Product Abandoned By Digital

The New York Times

February 12, 1985

The Digital Equipment Corporation, responding to reports that one of its key manufacturing facilities was being dismantled, conceded yesterday that it has ceased production of its Rainbow personal computer.

The move appeared to mark the company's admission of defeat in its effort to break into the personal computer field dominated by International Business Machines Corporation and Apple Computer Inc., among others. But officials of Digital, the world's second-largest computer maker, hinted late yesterday that they might eventually make another attempt in the field.

Last week, the manager of a Rainbow assembly plant in Westfield, Mass., which employs 1,300 to 1,500 workers, sent out a memorandum saying: ''A number of Digital plants flatly do not have enough to do today, nor will they in the future. We are one of those plants.''

While stressing that Digital remained committed to its longstanding policy of no layoffs, the memo appeared to urge workers to seek jobs elsewhere and offered them help in their job search.

''They made it clear they want us out the door and gone,'' said one employee who asked not to be named.

Bill Hanson, Digital's vice president of manufacturing, said in a telephone interview late yesterday that the Westfield plant was ''switching over to an unannounced product,'' which industry experts predict is the company's Microvax II, a microcomputer. He said that workers would be retrained or transferred to other jobs in Digital, but added ''if someone had an opportunity outside the company, we might not discourage that.''

Worldwide, Digital has 30,500 manufacturing employees, all but 8,000 of them in the United States. The total is down 1,600 from last June, and Mr. Hanson said that ''in the next year or so I hope the number will come down a few thousand more.''

Yesterday, both Mr. Hanson and a Digital spokesman said they feared that the memorandum had given workers an incorrect impression that their jobs were in jeopardy. ''I think it was ill advised,'' Mr. Hanson said. ''It paints a picture that is not as accurate as it should be.''