Acer chief says no layoffs at Gateway
By Dave Dreeszen Journal business editor | Posted: Wednesday, October 31, 2007
NORTH SIOUX CITY -- The chief of Acer Inc. promises no job cuts as the result of the Taiwan-based PC maker's acquistion of Gateway Inc.
After Acer announced its $710 million deal for Gateway, "People in Gateway started to think how many employees will be laid off," Acer Chairman and CEO J.T. Wang told BusinessWeek. "That's not a priority. We want to keep the business. The synergies calculated don't include laying off people."
Wang made his comments during an interview with BusinessWeek's Hong Kong bureau chief Bruce Einhorn in Taipei prior to the release of Acer's earnings report Monday. The CEO did not discuss specific Gateway U.S. sites, but his no layoff promises undoubtedly came as encouraging news for the remaining Gateway employees in North Sioux City, as well as local leaders.
"It was nice to hear it directly from the source," Kory Menken, executive director of North Sioux City Economic Development Corp. "I think it bodes well for the future of Acer in North Sioux City."
Gateway's former headquarters and manufacturing plant in North Sioux today are home to about 450 employees who work in the company's direct consumer sales division, a tech support center and some companywide support functions, such as accounting, human resourcs and marketing.
Another 450 former Gateway workers are transitioning to Idaho-based MPC Corp., which earlier this month closed on a $90 million deal for Gateway's professional division. MPC has signed a five-year lease for office space elsewhere in Gateway's famed black and white cow-spotted complex.
Acer's deal for the consumer part of Gateway's business will create the world's third-largest PC maker and help Acer build market share the U.S., where the Asian firm has traditionally been weaker.
By combining the two firms, Acer expects to achieve some $150 million in cost savings, but laying off U.S. workers won't be part of the cost-savings, Wang said in response to a direct question from BusinessWeek.
"They're mainly from back-end synergies, especially for procurement of key components and possibly synergies from logistics and services," the CEO said. "The priority is to create synergy and maintain the business."
"We don't want to destroy the business or scale down the business. People at Gateway should look at Acer as supporting their strength to make the business turn around."
In the BusinessWeek interview, Wang added that Gateway has a "team of good people who have been hanging on for many years, even with no financial support or resources. So we said there is something valuable inside."
Acer plans to continue offering the Gateway brand, along with its own brand of PCs and notebooks.
Gateway, co-founded by Ted Waitt and Mike Hammond in a Sioux City farmhouse in 1985, grew into a multi-billion dollar enterprise and challenged Dell as the nation's top PC firm. Following the dot.com bust of the late 1990s, and a series of missteps and financial troubles, Gateway struggled to compete with larger competitors.
To read BusinessWeek's full Q&A with Acer CEO J.T. Wang, go to:
http://www.businessweek.com/globalbiz/content/oct2007/gb20071029_927338.htm?chan=top+news_top+news+index_global+business
After Acer announced its $710 million deal for Gateway, "People in Gateway started to think how many employees will be laid off," Acer Chairman and CEO J.T. Wang told BusinessWeek. "That's not a priority. We want to keep the business. The synergies calculated don't include laying off people."
Wang made his comments during an interview with BusinessWeek's Hong Kong bureau chief Bruce Einhorn in Taipei prior to the release of Acer's earnings report Monday. The CEO did not discuss specific Gateway U.S. sites, but his no layoff promises undoubtedly came as encouraging news for the remaining Gateway employees in North Sioux City, as well as local leaders.
"It was nice to hear it directly from the source," Kory Menken, executive director of North Sioux City Economic Development Corp. "I think it bodes well for the future of Acer in North Sioux City."
Gateway's former headquarters and manufacturing plant in North Sioux today are home to about 450 employees who work in the company's direct consumer sales division, a tech support center and some companywide support functions, such as accounting, human resourcs and marketing.
Another 450 former Gateway workers are transitioning to Idaho-based MPC Corp., which earlier this month closed on a $90 million deal for Gateway's professional division. MPC has signed a five-year lease for office space elsewhere in Gateway's famed black and white cow-spotted complex.
Acer's deal for the consumer part of Gateway's business will create the world's third-largest PC maker and help Acer build market share the U.S., where the Asian firm has traditionally been weaker.
By combining the two firms, Acer expects to achieve some $150 million in cost savings, but laying off U.S. workers won't be part of the cost-savings, Wang said in response to a direct question from BusinessWeek.
"They're mainly from back-end synergies, especially for procurement of key components and possibly synergies from logistics and services," the CEO said. "The priority is to create synergy and maintain the business."
"We don't want to destroy the business or scale down the business. People at Gateway should look at Acer as supporting their strength to make the business turn around."
In the BusinessWeek interview, Wang added that Gateway has a "team of good people who have been hanging on for many years, even with no financial support or resources. So we said there is something valuable inside."
Acer plans to continue offering the Gateway brand, along with its own brand of PCs and notebooks.
Gateway, co-founded by Ted Waitt and Mike Hammond in a Sioux City farmhouse in 1985, grew into a multi-billion dollar enterprise and challenged Dell as the nation's top PC firm. Following the dot.com bust of the late 1990s, and a series of missteps and financial troubles, Gateway struggled to compete with larger competitors.
To read BusinessWeek's full Q&A with Acer CEO J.T. Wang, go to:
http://www.businessweek.com/globalbiz/content/oct2007/gb20071029_927338.htm?chan=top+news_top+news+index_global+business
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Me3 wrote on Apr 9, 2008 6:02 PM:
Tim H wrote on Nov 1, 2007 1:44 PM:
Customer Support? wrote on Nov 1, 2007 12:02 AM:
In the know wrote on Oct 31, 2007 12:27 PM:
WARN? wrote on Oct 31, 2007 10:27 AM: