Diebold Fails To Sell Elections Unit

Diebold Inc. said Thursday it has failed to sell its voting technology business, which is used in elections across the country, amid criticism that its voting machines were not reliable.

Instead, the company said, it will allow the unit to operate more independently, giving it a separate board of directors that includes independent members and perhaps a new management structure.

Diebold also slashed its revenue outlook $120 million for the year for the unit because of delays by several states in purchasing voting equipment and said that will cut the company’s earnings by 27 cents per share for the year.

Diebold said in a statement that it made the decision in part because of “the rapidly evolving political uncertainties and controversies surrounding state and jurisdiction purchases of electronic voting systems.”

Diebold did not rule out the possibility of later selling part or all of its ownership in the realigned company.

“While we plan to fully support this business for the foreseeable future, we feel a more independent structure should allow it to operate more effectively,” said Thomas W. Swidarski, president and chief executive.

Diebold Election Systems has had steady growth in sales and profits, but has become a lightning rod for critics of the reliability of e-voting devices. Critics questioned whether Diebold software running those devices could be manipulated.

Diebold often defended its voting machines and its own business intentions, even after its former chairman and chief executive, Wally O’Dell, sought with little success to convince critics his Republican politics and fundraising for President Bush were not the motive for the company’s involvement in elections.

O’Dell resigned in 2005 and was replaced by Swidarski, who had led Diebold Election Systems.

Swidarski said establishing the elections business as a separate entity will allow the company to focus on its core businesses as a maker of automated teller machines, safes and…