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HP sighs relief; Fiorina clings to hope

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CIOL Bureau
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The HP-Compaq merger is dead. Perhaps only Fiorina is still clinging onto

hopes she can get the deal done.

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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.

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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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