Frank Cary, chairman of International Business Machines Corp., yesterday attacked the Justice Department for dargging out its nine-year-old antitrust case against the company.
At IBM's annual meeting here, Cary said the case has outlasted six attorneys general, and "it has been three years at trial. And we have not yet had a chance to begin our defense.
"In all this time, the IBM company has not been dragging its feet," Cary told some 1,500 stockholders. "Despite IBM's repeatedly announced readiness to go to trial, the antitrust division asked for delays - twice in 1972, twice in 1974 - and then in 1975 they amended their complaint to include some totally new charges.
"Finally the trial began. And now almost three years later, they have fielded a brand new legal team that is trying to start all over again," he added.
Cary denied reports that IBM dumped 30 tons of paper on the antitrust Division in an attempt to delay the trial. "Nothing like that ever happened," he said. "In fact the division has taken almost all of the documents from those selected by other plaintiffs in other suits against IBM.
"This is not only the biggest antitrust case in history," Cary said in an apparent reference to the many changes in the government staff. "It's the first case with unlimited subsitution."
Cary said that not one of the computer systems manufactured by IBM today was on the market when the antitrust suit began.
He also defended IBM's stance on the major allegation of monopoly in that suit by saying that the computer industry today "includes more than 4,000 companies . . . and of the more than 800 of these companies that were deposed in the Justice Department suit, over 200 entered the industry since the suit began."
IBM attorneys have been instructed to present their case, when the times comes, "as crisply and expeditiously as possible," Cary said.
"We have always been opposed to delays," he claimed "We believe we are right. We want to get this over with."
Turning to the financial performance of the firm during the past year, Cary said that in 1977 "all over U.S. marketing divisions exceeded their original plans, as did overseas subsidaries. As a result of that record performance, we have the largest order backlogs in our history."
Consequently, "We have been operating manufacturing plants on three shifts and expanding our capacity," he told the stockholders. Cary said IBM is increasing its investment in manufacturing to meet the growing demand. In the two-year period of 1977 to 1978 the firm is adding 10,000 person to manufacturing as part of its efforst toward added capacity, Cary said.
"These actions will increase our production substantially in 1978 over 1977," Cary said. "Round the world our manufacturing plants will make 60 percent more large and small computer systems, 80 percent more terminals, and 200 percent office systems."
In response to shareholders' questions, Cary said that in 1978, up until April 17, IBM had purchased back some 4.5 million shares of stock for all company programs, including the employe stock purchase plan and the executive stock option plan. The cost of the buy-back was $1.2 billion, at an average price of $270 a share, including fees, he said.
With regard to a previously announced plan to buy about 2.5 million shares under a special repurchase program aimed at holders of small blocks of stock, Cary said he expects to reach 2.5 million this month or next.
Previous company statements indicate that something less than 2 million shares already have been repurchesed under that program, leaving an estimated 500,000 more shares to be bought back by IBM in the coming month.
In other actions at the meeting, corporate annual meeting gadfly Evelyn Y. Davis criticized IBM for contributing $750,000 to the National Gallery of Art in Washington toward funding an art exhibit from East Germany.
Cary defended the donation to what he called an "outstanding exhibit - the first exhibit of art from behind the Iron Curtain in many years." He said little or no benefit accrues to the East Germany government because of the donation.
Other stockholders criticized the firm for doing business with South Africa. Cary responded by saying that the company is honoring any and all U.S. government embargoes there, but is still allowed to service existing IBM equipment.
Cary reiterated a previous statement that "IBM would not bid any business where we believe our products are going to be used for repressive purposes." The stockholders defeated a proposed amandment to the corporate by laws that would have called on IBM to investigate the use of its computers by South American countries charged with repressive practices.
In response to other questions, Cary denied that IBM is planning to diversify into general aviation business, and said that IBM has a fleet of eight corporate airplanes and one helicopter, but no "hunting lodges, vacation homes or apartments for directors or officers."