Gateway CEO Inouye resigns

(continued from previous page)

He said company plans to continue with its push into the retail market and believes it will be able to sustain its progress, given that the head of its retail efforts will remain with the company.

The board and Inouye have been engaged in discussions about his departure over the past several days.

"Over the recent days, we began a constructive discussion and here we are today. Wayne chose to resign, and we are moving ahead with the company," Snyder said.

During his tenure as CEO, Inouye brought profitability back to the PC maker. Last August, the company posted its first quarterly profit, after 13 consecutive quarters of net losses.

But the company's stock has fallen nearly 64 percent since it traded at nearly $7 a share in late 2004. Gateway shares closed at $2.51 in regular trading Wednesday.

As part of Inouye's severance package, the former CEO will receive $720,000, which is equivalent to one year of his base salary. And if Gateway pays bonuses to its executives in the first quarter, he will receive a pro rata portion, according to Gateway's filing with the U.S. Securities and Exchange Commission.

Inouye has also agreed to a noncompete arrangement with Gateway that will last through the end of this year, according to the filing.

cameras," Snyder said. "We are focused on being the best PC company."

Snyder is chief executive of Ardesta, a venture capital company he co-founded in 2000. Ardesta, based in Ann Arbor, Mich., focuses on nanotechnology, microelectromechanical systems and microsystems.

Snyder is a familiar face at Gateway. He joined the computer maker in 1991 as an executive vice president and a board director, later assisting Waitt in taking the company public.

He was promoted to president and chief operating officer in 1996 but resigned from the company 18 months later. Despite that, Snyder has remained on the board.

Snyder said he will be focused on working with Gateway's management team and offering direction to the company on an interim basis. But if asked to serve as CEO on a permanent basis, he said he would have to consult with his family on whether he could make such a move.

"I would have to talk to my family...I was approved for this (interim) position. They said it was OK for me to come back and do this job," Snyder said.

[SqlserverCode]

Gateway

Another rat leaving a sinking ship

Gateway will cease to exist very soon
Next one to go is SGI

http://www.otherthingsnow.blogspot.com/

[fjb3341]

Severance?

Why is it that companies and their board of directors feel compelled to offer compensation to CEOs that is just beyond reason.

Nothing is performance based, and to offer a severance to someone who is leaving due to resignation just boggles the mind. Gateway probably doesn't offer their employees such great deals of a year's salary/wages if they quit to pursue other interests.

[jhawk73]

Executive Contracts

I think if you read between the lines he was probably terminated but worked it out to "resign" so he doesn't look bad to future employers. Most big time execs have contracts in place that pay them all of the money owed to them unless they do something very very bad (ie: Enron, Worldcom, Tyco). I don't agree with paying an outgoing exec, but I know if I were offered $750K to walk away I probably would take it.

[209979377489953107664053243186]

Do something different than Dell

To get a part of that consumer market share that Dell has, Gateway needs to give consumers/businesses something that Dell doesn't. "Sparkle" when it comes to computers and laptops means coming loaded with software/hardware that people want and nobody else has. Particularly the business market - their needs today center around securing stored and in transit information.

Such as a package that follows guidelines for firms interested in implementing an overall security plan: http://www.essentialsecurity.com/Documents/article7.htm

For Gateway to become profitable again...

Gateway needs to kill the retail outlets, move back to the midwest where property is cheap, sell directly to consumers, and open up a large factory putting together computers from high quality "off-the-shelf" parts that any decent computer tech could replace or upgrade.

This is the same formula that is making smaller businesses (e.g. Alienware, Falcon Northwest, Totally Awesome Computers) thrive in an environment where Dell dominates. Furthermore, Gateway could take advantage of the principle of "economies of scale," (in a way that isn't available to the smaller competitors) where they could achieve price points and mass production that would nearly rival Dell's price points and production capacity. At the same time, they could offer quality that Dell hasn't even approached since 2001 by giving a product that knowledgeable consumers would love to have because of the quality available in standard parts combined with the modular upgradeability of the parts (without having to dish out two to three times the going market rate for proprietary parts--one of my pet peaves with Dell computers).

