Spindler going, going, gone? Makeover artist may take his place

February 2, 1996
Web posted at: 9:15 p.m. EST
NEW YORK (CNN) -- The Wall Street Journal is reporting that Apple CEO Mic hael Spindler has been ousted from his position, and is being replaced with Gi lbert Amelio, the man who resuscitated an ailing National Semiconductor Inc. in 1991.

Amelio is also an Apple Computer, Inc. board member. He could take over Mike Markkula's post as chairman of the board as well, the journal reported.

Apple representatives in London would neither confirm nor deny the report when contacted by CNN Business News.

Journal sources said Michael Spindler's departure indicates that the company has rejected a takeover bid from Sun Microsystems Inc. and will try to fix its problems itself. However, the New York Times reported Friday that Sun Microsystems Inc. and Apple were close to completing a deal, with Sun paying more than its initial offer of $23 per share.

Amelio's past business experience suggests he may be able to turn around Apple, whether it is to move the company ahead as an independent entity or to repair it and sell it off fo r a better offer.

Amelio started off as a Bell Laboratories researcher and was later an exe cutive at a division of Fairchild Semiconductors. (Fairchild was one of the first companies of the Silicon Valley generation, and in 1959, was the company to patent the process for commercial production of transistors.)

In 1991, he became president and CEO of National Semiconductor. He stream lined the ailing company, closing divisions and trimming the staff, and four years later, it was turning solid earnings once again. The company reported its 1995 earnings at over $2 per share.

He will have his work cut out for him with Apple. Its problems are many, now -- lack of confidence in the company's management, belief that the board of director s lacks a vision for the company's future, a mass exodus of the talent that made Apple a s uccess. But the trouble may have originated with one simple fact: While the personal computers Apple is pr oducing are very good, they are also much more expensive than those made by the competition.

Since Apple handles all of its own research and development, its costs ar e higher. Thus, when the big PC price war started this fall, and Apple tried to compete with PC companies turni ng out masses of Windows-based PCs by cutting costs, it makes very little profit per unit -- even though its sales are the third highest in the world.

Michael Spindler's standing was injured by that profit margin cut. In its annual shareholders' meeting on Jan. 24, Apple's board of directors stood behind Spindler, saying that they we re equally responsible for not foreseeing the price war. But some angry stockholders felt that Spindler lacked vision to lead the company out of trouble, and called for his resignation.

Apple's first indication of serious problems appeared in December, when i t warned of a $69 million loss for the period ending December 1995, and predicted a loss for the following quart er as well. Apple is already implementing a restructuring plan that will lay off 1,300 workers.