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  • shbrom shbrom Aug 6, 2003 11:51 AM Flag

    Carly Fiorina interview with Forbe's

    "Can anyone point to one lasting business success that Carly has ever had,..."

    Sure...she beat the pants off an anti-merger coalition of WH+other family interests and whiny employees (who would be denied their sinecure in a company that would have to enter the real world) and pointed the company into the future. She won that battle and is now executing a plan that is receiving generally favorable review in the financial press.

    Now, what have you done for HPQ, except whine?

    HPQ Long

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    • Shbrom writes:

      "Sure...she beat the pants off an anti-merger coalition of WH+other family interests and whiny employees (who would be denied their sinecure in a company that would have to enter the real world) and pointed the company into the future. She won that battle and is now executing a plan that is receiving generally favorable review in the financial press."

      If pushing the merger through is the only success that you can name, you haven't made much of a case, Shbrom. Pushing the merger through was clearly a personal victory for Carly, but only time will tell if this one success is indeed a success for shareholders and employees. A 'generally favorable review' in the financial press is not a convincing measure of success, especially considering the money that HP is currently pumping into many of these publications.

      It is interesting to note that while Carly achieved her personal victory in pushing the merger through, she made several ethically questionable moves along the way. This should be particularly troubling for those employees who recently took the internal Standards of Business Conduct (SBC) training. In that training, employees were continually told that one needs to be honest in all dealings, one cannot badmouth competitors, HP's reputation is extremely valuable, etc. The training also emphasized that even the appearance of impropriety is to be avoided. And while taking this training, how many recalled the actions of Carly and her executive management team during the merger fight:

      - Walter Hewlett being labelled 'an academic and a musician'.
      - HP management saying that a majority of pre-merger HP employees favored the merger, basing these statements on a bogus 'employee pulse' taken without anonmymity from a group of hand-selected employees who had just heard Carly give a talk about the benefits of the merger.
      - Saying that Walter Hewlett's financial 'motivations may be different from your own', when in fact it was Carly's motivations that should have been in question.
      - Lying about the planned executive compensation for Carly and Michael post-merger.
      - The Deutch Bank fiasco, where Carly told Bob Wayman in a phone message that we must do something 'extrordinary'. This followed by a last minute vote change from 'NO' to 'YES' by DB.
      - The post-merger trial statement that layoffs would be around 13,000 employees when Carly knew full well that the number would be much higher.

      And I'm sure I've missed a few here that others are invited to add.

      The SBC training concluded by encouraging employees to let their management know of anyone who has violated the standards. What isn't clear is how one would go about reporting Carly for her numerous violations.

      Colonel Buck

      • 3 Replies to colonel_buck_murdock
      • "1. Walter Hewlett being labelled...
        2. HP management saying that a majority...
        3. Saying that Walter Hewlett's financial 'motivations may be different...
        4. Lying about the planned executive compensation for Carly and Michael post-merger.
        4. The Deutch Bank fiasco,...
        5. The post-merger trial statement that layoffs..."

        Let's take your allegations in order:

        1. Absolutely true. That he had no business sense was made manifestly clear by the way he handled the internal merger discussion in its intital stages within the BoD. He attended a social event rather than a critical board meeting when he, more than anyone else in the universe, should have recognized the importance of that board meetng. He allowed others to prod him into that pyrhhic and baseless legal offensive after the merger vote.

        2. They took a poll and reported the results. There were a number of self-serving polls taken by both sides during the runup to the merger vote, including some family-sponsored queries of employees, and the likely outcome of voting, which led to less-than-objective responses.

        3. The Board, in its recommendation to shareholders as to how to vote, also included a statement to that effect. In fact, it was nothing more than the absolute truth.

        4. The question of who lied is an interesting one. CF, MC and eventually the board were forced to issue public statements correcting WH on that matter (another reason for supporting that my response to #1, above, is accurate). Now, if everyone but WH took the position that there was ***in fact*** no agreement reached as to compensation of CF and MC, the question as to who was misinformed casts WH in an unfavorable light. See #1.

        4. A neutral third party, a judge of the Chancery Court in Delaware, ruled on that matter. There was insufficient evidence that anything on a scale worth overturning the merger election and holding a new one had occurred.

        5. I have a plan. That plan involves my making many assumptions and numerical estimates of aspects of the economy, the market I serve, my company's ability to serve that market. I come up with numbers that fit the current instant. That's my target: for revenues, for profits, for foreign currency translation gaiins (losses), for people, etc. The plan developed in 2001 and early 2002.

