In January 1984 Commodore had just finished the best year any home computer maker had ever had. Its sales had passed a billion dollars, the Commodore 64 was outselling everything else in its class, and Texas Instruments and Mattel had given up the fight. On 13 January, days after the Winter Consumer Electronics Show, the company’s founder resigned. Six months later Jack Tramiel owned most of Atari, the company his price cuts had helped to wreck, and by the next January he was back at the same show with a new 16-bit computer and the slogan “Power without the Price”.
Tramiel’s whole career ran on one idea: make the thing cheaply, sell it cheaply, and sell a great many. Ahoy! summed up his philosophy in two of his own phrases, “Commodore builds for the masses, not the classes,” and “The minute you’re through changing, you’re through.”
Łódź, Auschwitz and the US Army
He was born in Łódź, Poland, on 13 December 1928, as Idek Trzmiel or Tramiel; public sources spell the family name both ways. He was ten when Germany invaded Poland. According to Retro Gamer’s tribute, the family was sent to the Łódź ghetto and then to Auschwitz, where the boy was judged fit for forced labour and sent with his father to the Ahlem camp near Hanover. His father died there. American troops liberated the camp in April 1945. Back in Łódź he found that his mother had survived, and he married Helen Goldgrub, a fellow survivor.
He emigrated to the United States in 1947 and joined the Army. It put him to work in Manhattan repairing typewriters, with some training at IBM. In one of his last interviews, retold in The Story of the Commodore 64 in Pixels, he described what the Army taught him: “When I was in the army I learned who the Americans are and I came up with the idea that if you work hard, you can do whatever your ability is.”
Later, he gave talks about the camps to schools and fundraisers. “When I do one of those talks, I shake for a week,” he said. His assistant at Commodore, Michael Tomczyk, asked how he dealt with the memories and was told: “I live in the future. Only the future. There’s nothing else.”
Typewriters and adding machines
After the Army he joined a small typewriter business in Manhattan, and his own account of leaving it explains a good deal about the man. He won the firm a contract to repair 2,000 typewriters and was still paid fifty dollars a week, so he quit: “The reason why is because you are very dumb. A person who brings you that kind of a contract, you should definitely reward them, which you didn’t.”
In the early 1950s, working from an office in the Bronx, he agreed to sell a Czechoslovak company’s typewriters in North America. The United States banned imports from Warsaw Pact countries, so in 1954 he set up the Commodore Portable Typewriter Company in Toronto to import the machines in parts and assemble them in Canada. According to Retro Gamer, he chose the name because he “wanted a name with a military name, and higher ranks like Admiral were already taken”.
When Japanese typewriters undercut him he moved to adding machines, and he later bought the Berlin factory that made them. Commodore went public in 1962. Its chairman from the mid-1960s was the Canadian financier Irving Gould, whose money rescued the company when its main lender collapsed. The two men would work together, uneasily, for almost twenty years.
Calculators and the lesson of Texas Instruments
By the 1970s Commodore was selling electronic calculators built around chips bought from Texas Instruments. Then TI started selling calculators of its own. Compute!’s Beginner’s Guide to the Amiga describes the result: the price of an average calculator fell “from around $150 to around $25” in two years, and “Commodore lost millions of dollars”. In the interview retold in The Story of the Commodore 64 in Pixels, the loss is put at about $5 million on sales of $50 million.
His conclusion was that a company which bought its most important parts would always be at the mercy of whoever sold them. “You have to be vertically integrated,” he said. In 1976 Commodore bought MOS Technology, the Pennsylvania chip maker that had just launched the 6502 microprocessor. The purchase brought him Chuck Peddle, who showed him a single-board computer and suggested putting it, a keyboard and a display in one box. Tramiel gave Peddle six months. The result was the Commodore PET, shown in 1977.
The VIC-20, the Commodore 64 and the price war
The PET sold to schools and businesses. Tramiel wanted a computer for the home, cheap enough to sell in toy shops and department stores. The VIC-20 was built around a MOS video chip and advertised by William Shatner as “the wonder computer of the 1980s for under three hundred dollars”. Commodore later celebrated its millionth VIC-20.
Its successor was a bet on the price of memory. At the end of 1981 Tramiel told the MOS engineers to turn their new graphics and sound chips into a computer with 64K of RAM, although 64K chips were still expensive. His engineer Al Charpentier explained the thinking: “Jack made the bet that by the time we were ready to produce a product, 64K Rams would be cheap enough for us to use.” The Commodore 64 was announced at $595 in January 1982, and in 1983 Commodore cut its price again and again, until some shops were selling it for $199. Rivals who had to buy their chips could not follow. Texas Instruments left the home computer business, and Atari lost hundreds of millions of dollars.
“Business is war”
Tramiel’s best-known saying was already famous in the period. Your Computer referred in October 1984 to “his famous ‘business is war’ slogan”. Tomczyk, who worked beside him for four years, once asked why so many Commodore managers were fired or resigned. “Business is war,” Tramiel told him. “You have to be in it to win. Our generals are all in the trenches, so more of them get killed.” Tim Chaney, who sold Commodore machines to British shops, remembered a longer form: “business is war and we don’t have competitors, we only have enemies”.
The same toughness ran through the company. Tramiel personally reviewed or signed every purchase order above $5,000, Tomczyk recorded, and “that meant everyone had to be on their toes.” Ahoy! noted the costs: retailers complained that Commodore treated them as harshly as suppliers or competitors, and there had been “a steady turnover of top executives” under “Tramiel’s inflexible one-man rule”.
