Just as in nature it is sometimes difficult to shove a young bird out of the mother's nest to fly on its own, so the divestiture of IBM's Information Products unit into Lexmark was not an easy feat to accomplish, even though top management at IBM felt that the corporation's strategy had to leap beyond a rather mature typewriter market also eliminate the potentials of the printer and keyboard market. At the time of the separation, employees in Lexington knew of the financial difficulties of their parent company. They figured the Lexington Plant, which had been making typewriters since 1956 and printers since the early 1980s would be closed or, perhaps, sold to the Japanese. Instead, they were introduced to long-time IBM Vice President Marvin Mann as the new CEO of an independent Lexmark Company, backed by New York financial people. The "deal" was that Lexmark would continue to manufacture IMB brand desktop printers, typewriters, related products and keyboards until 1996 (six years down the road from this announcement) and then move into competition with its own brand name.
While the products the new Lexmark made were a truly small percent of the total market, the greatest immediate problem was the concern of employees about their tenure. They were given two options -- to remain with the new company or to take an IBM-approved buy-out -- a cash settlement upon their leaving. However, the real safety umbrella -- a lifelong career with IBM was now in jeopardy, of course. In addition, there surely was concern whether founder Thomas Watson's and Thomas Jr.'s insistence on excellence would continue as the company now ventured out on its own. Would IBM's policy of promoting from within continue? In other words, would the "personality" of the former parent continue to influence the decisions, the staffing, and the innovations of its product line?
The decision to spin off Lexmark made perfect economic sense to IBM: Its core bu...