A belief that the firm can't compete in certain markets

Gateway computers will probably not outsource its core personal computer manufacturing business, its chief executive has said.

In an e-mail sent to Gateway's Irish and international staff this week, Mr Ted Waitt also confirms the company believes it cannot compete profitably in some overseas markets. But he made no specific reference to redundancies in the company's Irish and British operations.

Mr Waitt writes that one of the questions that remains to be answered is the identification of overseas markets in which Gateway can "profitably execute our strategy".

Gateway announced on Wednesday that it would cease operations in the Republic and Britain, but it is still unclear if the firm will exit from the entire European, Asian and African marketplace.

Earlier this week, Mr Waitt spoke by telephone to the Tβnaiste, Ms Harney, about the closure of the Dublin facility.

In the staff e-mail, Mr Waitt says the company will need centralised call centres for many functions, but other functions will be more efficiently done on a local basis. The full text of the e-mail runs as follows:

"As I indicated last week, I want to provide an update on the upcoming changes. I don't have all the answers, but hopefully the following will help. Let me start with what we know for sure.

1. We know we need to move as much of our PC business as possible to the most popular configurations.

2. We know we need to change the majority of our sales and marketing efforts from reactive to pro-active and from central to local.

3. We know we need great people on the phones and in our stores, and improved Web capability, all working together to develop and maintain the best customer relationships.

4. We know we need to improve our own manufacturing efficiency and quality.

5. We know we can profitably execute our strategy of integrating personalised solutions with local relationships in the US, given our strengths and capabilities.

6. We know we would need to dramatically change our international operations to profitably execute that strategy in our overseas markets.

Now, let me tell you what we believe at this point, given the work we've done so far.

1. We believe we should be able to manufacture these most popular configurations ourselves more efficiently than an outsource manufacturing partner, although we'll always consider some outsourcing, as we do already.

2. We believe that we will need centralised call centres for many functions, but other functions will be more efficiently done locally.

3. We believe there are overseas markets where we simply can't profitably execute our strategy.

Finally, here are the questions that remain to be answered.

1. How much manufacturing capacity do we need to take us into the foreseeable future, what is the optimal mix of most popular configurations and customised configurations, and what is the right balance between Gateway manufacturing and outsource manufacturing?

2. What is the right balance between centralised call centres and enhanced local efforts in our stores in both sales and support?

3. In which overseas markets can we profitably execute our strategy?

Hopefully this adds more clarity. We plan on finalising the above decisions as soon as possible. For now, please do everything you can to stay focused on our customers and on supporting each other through our transformation.

I appreciate all your support and all the great e-mails I've received in these uncertain times. Keep in mind, at the end of the day, this is all about making Gateway as successful as it can be for our employees and our customers.

Thanks. Ted."