Apple dumps Spindler,
picks Amelio as CEO

Profile of Amelio

Published: Feb. 2, 1996

Mercury News Staff Writers

Apple Computer Inc., after an emergency board meeting in New York City, replaced Michael Spindler as chief executive of the troubled computer company, with National Semiconductor Corp. CEO Gilbert F. Amelio taking over.

Amelio, 52, also will become Apple's chairman of the board, taking the place of longtime Apple executive A.C. ''Mike'' Markkula, who will shift to the position of vice chairman.

Spindler has been under heavy attack since early January, when Apple revealed an unexpectedly heavy loss of $69 million in the last three months of 1995.

Cupertino-based Apple is expected to announce Spindler's resignation and Amelio's appointment Friday morning.

Amelio's arrival will dampen rumors that Apple's board is looking to sell the company, because Amelio -- who joined Apple's board last year -- presumably would not take the job if the company were about to be sold.

Over the past week, Apple has been negotiating a potential merger deal with Sun Microsystems Inc. of Mountain View, but the two companies got bogged down over price. Sun wanted to pay at or below Apple's current trading price, which ended at $28.75 a share Thursday. Apple's board wanted a premium, saying the company was undervalued.

''It's very clear that Apple had a crisis of confidence in its leadership,'' said Tim Bajarin, a computer industry consultant and president of Creative Strategies in San Jose. ''The board had to do something.

''Gil Amelio is a strong executive,'' said Bajarin, who heard of the leadership change Thursday night. ''If Apple has a strong strategy in place, he would be in an excellent position to execute it.''

Apple's board ended Spindler's two-and-a-half-year reign at the helm of Apple during an emergency board meeting Wednesday at the St. Regis Hotel in New York and apparently completed the arrangements Thursday.

In many ways, Spindler's departure was likely one way or the other. Wall Street analysts and investors were criticizing his management style, blaming him for the company's financial woes, which led to a recently announced reorganization, including layoffs for 1,300 workers.

''At this point, just taking a random guy off the street and the stock goes up five points,'' said Pieter Hartsook of the Hartsook Newsletter in Alameda.

The selection of Amelio ensures a new era for Apple, which has been known since its founding in 1976 by Steve Wozniak and Steve Jobs as a home for innovators and alternative lifestyles.

But Amelio is regarded as a specialist in turning around troubled companies and is likely to order sweeping changes at the ''Apple Campus.'' Amelio, who calls himself a ''transformation manager,'' not a turnaround manager, believes in rescuing companies with a long-term solution rather than hacking away like a ruthless short-timer looking for quick results. He used his skills to lift the fortunes of National Semiconductor, where he became CEO in May 1991. Before that, he was president of the semiconductor division of Rockwell International Corp., where he performed a similar corporate rescue.

When he succeeded Charles Sporck as the top executive at National, the Santa Clara chip manufacturer was just a few weeks away from a bankruptcy filing. A few years later, National was reporting record results in sales and profits.

''Magazine writers have described me as a turnaround manager,'' he wrote in ''Profit From Experience.'' ''It's a label I thoroughly dislike, a hot button that launches me into a super-charged explanation of the difference between turnaround and transformation.

''Shun the easy turnaround. Follow the road less traveled: be a transformation manager.''

Recently, he has introduced a team management structure at the top of the hierarchy at National, with three chief operating officers each handling a different part of the company's operations.

National's three top executives under Amelio are Kirk Pond, Rich Beyer and Ellen Hancock, who recently moved to the company from a top software position at IBM.

When asked before about whether he might become Apple's CEO, Amelio dismissed the topic as widespread rumors and wild speculation.

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