Gateway founder Ted Waitt donates to Rick Snyder's Michigan gubernatorial campaign
Ted Waitt, the co-founder of Gateway who built the computer company in a global giant and became a billionaire through its rise, is supporting Michigan Republican gubernatorial candidate Rick Snyder.
Waitt donated the maximum $3,400 to Snyder's general election campaign, according to campaign finance records released by the state of Michigan.
It marks the first time Waitt has signaled any kind of interest in the campaign -- which has featured regular attacks from Democrats and, in the primary, Republicans accusing Snyder of outsourcing jobs as a Gateway executive.
Gateway co-founder Ted Waitt
Rick Rice, a spokesman for Waitt's La Jolla, Calif.-based investment firm Avalon Capital Group, said today that he would ask Waitt whether he's willing to make any comments about the gubernatorial race.
It's unclear how close Snyder and Waitt remain today, but the Snyder campaign is welcoming Waitt's support.
"Rick is happy to have Ted's support," campaign spokesman Bill Nowling said in an e-mail. "It shows he believes Rick is the right person to lead Michigan."
Waitt and Snyder met when Snyder was a tax accountant 20 years ago for Coopers & Lybrand's Chicago office.
Waitt, who founded Gateway with his brother but later became the public face of the company, hired Coopers & Lybrand to analyze the merits of a possible acquisition. Snyder counseled against the acquisition, and Waitt was impressed with Snyder's advice.
Waitt soon recruited Snyder to become Gateway's executive vice president, and Snyder moved from Chicago to Gateway's then-headquarters in South Dakota in summer 1991. At the time, Gateway had fewer than 1,000 employees and some $600 million in annual sales.
"Ted figured he needed some help running the company, so he asked me to move out to South Dakota," Snyder told AnnArbor.com in an interview earlier this summer. "And basically after I got out there, it evolved fairly quickly. We didn't have it fully defined. It was a trust relationship to say move out to the prairie and go to work.
"So I moved out there to go to work. Ted did marketing and product stuff. He did anything he wanted, but basically the people all worked for me and I was responsible for running the place. Basically in the early days that was the relationship through those whole six years of (working for) the company. I had a blast."
Michigan Republican gubernatorial candidate Rick Snyder speaks to a voter at a town hall meeting in Chelsea in August.
Melanie Maxwell I AnnArbor.com
Snyder eventually became president and chief operating officer of Gateway but left in 1997 to return to Michigan. In 1997, Gateway had some 10,600 employees in the U.S. and more than $6.2 billion in sales. Snyder continued to serve on Gateway's Board of Directors until 2007, when the company was sold to Taiwan-based Acer Inc.
After Snyder's departure, Gateway ballooned to 21,100 employees in the U.S. and 3,500 in 16 foreign countries by Dec. 31, 2000.
But the company's growth had gotten out of control and its grip on the market was slipping, just as the computer industry started to restructure and cost concerns shifted most of the industry's manufacturing overseas.
Waitt, who led the company successfully as CEO until stepping down in 1999, ousted an executive and became CEO once again in January 2001. But he made several strategic missteps as CEO of Gateway from January 2001 to March 2004, analysts told AnnArbor.com this summer.
Gateway sold 4.6 million computers in 1999 but that sunk 54.3 percent to 2.1 million in 2003.
The company founder, who still owned 32.8 percent of Gateway's stock as of Feb. 4, 2004, lost billions as Gateway collapsed. He gave up control of the company after Gateway acquired competitor eMachines Inc. for $289.5 million in March 2004.
As part of that deal, Wayne Inouye, eMachines' CEO, took over Gateway. He accelerated the shift of Gateway's manufacturing to eMachines' network of foreign suppliers. By Dec. 31, 2005, Gateway had just 1,800 employees, all in the U.S.
Collectively, the downsizing and outsourcing returned Gateway to a profit in 2005 for the first time in five years, according to SEC records.
But the outsourcing that occurred at Gateway in the time after Snyder had resigned as an executive but was still serving on the Board of Directors has become an issue in Michigan's gubernatorial campaign.