        Now I will be more blunt: Plans change and they change rapidly. They change most rapidly when markets, economies, and internal circumstances are changing, graphically speaking, when you are nearer inflection points than peaks or troughs of continuous curves. Because I change my earnings, revenues, Euro-to-dollars conversion, derivative performance, pension requirements, headcount, and hundreds of other factors doesn't mean I lied the first time. For that to have been a lie, there has to have been fore-knowledge or suspicion that my numbers are incorrect. Also, I have to have an ***intent*** to deceive. These are difficult to prove. But unless you have some solid information that CF had foreknowledge that the numbers she promulgated in the Merger Proxy were materially incorrect at the time she released the data and that the deception you see in the situation was intentional, you're out in the cold.

        By way of example, consider shbron's post this AM. Though it is incorrect (share price today shows no gain since the beginning of the year), I cannot prove that he is lying. In his case, it is more likely that he didn't know the statement he made was untrue (he probably didn't do the legwork that would have provided the foreknowledge that he was wrong). He also didn't intend to deceive because he truly (though misguidedly) believed himself to be correct. It might also simply be that his medication needs adjustment.

        I like to see plans change as conditions change. That shows me that management is tuning its plan to ever-changing circumstances in its markets, in the eco

      • Great post, Col Buck. To your list, I can think of a couple things I'd add as far as Carly's "ethically questionable" moves that got her merger passed (barely).

        - Spent $600+ million of HP shareholder's money on "retention bonuses", which were to be designated BEFORE the merger vote was held, but only to be awarded IF the merger passed. Talk about buying votes with the shareholder's money! I call it a bribe to vote pro-merger.

        - Spent $200+ million (estimated) of HP advertising budget, not to advertise HP products, but to attempt to sway the shareholders to her opinion. Carly had a firm grasp on the HP treasury, and seemed willing to spend whatever it took to get her way. After all, it wasn't her money she was spending, but it was her job at stake.

        - End of the voting/meeting was evidently delayed, supposedly to facilitate parking. Carly seemed to be willing to field questions form the audience indefinitely, even 30 minutes past the planned end-of-meeting. Yet when she apparently was given some information (the DB vote was in?) she abruptly ended the meeting. You see, some DB "YES" votes had not been recieved even the night before the vote. And one was allowed to change one's vote at any time, until the meeting was over. When the DB YES votes actually came in is "unknown", but you don't have to be a genius (or conspiracy theorist) to think that they might not have been in until shortly before the meeting ended, possibly not received until AFTER the planned end. But once they were known to be in - so it appears - end of meeting. No way to verify this, but why did the meeting go past the planned end point, when parking seemed to be perfectly adequate?

        - The Ann Livermore "leaked" memo, about how service revenues were going to be weak, revealed just the night before the meeting/vote. Why wasn't this revealed sooner, so that shareholders would have time to vote with this in mind? One of the supposed reasons for the merger was to "do more in services, which was a strong sector". But if services weren't that strong, the voters should have known this. Why did the memo have to be "leaked", why wasn't it made public by Livermore herself. And why was Carly apparently upset by the leak? Didn't she want shareholders to be fully informed before voting? Very strange.

        - The initial BoD merger meeting scheduled at a time when Walter Hewlett was well known to have a once-a-year, two day conflict. Why? Walter was then berated for missing the first day of the meeting. Why couldn't the BoD meeting have been scheduled during one of the other 363 days that Walter didn't have a conflict? Personally I think Carly deliberately scheduled the merger meeting at the exact time when Walter H. (most likely member to oppose her) had a conflict. You see stuff like this all the time, the old "have a meeting, only tell your 'allies' about it in advance, notify your opponents at the very last minute (such as when they are out of the office) tactic". Carly seems underhanded enough to do just this, and then blame Walter for thinking that "playing the cello is more important than HP". But WHY did she schedule it for that time? Very underhanded, IMO. How typical.

        (continued in pt. 2)

    • As he speaks of success, he means to refer to success that results in the joy and benefit of others, for example, shareholder value. In other words, an executive is only successful when others benefit, otherwise, it's merely the successful bilking of shareholder value and employee well-being for personal gain.

      • 2 Replies to numeral_i
      • You're certainly entitled to your point of view and your definition of success. And you are on the mark when referring to shareholder value, if that means total return to shareholders. But, and don't take this personally, I don't give a happy rat's ass if you are successful (or "he", she, or it is successful), though I wish you no ill.

