A Pioneer Goes Bankrupt

Adam Osborne called himself the Henry Ford of personal computers and predicted his company would have sales of $1 billion by 1984. For a time those boasts seemed correct. He developed the first successful portable computer, the Osborne 1, packaged it with three popular programs, and sold the machine for an unusually low $1,795. Last year Osborne Computer rang up sales of about $70 million. But the firm could not maintain its success. In the past week it filed for protection under Chapter 11 of the Bankruptcy Code. While Osborne had virtually no income, it owed suppliers $45 million.

Osborne's problems began surfacing early this year. Anticipation of a new model called the Executive killed demand for the Osborne 1. When the new model could not be delivered on time, dealers canceled orders. Then development of an IBM-compatible version of the Executive was also delayed. Adding to Osborne's problems, a dozen companies are now turning out portable models that are more advanced than his pioneering machine. Sales slumped from about 10,000 in February to around 100 in April. Plans for a public stock offering were abandoned. Attempts to find new investors or someone to buy the company failed. Earlier this month, all manufacturing was halted, and 400 workers were laid off.

Osborne, of course, is not the only personal-computer maker having troubles. Victor Technologies of Scotts Valley, Calif., last week laid off 350 workers and announced it expects to lose money in the third quarter. Coleco, based in West Hartford, Conn., once again delayed delivery of the Adam, its new $600-to-$700 computer system, raising questions as to whether the product would be shipped in time for the Christmas selling season.

Osborne Computer, though, had some unique problems. Insiders explain that its founder, while savvy and brash, was undisciplined. Says one: "Adam was always supremely confident. For him to desire something was quite enough, and the fact that it didn't exist didn't matter." Critics say his impulsive demands were enough to propel the company for the first year, but he lacked the management experience to run a larger company in a highly competitive field.

In January, Robert Jaunich II was brought in from Consolidated Foods, where he was president, to become chief executive officer. He found it difficult to adjust to the industry's fast pace and gained a reputation in the company for being aloof and ineffective. The firm's lack of basic financial controls or enough experienced managers finally proved fatal.

Early this month Osborne himself resigned, and by last week only 80 employees remained on the payroll. Osborne left behind his name on the door and a reputation for quirky brilliance frozen at a moment in time. This file is automatically generated by a robot program, so viewer discretion is required.