PDF Questionable statements:
"When Snyder was a director and CEO at Gateway, the company eliminated 19,000 American jobs and outsourced work to China."
This ad continues the Michigan Democratic Party's attack on Republican gubernatorial candidate Rick Snyder, an Ann Arbor venture capitalist who previously was a top executive and board member at computer maker Gateway Inc.
The Snyder campaign has created a website, http://truthformichigan.com/outsourcing-myth.html rebutting the outsourcing claims and defending his record as a business executive.
Snyder was executive vice president of Gateway from 1991 to 1996 when he was promoted to president and chief operating officer. He left active management of Gateway in 1997 to start a venture capital fund in Ann Arbor, but remained on Gateway's board of directors until the company was sold to Taiwanese computer maker Acer Inc.
While Snyder was involved in active management of the company between 1991 and 1997, Gateway grew from about 1,100 employers to 13,300, including 10,600 in the United States.
But the company stumbled in subsequent years during the dot-com meltdown. In 2003 it switched from being a manufacturer of computers to a sales and marketing operation, outsourcing manufacturing to suppliers in China and other Asian countries.
Snyder, who remained on the company's board of directors after leaving his management posts, came back to Gateway in 2006 as interim chief executive officer in an attempt to save the company. But those efforts ultimately failed and the company was sold in 2007 to Acer.
During the six months Snyder was interim CEO, he returned customer and technical support from Asia to North America and opened a manufacturing plant in Tennessee.
Gateway shed 19,400 jobs from 2001 to 2007, according to annual reports filed with the Securities and Exchange Commission. Those job losses included layoffs as a result of poor sales and financial losses, as well as outsourcing.
"Snyder cashed out $14 million in stocks before selling what was left of Gateway to a Chinese company."
Spokesman Bill Nowling said the figure likely is accurate, but that much of Snyder's compensation came from the exercise of stock options over the nearly 20 years he was associated with Gateway.
Heavily compensating executives with stock options was a common practice in the booming technology industry in the 1990s.
Snyder's Gateway stock transactions are outlined in a Securities and Exchange Commission document, but it is difficult to determine exactly how much he earned from those transactions.
"Snyder said the layoffs and outsourcing were "good for business."
The ad does not cite a source for this statement. Nowling said Snyder's campaign has not been able to determine if Snyder ever said it, but said Snyder's does not believe layoff and outsourcing are "good for business."
"Rick got rich while thousands lost their jobs."
This statement is technically true, but whether Snyder was responsible for those job losses is questionable. Although he was a member of the company's board of directors, he was not involved in active management of the company when most of the job losses occurred.
"The truth? Snyder and other execs mismanaged Gateway, costing thousands of American jobs."
Gateway was consistently profitable while Snyder served as executive vice president and president of the company. As a result, the stockholders' equity in the company rose from $128.9 million in 1992 to $930 million in 1997, the year Snyder left Gateway's management.
But the company struggled in the following decade after the tech bubble burst. It had five CEOs during the period, including company founder Ted Waitt and Snyder, who served as interim CEO for six months. The company lost money every year between 2000 and 2004 as management struggled to find a successful business strategy.
But Gateway posted net income of $9.6 million in 2006, the year in which Snyder served as interim CEO.
"Under Snyder, Gateway bled cash, laid off workers and outsourced thousands of jobs. In the end, Snyder helped sell the company to the Taiwanese."
As stated previously, Snyder did not lay off workers and outsource thousands of jobs while working as a company executive. The outsourcing came in later years while Snyder was on the board of directors.
Gateway's cash grew from $166.4 million in 1995 to $593.6 million in 1997, the year Snyder left the company. (SEC figures for earlier years were not available online.)
Snyder was chairman of the board when Gateway was sold to Acer in 2007 so he presumably did help sell the struggling company.
"The Snyder plan for Michigan? Layoffs, outsourcing, huge profits for Rick."
While Snyder has said state government must become more efficient, he has not said he would lay off state workers or outsource their jobs. And he would not earn huge profits as governor as the job pays only $177,000 a year.
OVERALL IMPRESSION:
The Michigan Democratic Party is determined not to let inconvenient facts get in the way of its repeated attempts to cast Snyder as a heartless business executive who outsourced good American jobs to China.
Gateway did outsource jobs, but did so starting in 2003 when Snyder was no longer in active management of the company.
He has said he was minority voice on the board opposing outsourcing. The claim seems credible in light of the fact that Snyder brought back technical and customer support function from Asia after becoming Gateway's interim CEO in 2006. He also built a new manufacturing facility in Tennessee.
The Snyder campaign's new website, truthformichigan.com, provides a comprehensive account of Snyder's role at Gateway.
MICHIGAN TRUTH SQUAD CALL: Foul.
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Foul for misleading claims about Snyder's role in outsourcing and poor management of Gateway.
Download Truth Squad Analysis.pdf