        I simply like to see a satisfactory return on my investments. That makes me happy, and successful. That success also makes it possible for me to extend my good fortune so that it affects others salubriously: e.g. my family, merchants and charitable enterprises, though I freely admit that Bill Gates is a little ahead of me on that score.

        And if you don't wish to be bilked, be smart enough to avoid the bilking. It's not hard. From most of your posts I know you have the skills to eschew gullibility.

        HPQ Long

    • I bet 6 months or a year after CPQ bought DEC that was also receiving "generally favorable review in the financial press." Did not work out all that well...PK.

      • 1 Reply to pin_kopf
      • Unlike the current situation, EP had no plan for digestion of the acquisition...and it showed. They gave him the benefit of the doubt, at first. He met his Waterloo after deceiving the finacnial press. And it showed up in spades, to CPQ's disadvantage, when the tech sector sales fell off a cliff shortly thereafter.

        No one has given CF the benefit of the doubt, maybe except for Dan Niles. Just recall the posts here since the merger was announced (including that infamous Forbes article a while back which was a scathing attack on the merger). The jury is still out, but progress has been OK. But I know you could have engineered the required changes more quickly than CF had you been called on.

        HPQ Long

    • <<< "Can anyone point to one lasting business success that Carly has ever had,..."

      Sure...she beat the pants off an anti-merger coalition of WH+other family interests and whiny employees (who would be denied their sinecure in a company that would have to enter the real world) and pointed the company into the future. She won that battle and is now executing a plan that is receiving generally favorable review in the financial press. >>>

      You too seem to misunderstand my definition of "business success". To me, that means a lasting addition to the per-share bottom line. Carly has not done that. Defeating the Hewletts and taking over the company via a proxy fight is not a proven "business success" for the shareholders. Yes it was a success for Carly personally, and I acknowledge over and over again that she does great favors for herself. But grabbing goodies for herself is not the same as adding to the riches of the shareholders. Face it, the merger was about Carly keeping her CEO job, not about making the shareholders rich. HP stock was about $25/share when the merger was announced, look where it is now. That's a "success"?

      As to the positive PR Carly "buys" for herself (with the shareholder's money), that's a joke. Look how much HP spends advertising in Forbes, including a lot spent merely advertising the merger to shareholders. Forbes is thankful for that, and rewards Carly, hoping of course for more business from her. Fortune has fawned all over from Carly even in her Lucent days ("Most powerful woman in business" while at Lucent, as well as while at HP; of course that doesn't mean, "woman who helped her company the most"), Fortune won't admit they highlighted a self-serving incompetent. Again to Forbes, their publisher (Rich Karlgaard) fawned all over Carly after she visited him personally to promote her merger. Karlgaard even described what Carly wore to his office and how she looked (pretty bizarre comments by him, if you asked me). I guess Karlgaard fell in love with her, or she hypnotized him or something. He then wrote an endorsement of the proposed merger (the vote had not yet been held) titled "Vote Carly". It was weird, it was odd, it was creepy. But given that occurrence, it's not surprising that Forbes would run a ridiculous puff piece on Carly's "success" at HP. When HPQ earns $2/share, GAAP, fully taxed, and HP stock is above $60/share, then I'll say she was a "success" for the shareholders. Why such high standards? Because HP was already very close to those goals before Carly was hired as CEO. But don't hold your breath. Thanks to Carly's recklessness, I doubt HPQ will ever see $25 again, or even $1/share in GAAP, audited, fully taxed earnings. I'm still expecting $5/share before the end of 2004, if Carly remains CEO. Good luck.

      • 1 Reply to Alex1444
      • "Look how much
        HP spends advertising in Forbes, including a lot spent merely advertising the merger to shareholders. Forbes
        is thankful for that, and rewards Carly, hoping of course for more business from her. Fortune has fawned all
        over from Carly even in her Lucent days..."

        Go back in time a little bit: Didn't Forbes carry a post-merger article that was so rancid re: HPQ, and full of innuendo and short on facts, and lacked objectivity? I had to cancel my subscription to the WSJ to get rid of the stench of that piece when the editors at WSJ reprinted the article. Of course that happened. So CF didn't get a pat on the back from Forbes until the latest article appeared.

        And, if HPQ is spending their way to good press in Forbes, it certainly wasn't apparent until a couple of weeks ago when that magazine finally realized what others have know for half a year...that the merger was HWP's last good chance for repairing itself. I might also remind you that the magazine employed, and may still employ, Cap Weinberger as its publisher, and he needed a presidential pardon to avoid incarceration for perjury.

        A year late and a dollar short, were they.

        HPQ Long

 
HPQ
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