Wilkie Resigns Tandon Post After Founder Rejects His Plan
Dan H. Wilkie, a former top International Business Machines executive hired in November, 1985, to make Tandon Corp. a major player in the personal computer business, has resigned as president and chief operating officer of the Chatsworth computer company.
The resignation came after founder and chief executive Sirjang Lal (Jugi) Tandon rejected a Wilkie plan that would have changed whom executives report to within the company, director Jean Deleage said Monday. Deleage declined to elaborate, except to say that Wilkie’s plans “were not in the best interest of the company, according to Mr. Tandon.”
Computer industry analysts and executives expressed surprise at Wilkie’s resignation.
“Dan has made excellent progress in my view from the difficulties they’ve had. I hope it doesn’t affect their continued progress,” said Burt I. Helfinstein, chairman and chief executive of Entre Computer Centers, a Vienna, Va., firm that is the biggest domestic dealer of Tandon computers.
Remaining With Tandon
Wilkie, 44, resigned also as a director. In an interview, he refused to comment on the plan he devised. He will remain a company employee and continue to draw his annual base salary of $270,000 under an employment contract that runs until the end of 1989.
Wilkie said he is working on “pet projects,” specifically a plan for a leveraged buyout, with some Tandon executives, to acquire Tandon’s repair business for personal computers and disk drives. Wilkie said he would be chief executive of the new company if it were spun off and that Tandon Corp. could get some much-needed cash from the buyout. In a leveraged buyout, a company or operation is bought using borrowed money, which is paid back with money generated from operations or the sale of assets.
Wilkie said he and Sirjang Tandon have not “had a big fight.” Tandon could not be reached for comment.
One former Tandon executive who maintains close ties to the company said Wilkie may have been uncomfortable with the increasing role played by Chuck Peddle, Tandon’s key marketing executive. Peddle, a mercurial executive, has pioneered development of the personal computer at various companies including Commodore International and Victor Technologies.
“Any company like this has a lot of different strong-willed people, and Chuck is one of them. As far as a comment beyond that, I won’t say. Chuck has brought a lot of business to Tandon,” Wilkie said.
Peddle said that disagreements between marketing executives like himself and manufacturing executives like Wilkie are inevitable in a computer company. He said Wilkie’s resignation “is a thing between him and Jugi.”
Wilkie was hired in a highly publicized recruiting move by Sirjang Tandon and given the task of stemming the company’s losses. During Wilkie’s tenure, Tandon closed factories and transferred manufacturing work to lower-cost plants in Singapore. Wilkie also helped transform the company from an ailing maker of disk-drive memory equipment to IBM-compatible personal computers.
Wilkie’s departure comes as Tandon has been reporting some of its best financial results in years. Last month, the company disclosed that it earned $5.6 million in the third quarter ended June 28 as sales rose 58% to $81.8 million. A year earlier, the company lost $20.3 million, primarily because of problems with a disk-drive factory in San Jose.
An 18-year veteran of IBM, Wilkie played a key role in developing IBM’s successful personal computer in 1981 and was in charge of operations at the company’s IBM-PC facility in Boca Raton, Fla., when he joined Tandon. In addition to his base salary, he received options to buy 450,000 shares of Tandon’s common stock within four years at $2.75 a share. The stock closed Monday at $4.62 1/2, off 6 cents in over-the-counter trading.
Along with Wilkie, Tandon hired three other key executives who helped develop the IBM personal computer--H.L Sparks, William Sydnes and Joseph A. Sarubbi. Sparks and Sydnes have since resigned.
Despite Tandon’s improved financial results, analysts and executives said, most of the success of Tandon’s brand-name personal computers has come in Europe, where sales of computers and disk drives account for two-thirds of the company’s overall revenue. Sales have been hurt by a lack of outlets in the United States, they said.
