Commodore Executive Rift Denied As Tramiel Quits – New York Times

jack-tramiel-atari-august-1984The chairman of Commodore International Ltd. denied yesterday that a dispute with directors had led to the unexpected resignation late Friday of Jack Tramiel, Commodore’s hard- driving and mercurial founder.

”Jack has been working unceasingly here, and he was just tired,” Irving Gould, the chairman, said in a telephone interview. ”But the company is now more than just Jack. If we have made a wrong decision here, the bottom line will show it – but based on the current momentum of the company we are confident that is not the case.”

Commodore officials said they hoped to announce the successor to Mr. Tramiel – who was president and chief executive, as well as a director – by the end of the week. The successor has been chosen, and is described as being the president of a company ”with worldwide operations” who has been an associate of Mr. Gould ”for several years.”

Mr. Tramiel, who owns about 7 percent of the company, resigned in the midst of Commodore’s greatest success. In the past year, the company has used its manufacturing muscle to keep down the cost of its home computers and to drive many competitors, including Texas Instruments and the Atari unit of Warner Communications, into losses of hundreds of millions of dollars. Last Monday, just a day before Mr. Tramiel reportedly made the decision that led to Friday’s announcement, Commodore officials said the company would report earnings of more than $100 million for last year on sales of more than $1 billion.

Still, company officials and industry analysts agreed yesterday that they expect Commodore stock to plunge this morning, primarily because Mr. Tramiel has been so closely associated with the cost-cutting strategy that raised the VIC-20 and Commodore 64 computers to prominence.

”I think there will be a reaction temporarily,” said Barbara S. Isgur, vice president of Paine Webber Mitchell Hutchins and an analyst of the home computer market. But Mrs. Isgur and others said that in the past year, Commodore has deepened its management and strengthened its two weakest areas: quality control and the development of the software necessary to make its computers useful to a wide range of consumers.

Commodore closed at $47.75 on the New York Stock Exchange on Friday, before the company’s announcement. It reached a high of $60.625 last summer, and fell as low at $29 during the collapse of the home computer market in the fall.

”I am not looking for any calamity,” said Mrs. Isgur.

In his 25 years with the company, current and former employees said, Mr. Tramiel ruled with an iron hand. The computer and consumer electronics industries are littered with ex- Commodore employees who differed with him, including several executives who, it seemed, were being groomed as his successor.

”We have a definite way of doing things,” Sol Davidson, general manager of Commodore’s United States subsidiary, said last week. ”Those who don’t convert don’t remain.”

Some in the company suggested yesterday that it was necessary for Mr. Tramiel to step aside before a successor could be brought in. Mr. Tramiel, who is 55 years old and a concentration camp survivor, said in in the statement Friday that he was resigning ”for personal reasons.” He said he would remain a consultant to the company. Mr. Tramiel was not at his home in California yesterday and a company spokesman said he was not available for comment.

Yesterday, Mr. Gould discounted widespread speculation that he had split with Mr. Tramiel, precipitating the resignation. ”We have known each other for 18 years, and of course we differed at times. But there is no difference on this one,” he said, adding that it was time for Commodore to seek a new leadership ”to take us beyond being a $1 billion company.”

Mr. Tramiel’s son Samuel, who heads the company’s Asian operations, will reportedly remain with the company. And Mr. Gould said he foresees no major changes at other management levels, including in Europe, where the company is a leading maker of computers.

Steven A. Greenberg, a spokesman for Commodore, said Mr. Tramiel made his decision Tuesday, while driving home from the International Winter Consumer Electronics Show in Las Vegas. At the show, Commodore introduced a new line of computers.

Commodore officials said in Las Vegas that the company had two major projects ahead for the year. One is the manufacture of its own disk drives – which permanently store computer data – in a joint venture with the Mitsumi Electric Company of Japan. The other is to produce random access memory chips under a license from Micron Technologies of Idaho. Company officials said yesterday that both moves, which analysts believe will enable Commodore to cut costs even further, remain on schedule.


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