Diebold Exits US Voting-Machine Business
Now keep in mind that this story comes from "Dow Jones" - A News Corp company so you Black Quasi-Socialist Progressive-Fundamentalist Racism Chasers must take it with a grain of salt. Or at least until Keith Olbermann tells you that it is the truth.
By Veronica Dagher
Of DOW JONES NEWSWIRES
Diebold Inc. (DBD) has sold its money-losing U.S. election-systems business, just seven years after acquiring it amid hopes of rising demand for voting technology upgrades in the wake of the 2000 presidential election fiasco.
Diebold, whose main business is making automated teller machines, said Thursday it sold the voting-machine unit to privately held Election Systems & Software Inc. for $5 million, about one-fifth of what it paid in 2002.
"There were assumptions we made in that space that didn't materialize," Diebold spokesman Mike Jacobsen said, referring to the fact U.S. municipalities didn't adopt standardized voting systems.
Problems with paper ballots in the presidential election in 2000, which delayed the final tally and generated concerns about the legitimacy of the outcome, sparked calls for improved election systems. A federal law was passed in 2002 to provide states $2.32 billion to make required voting-technology upgrades, and industry watchers had expected standardization to follow.
Standardization - in which all voting districts would use machines built to the same specifications - would have cut down on costs of customization, but guidelines were never finalized.
Diebold, which was the industry's biggest maker of electronic voting machines heading into the 2004 presidential election, was in the spotlight as concerns increased about the reliability and security of the electronic systems.
Diebold also suffered from a perception problem when the company's then-Chief Executive Walden O'Dell very publicly supported and fundraised for President George W. Bush in his re-election campaign.
In early 2006 the company, based in North Canton, Ohio, identified the voting-systems business as non-core and started exploring a possible divestment. It essentially separated the business from the rest of Diebold in August 2007, renaming it Premier Election Solutions. Since then, Diebold maintained only a financial interest.
In the second quarter, revenue for Premier Election tumbled 65% to $9.6 million, a fraction of Diebold's total revenue for the period of $700.5 million. The company wouldn't specify how much it lost in the elections business.
Diebold will record a pretax charge of $45 million to $55 million as a result of the sale. The company's Brazilian voting systems subsidiary isn't affected by the Premier Election sale.
Diebold shares gained 2.2% Thursday to finish at $30.69.
Election Systems & Software, based in Omaha, Neb., said in a release that the combination with Premier Election will allow each business to serve jurisdictions more effectively.
Wedbush Morgan Securities analyst Gil Luria said the U.S. elections business is past its 2006 peak, when municipalities were stocking up on election equipment. Luria estimates the U.S. elections industry to be a $200 million to $300 million a year business. (Blogger's note: Did you all see the word "Wed-BUSH"? I told you that BUSH had something to do with this mess.)
He said Diebold's exit leaves the top privately held competitors - Election Systems & Software and Sequoia Voting Systems - room to gain market share. "There could be more consolidation in the space," Luria said.
It don't matter that the Republicans STOLE the elections of 2000 and 2004. We got BARACK OBAMA IN OFFICE NOW!!!!
(Notice to myself. I violated my own compartmentalization rules. This type of sarcastic story was only suppose to do go the "Parallel Hood" blog. Shame on me. I couldn't resist.)
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