The Michigan Democratic Party and Democratic gubernatorial candidate Virg Bernero have accused Snyder of outsourcing jobs at Gateway. They've said he should have found a way to convince the Board of Directors to keep jobs in America.
Snyder has said he was a "minority voice" on the board and couldn't stop the outsourcing.
During the gubernatorial debate Oct. 10, Bernero called Snyder "chief executive outsourcer" and rejected Snyder's assertion that the outsourcing accusations were "simply untrue."
"As far as Gateway, either he lied to the SEC or he's lying here tonight," Bernero said.
A spokesman for Bernero's campaign could not be reached for comment this afternoon.
Waitt today runs Avalon Capital Group and several philanthropic initiatives, including the Waitt Foundation, Waitt Institute and the Waitt Institute for Violence Prevention. He has largely stepped out of the public spotlight, although his investment group reportedly faces allegations of profiting after a real estate development plan in Minnesota fell apart.
Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com's newsletters.
Comments
Do not taunt Happy Fun Ball
Fri, Oct 29, 2010 : 4:58 p.m.
Gateway was a big success. If you want success vote for Snyder. Rising (13%+) unemployment and falling incomes (avg now down to $44k/yr) will not stop with more Democrats in office. It just won't.. Jennifer tired for 8 Years, and failed - let's give Rick a shot.
David Briegel
Tue, Oct 26, 2010 : 9 p.m.
Gee, I wonder how many of our govt jobs Rick can ship to China. Since that is Rick's area of expertixe! Heck, I wonder if we could hire a Chinese citizen for a few dollars a day to be Gov? veracity is right on target as always!
Veracity
Tue, Oct 26, 2010 : 3:53 p.m.
I respect Ted Waitt for creating Gateway, Inc. in 1985, six year prior to hiring Rick Snyder. By the time Rick Snyder became another vice-president the Gateway computer company was well established and already successful. The increase in employment that occurred during Rick Snyder's initial six year tenure at the company would likely have occurred without his input. What is most telling is that Rick Snyder could not save the company while CEO during six months in 2006. He does want credit for bringing some outsourced jobs back to America but these jobs were for "support service" which was reviled for poor quality after being sent overseas. As for Rick Snyder's venture capitalism efforts during the last ten years, I understand that 35 companies were financed of which between seven and ten failed (as happens with these types of enterprises). The jobs associated with company formations were created by the company executives with funding from Rick Snyder but not directly created by Rick Snyder. I understand that a total of 420 jobs were created in Michigan and about 1300 jobs elsewhere. Some of the the 420 jobs have disappeared from Michigan since origination. With no government managerial experience or familiarity and with a contested job creation history Rick Snyder should NOT be considered a preferential candidate for governor to Virg Bernero who has created jobs as mayor of a large Michigan city and who obtained over $340 million of federal funds to pay for construction and clean-up jobs.
michigan face
Tue, Oct 26, 2010 : 2:31 p.m.
Rick's greed and hunger for power do not make him suitable to be our Governor. Rick has no "business" even running in the first place. Do not let yourself be fooled - too much is at stake here and now. Vote Virg!
David Briegel
Tue, Oct 26, 2010 : 7:52 a.m.
trespass, We are feeding the hand the bites us! Our tax dollars are funding our very own demise. Including military applications. Imagine if Clinton did anything resembling this? grace, who would be governor if "none of the above" won? Protesting at this point solves nothing. If you don't see the difference then vote for the candidate that cares about people. Rick is too big of a gamble. Don't let the Nerd Purchase our governorship! Vote Virg!
graceekerr
Tue, Oct 26, 2010 : 6:50 a.m.
Rick is the best one for the job, in this case. Why can't we have none of the above on the ballot?
M-Fan
Mon, Oct 25, 2010 : 10:17 p.m.
