Burroughs Announces New Company Name

By Calvin Sims
The New York Times

November 11, 1986

The Burroughs Corporation and the Sperry Corporation, which agreed to merge five months ago, yesterday announced the name for their new company. The computer maker will now be known as the Unisys Corporation, its chairman, W. Michael Blumenthal, said yesterday.

The name (pronounced U-ni-sis) was selected over 31,000 names submitted by employees of both companies. Derived from the words united, information and systems, Unisys was submitted by Christian Lee Machen, a software systems manager in Atlanta who received $5,000 for the entry. The entries were evaluated by Anspach, Grossman, Portugal Inc., an identity consultant company.

In an announcement at the company's headquarters in Detroit, Mr. Blumenthal said the name signifies that the companies are solidly one. Mr. Blumenthal has argued that the $4.8 billion merger of the two companies would provide the economies necessary to compete with the International Business Machines Corporation in the mainframe market.

Proceeding Ahead of Schedule

Many computer analysts have doubts that two companies like Sperry and Burroughs with decidedly incompatible computer lines can make a merger work, but most agree that to date the merger has proceeded at or ahead of schedule, especially in its cost-cutting efforts.

''Their first steps in this merger have been more aggressive than was generally perceived,'' said Stephen P. Cohen, a computer analyst at the Gartner Securities Corporation, an investment research firm in Stamford, Conn. ''So far, they have taken all the right steps and then some.''

Mr. Cohen cited the company's plans to reduce its work force by about 10,000 employees, which he said was a much larger reduction than expected. As a result, the company expects a much higher savings than the $150 million originally projected.

The company also plans to complete the proposed sale of $1.5 billion in assets that are not essential to the core information processing and defense businesses before its target date of December 1987.

Assets Up for Sale

Last week, Burroughs agreed to sell part of its Memorex disk-drive division for $550 million to company executives. In addition, Sperry has received several bids for its aerospace and marine group.

Analysts also said the companies have lost little of their customer base since the merger, contrary to earlier forecasts that customers would flee to I.B.M. fearing that product lines would be discontinued. The management of both companies has begun addressing the concerns of customers who have expressed uncertainty about the continuance of certain products.

Mr. Blumenthal emphasized the company's commitment to protect consumers' investment by continuing both the Sperry and Burroughs architecture. Both lines of computer products will be marketed under the name Unisys but will each keep their product designations.

Servicing Costs Cut

In addition, the costs of servicing the company's $3.4 billion debt resulting from the merger have been reduced by lower interest rates.

But analysts warned that the company was still in the transition phase of the merger and that the long-term results would not be evident for another year.

A key issue facing Unisys is whether it can sustain the high costs of developing both product lines as a means of retaining customer loyalty. The development of both product lines, analysts said, will eventually take its toll, forcing the company either to discontinue some products or to develop a line of successor products compatible to both.

To promote the name, the company plans to begin an advertising campaign today that features the slogan ''The Power of#2,'' which the company hopes will illustrate the combined strength of Sperry and Burroughs.

STAKE IN BURROUGHS CUT

WASHINGTON, Nov. 10 (Special to The New York Times) -Warren E. Buffet, the investor based in Omaha, said today that he had lowered his stake in the Burroughs Corporation from 10 percent, to 3.1 percent. In a filing with the Securities and Exchange Commission, Mr. Buffet said he sold 1,996,500 Burroughs convertible preferred shares between Oct. 27 and Nov. 7 for prices ranging from $51.37 to $54.37 a share. Mr. Buffet gave no reason for the sale.