In a Jan. 30, 2004, press release announcing Gateway's (NYSE:GTW) acquisition of privately held eMachines, Gateway predicted that it would return to profitability in 2005 due to "sales volume increases, planned cost savings, and other synergies associated with its acquisition of eMachines...."
Perhaps you have not seen Michael Moore's workingman's epic, Roger & Me? Then I should translate: "Synergies" is corporate-speak for "layoffs." And indeed, Gateway announced yesterday that it is reducing its headcount from roughly 6,500 to about 5,500.
In this election year, I would love to rail against Gateway and its disdain for the common man, joining the chorus of voices now railing against companies such as General Electric (NYSE:GE), Electronic Data Systems (NYSE:EDS), and IBM (NYSE:IBM) for their insidious plans to export every last white-collar American job to India.
However, that would not be fair to Gateway. You see, according to Gateway's 2004 proxy statement, Gateway Chairman and CEO Ted Waitt has not been showing Gateway employees the door with one hand while collecting a fat paycheck with the other. Far from it.
Rather, Mr. Waitt appears to feel his employees' pain, and of his own volition. Ever since 2000, when Mr. Waitt was earning the respectable pay package of $250,000, the Gateway leader has been steadily reducing his own salary as his company has been reducing its workforce. In 2001, Mr. Waitt earned less than your average rural high school teacher. By 2002, Mr. Waitt's salary was barely enough to buy even one of his company's more modestly priced computers.
With the exception of 2001 -- when he apparently succumbed to temptation and dipped heavily into the stock options cookie jar -- Mr. Waitt has hardly even partaken of that most tasty of corporate treats.
So give credit where credit is due. Gateway is enduring tough times. It is losing money, but busily trying to make its acquisition of eMachines create a turnaround story, while cutting jobs as it feels necessary. But through it all, Gateway's chairman and CEO is doing the standup thing and refusing to accept a fat paycheck while his employees are suffering.
For that, I doff my Foolish cap to you, Mr. Waitt. Fool on!
Motley Fool contributor Rich Smith owns no shares in any company mentioned in this article.
