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

To: rudedog who wrote (93621)	11/6/2001 11:36:37 PM
From: Elwood P. Dowd	Read Replies (1) \| Respond to of 97611

Posted at 7:56 p.m. PST Tuesday, Nov. 6, 2001 Packard displeased with direction of HP BY TRACY SEIPEL Mercury News David W. Packard, the only son of Hewlett-Packard co-founder Dave Packard, said Tuesday he decided to join Walter Hewlett in opposing HP's proposed acquisition of Compaq Computer for more than just financial reasons. Packard doesn't like the direction the company has taken, and in 1999 -- before current CEO Carly Fiorina was hired -- made it known when he resigned from the HP board after it decided to spin off Agilent Technologies. He doesn't like the merger -- which he said ``depends on massive employment layoffs -- at least 15,000, probably more.'' ``I agree with Walter's statement that gave a lot of business reasons this merger is a bad deal and I share all of those reasons,'' Packard said. And he definitely doesn't like the new culture implemented by Fiorina. ``For some time I have been skeptical about management's confidence that it can aggressively reinvent HP culture overnight -- a culture that developed over many years and was thoroughly tested under all kinds of business conditions. . . .'' he told the Mercury News on Tuesday afternoon. ``. . . I am perfectly aware that HP has never guaranteed absolute tenure status to its employees; but I also know that Bill and Dave never developed a premeditated business strategy that treated HP employees as expendable. This new approach seems likely to affect the confidence and loyalty or the remaining employees. For over 50 years, one of HP's fundamental corporate objectives has been to provide long-term employment for its people.'' Packard also said The Packard Humanities Institute, which he founded and which owns more than 25 million HP shares, would not vote its shares to support the proposed merger. He was careful to say that he was not speaking for other Packard family members or for the David and Lucile Packard Foundation, chaired by his sister, Susan Packard Orr. That foundation, started by his parents in 1964, controls 10.4 percent of HP stock, making it the company's largest single shareholder. How the Foundation's 12 board members vote could make or break the deal, observers say. George Vera, the Foundation's chief financial officer, on Tuesday said the board is hiring its own independent consultant to analyze the proposed acquisition. He said the board will make its own decision, which would probably be voted on after the New Year. In an interview, the 61-year-old Packard -- a former professor of Ancient Greek and Latin studies, and chairman and president of the Packard Humanities Institute and Stanford Theatre Foundation -- explained his reasoning. ``I sort of care more about some of the old-fashioned cultural values than I really should,'' Packard said. He is ``quite unhappy,'' for example, about the so-called ``5 percent rule'' -- performance evaluations that target the bottom 5 percent of the company's performers and then let them go. ``HP never did that, it never happened before. HP almost never laid anybody off, but HP was very careful to say that it's not like they're schoolteachers -- they did not have tenure,'' said Packard. ``But they (his father and Bill Hewlett) managed a company in a way that it was never necessary to tell people `Sorry, business is not very good, so goodbye.' '' Packard, who has known Walter Hewlett since the two were young children, said he also wanted to show solidarity and offer his moral support. ``Walter is sticking his neck out here,'' said Packard. ``Some people will praise him and some people will publicly criticize him, but I do share his views. And I thought I might as well go on the record,'' he said. -------------------------------------------------------------------------------- Contact Tracy Seipel at tseipel@sjmercury.com or (408) 920-5343.