[darrius3365]

re:

I thought Gateway closed all of its retail stores when they bough eMachines?

[ebrandel]

There are no more stores

Gateway closed all of its stores in November of 2003 (I believe).

[Inetsec]

Gateway was founded on....

Gateway was founded on "You have a friend in the business," and that a normal person was helping another into the PC world.

I have been a Gateway customer since the late '80's - early '90's. All of the PC's I actually own are Gateway PCs.

Yes Gateway has some issues that have put a dent in the investor / return realm, but none of the issues are insurmountable. In fact if they get back to basics they could actually take on Dell.

Ted bailed due to investor pressure. They (the investors) wanted to dictate rather than rely on the fundamental principals of the company that Ted founded - in his garage.

Once upon a time I even got to speak directly to Ted about an issue that I was having with a PC that was purchased from him. The issue was resolved in 48 hrs via express shipment. Try that nowadays.

My point is that Gateway was founded on personal engagement and caring with the customer - - now severely lacking in the PC equipment world.

If I were CEO of Gateway, I'd have a published email / phone number to talk to my customers directly..... like Ted did in the very early days.... That would save Gateway.

[yacahuma]

Noone is better than Dell (at least in Puerto Rico)

Unfortunately time have change and we have a new market leader,DELL. Try to get support from Gateway, HP or Compaq in Puerto Rico. I dont get to talk to the president of Dell but I can sure get support.

Even today, after reading the news, I chat with a customer representative from Gateway and asked them about what kind of support will I get If I buy a computer from them. They told me , they no longer provide support to PR. That I have to get it from local seller(like Walmart is going to give me any support).

The other day, I needed a replacement installation CD for a Compaq machine. I called tech support and they told me , "sure is only $25.00" , I told them that was great. When I was ready to pay I gave them my address in PR, and they told me they could not ship it to PR. I asked them why not? And they just said that I needed to talk to another support section. After talking to 3 different support sections. I got 2 phone numbers. One of them did not worked and the other only support HP and only for companies and not individuals.

I am a computer consultants and have been in the business all my life( since 7 grade). It is discusting how companies like Gateway and specially HP-Compaq want to sell their products with no support.

To all my customers I only recommend the best,DELL. When I see some fool buying a machine at Compusa,Walmart or Cotsco; I tell them one of my many stories about how bad they are and they quickly leave the machine and call DELL.

If you are a company and give no customer support, expect your bottom line to go to hell and I will make sure to let anyone I know about it.

[laleske]

Dell Bah

Dell may support their machines, but they break at alarming frequency. I've had 6 Dell PC's in the last 6 years. 4 desktops, 2 portables. 5 broke after warranty period over. 3 erased the Hard drives, with backup drives - completely unrecoverable!!!
I will never, ever buy another Dell.
Ps I still have 2 older machines, 1 no name and 1 Hp which are 8 and 10 years old, and still work.

[GaryBB]

Gateway- Corp Mgrs arrogant, rude, dismissive.

I used to think Gateway had it together, made good, reliable PCs, then I bought a dual core PC. Nothing but problems, endless problems. The PC was sent back to Gateway, they "repaired" it, now it demonstrably works worse. They replaced virtually EVERY part other than the power supply - and they clearly did the repairs incorrectly - and that is according to Gateway's own senior tech persons. I then spoke with a corp. mgr. I was utterly shocked at how indifferent, arrogant and rude this mgr was...by contrast, Gateway's tech support is superb. Every tech person I spoke with - and there were many over a 9 month period, was helpful, knowledgeable, friendly and did their best to help.

This manager I dealt with is hopefully not representative of Gateway, for if he is, that strongly indicates they hire and keeps people in management who openly treat consumers as if their problems are irrelevant and they clearly don't feel any obligation to go the distance to help a customer.

This is a prime example of blind corporate indifference. Their product line has seriously slipped into being below the quality of a 5 yr old E-machine.

The way I have been treated by Gateway corp management is astonishingly bad business.