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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Charles Tutt who wrote (93155)	9/22/2001 4:34:35 PM
From: Elwood P. Dowd	Read Replies (1) \| Respond to of 97611

Hey, I didn't write it, I just posted it. Try this one, maybe you'll like it better. El Hopes for Houston by: skeptically 09/22/01 03:25 pm Msg: 256656 of 256658 Article from Thursday's Houston Chronicle with comments by Capellas & Fiorina. chron.com Sept. 20, 2001, 9:45PM Hopes for Houston Compaq, HP selling long term By TOM FOWLER Copyright 2001 Houston Chronicle Houston may become a part of Hewlett-Packard Co.'s growth if its planned acquisition of Compaq Computer Corp. is a success, executives said this week as they restarted efforts to sell the merits of the plan to employees and investors. RESOURCES (Hot linked at article URL) Chart: Cost of doing business in Houston and Palo Alto, Calif. Carly Fiorina, Hewlett-Packard's CEO, said Wednesday that the work force on Compaq's Houston campus could someday see its ranks grow above its current 10,000 mark because of its abundance of open office space, the experienced local work force and low business costs. "One of my desires has been to move work out of California because California has some real issues associated with it," Fiorina said. "Cost of living, transportation systems, education systems, energy systems, there are a whole set of problems." Fiorina and Compaq CEO Michael Capellas stopped short of promising a larger Houston work force -- indeed, for the short term, further local job cuts are more than likely -- but the $89 billion company created by the merger would have greater growth potential in a recovering economy. "It does not make sense with this combination for HP to put more R&D, more work in California," she said. That message of reassurance to Compaq's hometown was a priority of Capellas' and Fiorina's this week as they met with Mayor Lee Brown and small groups of Compaq employees. Last week's terrorist attacks led the companies to postpone a large meeting with employees at The Woodlands Pavilion, but Capellas said roundtable meetings have started to sway some workers who were shocked and angry about the merger plans. The merger announcement more than two weeks ago was a big surprise to the investment community, mainly because of the companies' success in keeping their months-long talks under the radar. That surprise was mild, however, compared to the shock felt as investors punished their stock prices. Hewlett-Packard shares fell 21.5 percent and Compaq's fell 15.7 percent in the first week alone, knocking $13 billion in market capitalization off the books. Shares have continued to fall, with Compaq's share price falling 4.5 percent Wednesday to $8.13 and Hewlett-Packard's falling almost 5 percent to $15.40. What was at first a $25 billion deal has now slid closer to $16 billion by some estimates. "We anticipated a negative reaction, but not to this degree," Fiorina said. "We could have been crisper about getting the news out there." The prospect of deepening economic woes may seem like another challenge to the deal, but Capellas and Fiorina said it could actually make it easier to sell to investors and easier to complete. "The slower the economy goes, the more time we have to get things done as customers begin to postpone decisions," Fiorina said. "If the economy continues to deteriorate, the logic becomes more compelling, not less." Just as Compaq decided to take its lumps earlier this year, making cuts before many of its competitors were willing to admit the depth of the problems, the two companies think it better to make the tough choices now that the merger will require now, during the downturn. "You create opportunities at the bottom of the market, not at the top," Capellas said. "So you drive growth and execute like hell during times of growth and make the bold moves now." Unfortunately, said Fiorina,...con't at link.................

To: Charles Tutt who wrote (93155)	9/22/2001 4:36:35 PM
From: Elwood P. Dowd	Respond to of 97611

Euro sales&service jobs secure...... by: skeptically 09/22/01 04:07 pm Msg: 256658 of 256658 idg.net 010917HPCompaq/ HP/Compaq won't fire Euro sales, services staff ITworld.com 9/17/01 Joris Evers, IDG News Service, Amsterdam Bureau At least in Europe, the merger of Hewlett-Packard Co. (HP) and Compaq Computer Corp. won't lead to massive layoffs among sales and service employees, HP Chairman and Chief Executive Officer (CEO) Carly Fiorina said. "We will not be cutting back on feet on the street (in Europe). With this one move we have doubled the size of our sales force and doubled the size of our professional services," Fiorina said in a question and answer session here at International Data Corp.'s European IT Forum. She took questions after a keynote speech she delivered via satellite from the U.S. because of travel restrictions after the attacks on the U.S. European management at "the new HP" will be hit, as the company seeks to save US$2.5 billion annually through operational synergies, largely by slashing 15,000 jobs. "We have overlapping management in some cases. That's a question of making personnel decisions in as rapid a manner as we can," Fiorina said, noting that the management structure at HP and Compaq across Europe is very similar. Fiorina also said the Compaq brand won't disappear. "Compaq isn't going away. The Compaq brand has a lot of equity. We will be using the Compaq brand in some of our products," she said. In her keynote, Fiorina defended the takeover of Compaq and responded to criticism voiced by analysts and others that the merger is a defensive move and in response to PC market consolidation. "This is not about PCs, but about enterprise computing. The real synergies in this merger come from enterprise computing, not PCs. This is not a defensive move; it is an offensive move. About leading, not following. We intend to reshape the economics of the industry and our competitors will follow," she said. Fiorina touted "market unifying standards and architectures," which HP/Compaq intends to follow, as the way ahead for the technology industry and the key for customers to be in control. She took a blow at rivals IBM Corp. and Sun Microsystems Corp. as businesses that "sell to the customer once and collect proprietary margins for years to come." Vendors who rely on vertically-integrated proprietary technology architectures will lose the battle with vendors who choose open standards, as the technology industry becomes comparable with the home entertainment industry or the automotive field, Fiorina said. "Vertical integration didn't work for Henry Ford and it won't work for IBM or Sun," she said. Taking a swipe at Dell Computer Corp., Fiorina said that vendors who solely base their business model on volume and velocity will not be able to survive in the long term, because of a long-term lack of research and development, marketing and sales power. Talking about services, Fiorina admitted that a combined HP and Compaq doesn't match up with rival IBM Corp., but said it can compete by acquisitions, or by partnering. "Certainly we are not of the scale yet as an IBM in the area of outsourcing and consulting. We would need to either grow organically or do some opportunistic acquisitions. We are a strong partner of Accenture Ltd., PricewaterhouseCoopers LLP, KPMG LLP. We have an opportunity to solidify a certain set of new partnerships, and interestingly all of those partners have a common enemy," Fiorina said. ....more at link............