FOOL PLATE SPECIAL
Ted Waitt Retakes Gateway Reins

What does it take to get a company's co-founder and chairman back into the driver's seat? A troubling market environment and ownership of one-third of a company, it seems. That's what drove Ted Waitt back into the CEO's jacket at PC maker Gateway, which resolved to be more "aggressive" in a conference call today.

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By Dave Marino-Nachison (TMF Braden)
January 30, 2001

In a surprising after-hours move yesterday, Gateway (NYSE: GTW) named Chairman Ted Waitt its CEO, returning the company's co-founder to the post he held from 1993 through 1999, as Jeff Weitzen resigned. (Well, not everyone was surprised -- as evidenced by some mid-January activity on the Fool discussion boards.)

"I love Gateway, and I'm going to do everything in my power to make sure the company can grow and prosper in this challenging environment," said Waitt. "We've done a lot in the last couple years to solidify our beyond-the-box business, and now we're going to move forward by doing what Gateway's always done best: delivering better products, at better prices, with better service than anyone else out there, all while living the Gateway values."

Weitzen's departure ends an impressive run at Gateway for the former AT&T (NYSE: T) executive who joined as president and COO three years ago. An executive who had experience plying business, consumer, and international markets for the telecommunications giant, he took over as Gateway's CEO last January.

Waitt this morning debuted a new upper-management team. Joe Burke is now senior VP and CFO, replacing John Todd, who will be leaving the company. Burke has experience in auditing and running the expansion of Gateway's Country Stores. Bart Brown becomes senior VP of the company's consumer division, taking over for another defector, Cliff Holtz. Dave Russell was bumped up from VP of supplier management to senior VP of supply chain management. Several other Gateway executives, including co-founder Mike "Hammer" Hammond, remain on board.

"We need to get off to a fast start and we have a lot of work to do," Waitt said. "I am confident that the team we have in place will execute against our proven strategy in order to deliver continued success."

Post-conference call reports from Bloomberg this morning said Waitt promised a "more aggressive" management team that will continue the company's focus on its bread-and-butter PC, retail outlets, and cost positioning while examining alternative consumer markets such as information appliances. The company will also increasingly pursue the "outside-the-box" opportunities -- such as services, training, and Internet access -- it has turned to for growth in recent years. "People have predicted the demise of the PC for years," Waitt reportedly said. "I think there's a lot of legs left in the PC."

It's not surprising that Waitt would take an aggressive tack. He's the company's largest shareholder by far: His stake, greater than 30% of the company's outstanding shares, is more than six times bigger than any other person or entity. With the PC market under heavy fire following a string of recent warnings and disappointments from sector stalwarts Dell (Nasdaq: DELL), Apple (Nasdaq: AAPL), and others, such an approach is certainly necessary. (For more on the business, check out our InDepth page on computer hardware.)