shame of this was that CSC Italy had been a huge success, having been the only country/acquisition to win an Eagle in its first year of operation but, with the departure of the management responsible for the acquisition it got passed around the organisation with Laphen's control being particularly damaging - no thought to development, every thought to cost reduction.