In a surprise announcement, Commodore President and Chief Executive Officer Jack Tramiel resigned on Friday, January 13. Tramiel's reported replacement, Marshall F. Smith, is expected to assume his duties in late February. Smith is currently president and chief executive officer of the U.S. unit of a Netherlands-based company, Thyssen-Bornemisza. To Commodore, Smith brings a track record of experience in major manufacturing operations and finance. His U.S. operation had 1982 sales approaching $1 billion. Smith does not have computer industry experience—it had been anticipated that Commodore Chairman Irving Gould would stress other variables in his selection.
The end of an era? Tramiel's resignation was met with surprise and some consternation within Commodore. His direct, aggressive style has been a critical factor in driving Commodore to its position of preeminence in the low-priced personal computer market. Tramiel was quoted as saying the company needed a "professional executive" to head it, given that the company has now reached the billion dollar sales mark.
What price stability? Commodore has had a series of senior management turnovers during the years of its growth as a personal computer manufacturer. All have been subordinate to Tramiel, and most who were brought in at the level of president had short-lived tenures. Tramiel's aggressive, active intervention in most facets of the company's operations and planning caused some internal conflict, visible externally in the high turnover.
Growth of the sort that Commodore has experienced can be damaging to a poorly run company, yet Commodore weathered its growth well, given that its annualized sales have increased by a factor of roughly 25 times in the last six or seven years. At the same time, Commodore has experienced some hardware problems, the most recent example centering around last fall's delays and disputed defects in the company's 1541 disk drive. Mr. Smith will bring to this situation experience in multisite manufacturing operations, and seasoned talent as the head of a company of roughly comparable revenues.
Tramiel, perhaps not considering himself a "professional executive," did run the company with a ruthless understanding of the marketplace. The year of the computer (1983) in many ways became the year of Commodore in the low-end market, as Tramiel's aggressive product introduction and pricing forced Texas Instruments out of the market and, at least temporarily, damaged Atari's position.
While we can now anticipate more internal stability at Commodore, and perhaps streamlined manufacturing operations, our concern will be the impact of Tramiel's absence on the company's aggressive stance. We've already heard rumors of a push to increase prices. Depending on the extent of such increases, Commodore might well find itself moving away from a market it opened up, and eventually trading market share to competition from overseas. Time will, of course, tell. We wish Mr. Tramiel well, and thanks for those 25 years of Commodore. And we welcome Mr. Smith, who's taking on a two-fisted job.
Editor In Chief