Word: atari
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Jack Tramiel gobbles Atari...
...Silicon Valley's microchipped wonder companies, Atari was one of the earliest and most colorful. It gave birth to the video-game industry and churned out amusements like Pong, Asteroids and the home version of Pac-Man. It saw its sales explode from $30 million in 1976 to a peak of $2 billion in 1982. It spun off famous employee alumni, like Steven Jobs, co-founder and chairman of Apple Computer. Physically, it spread to 49 buildings around Sunnyvale, Calif. But its fall came even faster, as a fickle public cooled to its video games. Losses hit $539 million...
Tramiel, the former president of Commodore International, who built it into the leading home-computer manufacturer, will pay no cash for Atari but will pick up $240 million of the company's debts. He will also get rights to buy 1 mil lion Warner shares at $22 each, about equal to last week's price. Warner, which evidently believes that Tramiel can succeed where it failed, will hold onto a 32% stake in Atari...
Tramiel moved swiftly and ruthlessly after arriving at Atari's headquarters in a two-tone Rolls-Royce. As industry experts saw it, he intended to dismantle Atari, regarding it as a start-up operation. He pushed aside Chairman James Morgan, 42, the former Philip Morris executive whom Warner had brought in last September to perk up the company. Mor gan had tried to save Atari, chiefly by slashing its worldwide work force from...
Tramiel went further. He installed Sons Sam, Gary and Leonard in key management posts and sent out pink slips to some 70% of Atari's remaining U.S. work force of 1,100, leaving a skeleton crew of no more than 300 engineers, financial and marketing people and clerks. Atari's manufacturing facilities will be shifted and consolidated. One center in El Paso will be moved to Sunnyvale, and Atari's software production will be relocated to Taiwan...