M-Fan Posted moments ago In the so-called "private sector" the control is from top down. It's main reason for being is to make a profit. Human elements (jobs, wages, affects on the general population) are NOT a consideration. With the governing sector, control is suppose to be from the bottom up, and human elements are suppose to be of greatest consideration. Corporate interests are for PROFITS, NOT PEOPLE. When governing, the interests are suppose to be for PEOPLE, NOT PROFITS. Michigan will choose which it wants running it, Corporate interests or People interests. Personally, I prefer people's needs above corporate needs. Governing bodies must be in the best interest of the people, not corporations. The recent Supreme Court ruling giving corporations the power to do anything they want to promote their self-interest over the people is a warning that corporations will take over the governing and make their profits more important than the welfare of the people.
trespass
Mon, Oct 25, 2010 : 9:07 p.m.
Regardless of whether or not Snyder was responsible for jobs outsourced at Gateway, he is almost souly responsible for outsourcing jobs via Discera. It is entirely fair to say that what Discera is doing in China is outsourcing jobs. The first point I would make is that although the China office may be small, the companys own literature says that the market for Discera's technology is $3.5 billion. They are a "fabless" semiconductor company, which means they don't fabricate (produce) their own chips. They will make money by convincing companies that produce chips, or integrated circuits, to use their technology rather than using quartz crystal technology or other technologies. Thus, the engineers that are "sales people" are showing Chinese companies how to integrate Discera's technology into their products and compete with American companies. Even if a particular company doesn't have an American competitor, currently, if the technology were kept in America it would make our semiconductor companies more competitive. The Discera technology is described as "disruptive" (i.e. such a breakthrough that it will disrupt the current market). Thus, the decision to market the technology to Chinese companies will impact jobs in America. The second point is that this is only one of many technologies that have been developed at the University of Michigan, funded by federal grants paid for by US taxpayers that have been transferred to Chinese companies. Since Snyder has set the precedent with his company, he would be in no position to tell the University of Michigan that they should stop sending American technology to China. I would also make the point that Discera's technology has important military applications. One of the first deals that Discera announced was for a subsidiary of Tyco to produce an important component of telemetry systems for smart munitions.
David Briegel
Mon, Oct 25, 2010 : 7:24 p.m.
bablat, YOU can even work for $4 a day in many overseas plants. Because those noble corporations share YOUR values!
Cash
Mon, Oct 25, 2010 : 5:46 p.m.
http://www.bbc.co.uk/news/world-us-canada-11622772 Republicans are getting lots of questionable donations.
Bablat
Mon, Oct 25, 2010 : 5:46 p.m.
Uawisok, looking for a job? Go south where manufacturing is booming.... Mercedes in Alabama, BMW in South Carolina, Nissan in Tennessee, Honda Jets in North Carolina. You are living in Lala land.
uawisok
Mon, Oct 25, 2010 : 4:36 p.m.
The top 10 poorest States in the Union (2010 census) which are all south of the Mason/Dixon have been in Republican control since 1964 when the Civil Rights act was made law of the land. So based on 46 years of governing and they are still the poorest why would I vote Republican? They are all also so called "right to work states", I would think if Republican doctrine works so well why are they soooo poor?? Think voters and allow history to help you figure things out.
David Briegel
Mon, Oct 25, 2010 : 4:30 p.m.
Golly, maybe Rick will have success similar to Waitt's. From 8.5 billion to 1.7 billion in 5 yrs. Won't Michigan be just lucky?? And that during the "cheap labor" outsourcing! John, the way that looks it might be sad for our glorious State! peg, you are so right! But then Republicans always start at the top! It is their right! A2.com, Virg called your boy a liar. A NEWS organization might want to find out the truth. Now THAT would be NEWS!
John of Saline
Mon, Oct 25, 2010 : 4:17 p.m.
Virg Bernero is qualified, Rick Snyder is not. The voters will decide who's qualified.
peg dash fab
Mon, Oct 25, 2010 : 3:22 p.m.
These questions about what Rick Snyder did or did not do at Gateway obscure the central distinguishing factor between the two candidates: Virg Bernero is qualified, Rick Snyder is not. If Rick Snyder wants to hold an elected position, let him run for (or purchase, as seems to be the case here) city council or some such so that we can judge him by his effectiveness, not by his promises. Virg Bernero, who has a strong public record, is clearly qualified, and he will get my vote. George W. Bush had qualifications like Snyder's. Do we want a disaster like that on our hands?