Company gambles move will pay off

The company expects the Columbus plant to eventually employ about 900. Including a Peachtree City customer service center announced last fall, NCR expects the announced moves to eventually bring more than 3,000 new jobs to Georgia.

What remains unclear is whether the company's and Georgia's big bet on a costly move to the state will pay off over the long run.

To induce the NCR move, development authorities in Georgia, Gwinnett County and Columbus offered tax cuts, employee training, industrial facilities and other incentives. Indirectly, recruiters in Columbus even hope to tap into federal stimulus money to bankroll the offer of a shuttered factory. The ATMs the factory will produce are currently made by a contract manufacturer in Columbia, S.C.

Many companies "are rethinking outsourcing, especially with core products," said Peter Ward, a management sciences professor at Ohio State University's Fisher College of Business. NCR and other companies are beginning to bring production back in house as a way to protect their patents and speed up product launches, he said.

Hit hard by downturn

NCR is the world's leading maker of bank ATMs, grocery scanners and other high-tech transaction devices. Lately, those products haven't exactly fueled a growth boom. After a string of acquisitions and divestitures, NCR's 2008 revenue of $5.3 billion is less than its 1996 total.

"They've got a cyclical downturn, and it's maybe more than that," said Thomas W. Smith, an equity analyst with Standard & Poor's.

NCR was hit doubly hard by the financial crisis and recession of the past two years. The troubles on Wall Street withered demand among banks for ATMs. The recession on Main Street dried up retailers' demand for store check-out scanners.

NCR also shrank because of a big split less than two years ago, when it spun off its Teradata division to its shareholders. The so-called "data warehousing" company, now separate from NCR, allows clients such as Wal-Mart to create and mine huge databases on customer transactions and other data.

Today, Teradata's market value, $3.9 billion, is more than double NCR's $1.7 billion, even though it's smaller in terms of revenue and employment. Shortly before the split, Standard & Poor's bumped NCR off its S&P 500 index in favor of Teradata.

Smith, though, said NCR remains a "solid blue-chip operation" with long-term demand for its ATMs and other key products. He said NCR is also looking for future winners. One could be a recently announced partnership with the Blockbuster video chain to install self-service DVD rental kiosks in grocery and convenience stores.

"It could be big," said Smith.

NCR believes it already has a winner in the latest "intelligent deposit" ATM slated to be produced for the U.S. market by the Columbus plant. The company said the ATMs, which scan deposited checks and give bank customers a copy, accounted for 70 percent of its new ATM orders in the U.S. last year.

Successes

and stumbles

Over the decades, said Ohio State's Ward, the company has occasionally struggled to adapt to big changes in technology, such as the shift from mechanical cash registers to computerized ones.

"The first 75 years they were ahead of the curve," he said. "The last 50, they've been chasing."

Still, a quick review of NCR's history shows the company had to be nimble to survive at all.

The company was launched in Dayton in the early 1880s by John Patterson. He and his company soon gained iconic status in Dayton for their generous, paternalistic reign over the city.

When a serious flood hit Dayton in 1913, Patterson told his employees to build boats in the company's shops to rescue people, according to the Dayton Daily News. When the U.S. Army planned to close a local airfield in the 1920s, Patterson and other company officials led a campaign to buy and donate land for what eventually became Wright-Patterson Air Force Base.

By then, NCR-made cash registers rang up 90 percent of the country's sales, and the company was a Wall Street darling. But in the late 1960s, it stumbled when it failed to automate its cash registers and other core products, even though it had begun venturing into the computer business as early as 1952.

Not long after, NCR slashed its work force in a cost-cutting move to buy time while it adapted with new technology and products — a pattern that would continue in later years. A hostile takeover by AT&T in 1991 was followed by heavy losses and more job cuts. NCR became a separate company again when AT&T spun it off in 1996.

"When I came in 1969, there were 29,000 people here," said Gordon Meister, who joined NCR out of high school in Cleveland, later moving to its Dayton headquarters. He worked there 45 years, rising to vice president of marketing over one of its divisions.

Dayton exit

inevitable?

Over the years, he said, NCR's presence in Dayton diminished to 1,300 employees as the company shifted manufacturing and other functions to other locations.

For instance, NCR opened a big plant in Duluth in the early 1990s when it moved a scanner factory there from Ohio. That factory was later turned over to contract manufacturer Solectron, which ultimately moved over half of the 1,500-plus jobs to Mexico. Other operations moved to Georgia in later years, said Meister, who retired in 2003 and now heads an association of retired NCR employees.

"I made a lot of trips to Atlanta," he said.

It became increasingly clear that NCR's Dayton roots were withering when William Nuti was named chief executive in 2005 and never moved to Dayton, instead working from executive offices in New York.

NCR's top executives "have been less of a player [in Dayton] in the last five or seven years. They don't go to the Rotary clubs because they are not here," said Meister. If few of the top executives live in Dayton, "obviously there's not going to be a whole lot of feeling" to keep the headquarters there, he added.

An NCR spokesman said Nuti will remain in New York and the company will continue to maintain its executive offices there, partly to remain close to key customers such as major financial institutions.