Leaving Commodore
Tramiel resigned on 13 January 1984. Ahoy! reported that four other executives soon followed and that Commodore’s shares fell from $47 to $28 in three weeks. Tramiel’s own explanation at the time was modest: “I’m not a professional executive. I use a personal touch, like a family business. I never believed I would be able to run a business of that size.”
Years later he described a quarrel with Irving Gould. In his account, Gould wanted to “milk the company” while he wanted to build it, and he had told Gould he would leave by a certain date if they could not agree. These are one side’s recollections; Gould’s side of the argument is not on the record in the same way.
Atari
Tramiel set up a new company, Tramel Technology, with his sons. The spelling was meant to show how the name should be said. In July 1984 Warner Communications sold him Atari’s home computer and video game business, which had lost $539 million the year before; Warner kept the arcade division. Electronic Games gave the price as $240 million. InfoWorld’s Essential Guide to Atari Computers explained that Tramiel paid no cash: Warner took $240 million in low-interest promissory notes and an option on part of the new Atari Corporation. Tramiel cut staff heavily and cancelled projects, and, the guide added, “reiterated his claim that ‘business is war.’”
Tramiel was also involved with the machine that became the Amiga. By the account the Amiga team later gave, Atari lent the struggling Amiga company half a million dollars while negotiating to buy it, before Commodore made a higher offer and bought Amiga instead.
At the January 1985 Consumer Electronics Show Atari launched a family of machines at once. Personal Computer News reported the show as “Atari 5, Commodore 2” and opened with “‘Business is War,’ says Atari boss Jack Tramiel”. The highlight was the 68000-based ST, whose operating system was called TOS, “Tramiel Operating System”. The first Atari ST went on sale in June 1985.
Retro Gamer says Tramiel had cleared Atari’s debts by 1987, retired from running it the following year but stayed as chairman, and came back to oversee a merger with the disk drive maker JTS in 1996, after which he retired for good. He died of heart failure on 8 April 2012, aged 83.
Sources
- Ahoy! issue 4, April 1984, p. 6: Tramiel resigned on 13 January 1984.
- Ahoy! issue 5, May 1984, pp. 44–45: feature on Commodore after Tramiel’s resignation; sales past $1 billion in 1983; “Commodore builds for the masses, not the classes” and “The minute you’re through changing, you’re through”; relations with dealers and turnover of executives; four executives leaving; the fall in the share price; Tramiel’s “I’m not a professional executive” quote; the retreat of Texas Instruments and Mattel.
- Retro Gamer issue 103, June 2012, pp. 6–7, “A Legend Passes”: birth date and place, the Łódź ghetto, Auschwitz, Ahlem and liberation, his father’s death, his mother’s survival, Helen Goldgrub, “I shake for a week”, the name Commodore, retirement from Atari, JTS, his death.
- Roger Kean, The Story of the Commodore 64 in Pixels (Fusion Retro Books), pp. 9–31, built on transcripts of one of Tramiel’s last interviews: emigration in 1947, the Army and IBM training, the 2,000-typewriter contract, the Bronx office, the Toronto company in 1954, adding machines and the Berlin factory, the 1962 flotation and Irving Gould, the Texas Instruments loss, the purchase of MOS Technology, the PET deadline, the VIC-20 advertisement, Tim Chaney’s “business is war” recollection, the quarrel with Gould, Tramel Technology, the ST in June 1985.
- Michael S. Tomczyk, The Home Computer Wars: An Insider’s Account of Commodore and Jack Tramiel (Compute! Publications, 1984): “I live in the future” (p. 51); purchase orders above $5,000 (p. 62); “Business is war … Our generals are all in the trenches” (p. 63); “We make computers for the masses, not the classes” (p. 300).
- Tekla S. Perry and Paul Wallich, “Design case history: the Commodore 64”, IEEE Spectrum, vol. 22 no. 3, March 1985 (read in the version republished at spectrum.ieee.org): Charpentier’s account of Tramiel’s 64K RAM bet.
- Compute!’s Beginner’s Guide to the Amiga (Compute! Books, 1986), introduction: Texas Instruments entering the calculator market, the fall in calculator prices, Commodore’s losses and the purchase of MOS Technology.
- Your Computer, October 1984, editorial: “his famous ‘business is war’ slogan”; Atari “picked up … for $240 million”.
- Electronic Games, October 1984, pp. 13–14: “Ex-Commodore Pres. Tramiel Buys Atari”, the $240 million price, Warner keeping the coin-operated division.
- InfoWorld’s Essential Guide to Atari Computers (Harper & Row, 1984): the promissory notes, the lay-offs and cancelled projects, “business is war”.
- Personal Computer News issue 95, 19 January 1985, p. 1: the Las Vegas CES report, “Business is War”, “Power without the Price”, the ST and TOS.
- Amiga Computing, December 1988, pp. 24–26: the Amiga team’s account of Atari’s loan and Commodore’s purchase.
- Retro Gamer issue 100, March 2012, pp. 90–95: Atari’s 1983 loss and the sale to Tramiel in July 1984.
- Compute!, issues 22 (March 1982) and 39 (August 1983), and Ahoy! issue 4: the Commodore 64’s launch price and the 1983 cuts, as set out in the Commodore 64 entry.