HP sighs relief; Fiorina clings to hope

By : |December 9, 2001 0



The HP-Compaq merger is dead. Perhaps only Fiorina is still clinging onto
hopes she can get the deal done.

For Fiorina, the merger means far more than a mere business transaction. She
knows she will be fired or asked to resign should HP’s board decide that it does
not want to get the company embroiled in a nasty dog-eat-dog fight with the
heirs of the company founders.

Chances are the HP board will be smart enough not to let the company get
itself dragged through the mud. A decision to cancel the merger could come as
early as this week. Corporate boards often make major decision on the spot. And
reversing itself on the support for the merger and Fiorina would not be
surprising.

It should not take the board too long to get feedback from major
institutional investors on how they intend to vote on the merger. Failing an
outpouring of support from Wall Street, the board will likely decide that in the
interest of the company and its shareholders a quick cancellation of the merger
is the best course of action in order to get the company back to being focused
on selling product.

A huge sigh of relief could be heard Friday all throughout HP after the
Packard Foundation decision was announced. Not only does it spell the dead of
the merger, it means some 15,000 HP workers are likely to keep their job.
Fiorina had vowed to fire up to 20,000 workers after the merger in order to cut
costs.

Fiorina has been unpopular from the outset as she donned what appeared to be
a "prima donna" image. One of her first actions in office was the
purchase of a $100 million corporate jet to carry her around.

When visiting an HP facility on Roseville California, shortly after coming on
board, Fiorina had trees and bushes taken out so her helicopter could land
closer to the entrance of the facility where she was meeting with employees.

When HP sales stalled earlier this year, she asked all employees to take time
off without pay in exchange for avoiding lay-offs. But a few weeks later, she
fired some 6,000 people anyway, leaving the HP workforce feeling betrayed.

And perhaps most appalling to HP workers facing job cuts, was the revelation
that Fiorina had assigned herself a greed-dripping bonus of nearly $10 million
for getting the Compaq merger completed. Another two dozen HP and Compaq
executives would split a $100 million pot.

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