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To: Night Writer who wrote (95155)	2/7/2002 7:10:18 PM
From: Elwood P. Dowd	Respond to of 97611

Thursday February 7, 6:57 pm Eastern Time Jack Welch presses HP CEO in new role as journalist (UPDATE: Recasts with Welch interview) By Eric Auchard NEW YORK, Feb 7 (Reuters) - Former GE Chairman Jack Welch stepped into a new role on Thursday as financial television journalist, grilling Hewlett-Packard Co. CEO Carly Fiorina on whether her plan to acquire Compaq could backfire. ADVERTISEMENT ``I basically asked a devil's advocate question and tried to poke fun at myself a little bit,'' Welch told Reuters in a phone interview. ``I thought she handled it perfectly,'' he said of Fiorina's response to his tough line of questioning. Welch asked Fiorina in an interview whether support for the deal among HP's rivals could explain why European regulators approved HP's deal while rejecting Welch-led GE's (NYSE:GE - news) bid for Honeywell International Inc. (NYSE:HON - news) last July. Paraphrasing an argument made by Walter Hewlett, the main opponent of the HP-Compaq deal, Welch asked: ``Your competitors want this deal to go through. It will create chaos. They will clean both your clocks while you're doing all this.'' ``That's the one argument that rang a bell with me,'' Welch told Fiorina during an interview on CNBC financial television, a unit of GE. Later, in a phone interview with Reuters, Welch said that he was acting as a financial journalist when he questioned Fiorina, rather than in his more commonly understood roles as legendary corporate chieftain and business management guru. ``I basically asked a devil's advocate question,'' he reiterated. ``But I wasn't taking a position,'' Welch stressed. ``That was my job to try to ... get her to talk about it... That's what I think I am in that job,'' he said of this alternative career. Seeking to define a new role for himself following his retirement from General Electric, Welch has agreed to make a quarterly appearance on CNBC's morning interview program. Welch's appearance on Thursday attracted top-level interviews including the one with Fiorina and also Tyco Chief Executive Dennis Kozlowski. Hewlett-Packard (NYSE:HWP - news) first offered to buy Compaq Computer Corp. (NYSE:CPQ - news) in September 2001. But the Hewlett and Packard families, which together own 18.5 percent of HP, are opposing the bid, which is now worth about $22.7 billion. Welch said he sympathized with Fiorina in her battle to win support for the deal, even as he challenged her on the threat competitors will pose should the deal go through. Fiorina responded to Welch by saying that this argument had been made by competitors since shortly after the Compaq deal was announced in September. But she said these boasts had quieted as HP rivals have faced financial pressures of their own. ``When we announced this deal, our competitors were very noisy about all the business they were going to take away from us,'' Fiorina said in the CNBC roundtable interview. She also took issue with Welch's assertion that Hewlett competitors had withheld from European regulators their objection to the deal in the hopes it would go through and enable them to exploit the opportunities it would create. Fiorina suggested that Hewlett-Packard's diplomatic skills had succeeded where GE's had failed. ``We didn't politicize it and we didn't publicize it. We stuck to the substance of the case,'' she said of the European competition authority review. ``You're a lot smarter than I am and you were able to do it more effectively than I could,'' Welch allowed, even as he argued that a basic difference existed in the dynamics of the two regulatory battles. Hewlett-Packard has set March 19 as the date shareholders will vote to accept or reject the deal. Email this story - Most-emailed articles - Most-viewed articles

To: Night Writer who wrote (95155)	2/7/2002 8:04:29 PM
From: Elwood P. Dowd	Read Replies (1) \| Respond to of 97611

HP rivals may benefit from Compaq deal--Jack Welch Reuters, 02.07.02, 11:58 AM ET NEW YORK (Reuters) - Former GE Chairman Jack Welch told Hewlett-Packard Chairwoman Carly Fiorina that he sees the potential for "chaos" surrounding HP's plan to acquire Compaq Computer Corp. that competitors would exploit. Welch said in a television interview Thursday with Fiorina that support for the deal among HP's competitors helped explain why European regulators had given the go-ahead to HP's proposed deal while rejecting GE's bid under Welch to buy Honeywell. "Your competitors want this deal to go through. It will create chaos. They will clean both your clocks while you're doing all this. That's the one argument that rang a bell with me," Welch said, echoing an objection raised by the deal's main opponent. HP's first bid to buy Compaq in September 2001. But the Hewlett and Packard families, which together hold an 18.5 percent stake, are opposing the bid, which is now worth about $22.7 billion. The legendary GE executive made the comments during an appearance on CNBC financial television in which he sympathized with Fiorina in her battle to win support for the deal even as he challenged her on the threat competitors will pose should the deal go through. He joined journalists of the GE TV unit in questioning Fiorina, who is waging a battle with dissident shareholders, like the Hewlett and Packard families, to push through the deal. Opponents say the deal would saddle HP with a large, lwo-profit PC business and dilute the value of its printing franchise, while HP interests supporting the deal say it will create high-end computer and services powerhouse. Fiorina responded to Welch by saying that this argument had been made by competitors since shortly after the Compaq deal was announced in September. But she said these boasts had quieted as HP rivals have faced financial pressures of their own. "When we announced this deal our competitors were very noisy about all the business they are were going to take away from us," Fiorina said in the CNBC round-table interview. She also took issue with Welch's assertion that Hewlett competitors had withheld their their objection to the deal with European regulators in the hopes it would go through and enable them to exploit the opportunities it would create. Fiorina suggested that Hewlett-Packard's diplomatic skills had succeeded where GE's had failed. "We didn't politicize it and we didn't publicize it. We stuck to the substance of the case," she said of the European competition authority review. Behind the scenes European regulators turned aside complaints from H-P rivals such as Germany's Fujitsu-Siemens. Less active in the regulatory debate were HP and Compaq's biggest rivals, including Dell Computer Corp., International Business Machines Corp. and Sun Microsystems Inc. But European Commission authorities noted afterward there had been fewer complaints in the HP case, in contrast to the concerted campaign by GE rivals in the far more concentrated aircraft-engine market at issue in the Honeywell merger. "You're a lot smarter than I am and you were able to do it more effectively than I could," Welch allowed, even as he argued that a basic difference existed in the dynamics of the two regulatory battles. "My competitors killed me. They lived in Brussels," he said. Welch has been cited by Hewlett merger backers for his support of Fiorina and her board against the challenge to the deal raised by outspoken board member Walter Hewlett. Mr. Hewlett, a son of one of the company's co-founders, first voted for the deal, then turned around and mounted a proxy battle to reject it. Six weeks ago, in an interview with Business Week, he decried the dissident board member's moves as a "unpardonable, it's a sin" -- and one that panders to employee nostalgia for a return to earlier days at the six-decade-old company. Hewlett-Packard has set March 19 as the date shareholders will vote to accept or reject the deal. Copyright 2001, Reuters News Service.