Posted on Sat, Feb. 16, 2002
Which way, HP? Workers undecided
By Tracy Seipel
Mercury News
In the increasingly urgent and ugly battle over Hewlett-Packard's proposed $21.8 billion acquisition of Compaq Computer, Chief Executive Carly Fiorina's toughest audience may not be Wall Street.
Or the shareholders.
It could be HP's 88,000 employees, many of whom still aren't quite sure what to make of their whirlwind CEO after almost three years on the job as the fabled company's designated ``agent of change.'' During that time, HP has been reorganized and its goals ``reinvented,'' and just last summer 6,000 employees were laid off.
Fiorina's current bid to marry the 63-year-old Palo Alto company to Houston-based Compaq -- the largest technology merger in history -- has divided HP workers into three camps: supportive, undecided or opposed.
``You have varying degrees of support,'' said Mardi Lessey, a merger supporter and operations-support manager at HP's Cupertino campus. ``Some of it is colored by how long people have worked here, some of it is colored by their view of `the HP Way,' and what it is or isn't, and some by how it will affect their jobs.''
The company employs 11,000 in the Bay Area.
The true level of employee support for the deal has become a matter of contention in recent weeks as the proxy fight has heated up.
It's also further complicated by the fact that employees fear retribution if they denounce the deal publicly.
An official HP online employee poll -- done anonymously and voluntarily -- in December showed 65 percent of those surveyed supported the merger.
Some employees, however, point to an unofficial November 2001 online poll that asked employees about their confidence in the company's overall strategy after the fourth-quarter earnings. In that poll, 60 percent of those who responded did so negatively. But HP officials say that poll is not valid because employees may have voted multiple times and it is not a representative sample of HP.
This past week, David Woodley Packard, the only son of HP co-founder Dave Packard and a merger opponent who does not believe HP's internal polls, hired his own polling firm to survey HP employees in Corvallis, Ore. Results may be released as early as this week.
What supporters say
An informal survey of almost two dozen HP employees by the Mercury News indicates that those who support the deal believe that in the long term, the merger is worth the risk. They believe the strategy makes sense and change would be good, and they trust that Fiorina and the HP board have done their homework. The celebrated HP Way, they say, will endure.
Those who are undecided say they are trying their best to understand the logic behind the merger through media reports, the company's employee-only internal Web site and dissident HP board member Walter Hewlett's anti-merger Web site.
Those against believe the merger with Compaq is foolhardy and not a good fit. They predict a culture clash, confusion over multiple and competing product lines, and resulting internal chaos.
No matter where employees stand on the merger, their top three concerns are the possibility of unemployment, the challenge of integrating two culturally different companies, and the nasty proxy battle they say is sullying HP's admirable reputation.
``It's very unfortunate having a public battle in the media,'' said Frances Bruce, a merger supporter and content program manager at HP's Executive Briefing Center in Cupertino. ``It's disappointing.''
The effects of that fight between HP's board of directors and Walter Hewlett are rampant, according to some. (Both the Hewlett and Packard families -- who, along with their charitable foundations, control 18 percent of HP stock -- have vowed to vote against the deal.) The company believes its employees own 3 percent of HP stock.
Not a day goes by that employees aren't spending time checking their e-mail or talking about the latest news stories, company memos and filings, or merger rumors.
``To tell you we are not talking about this would be totally silly,'' said Joe Podolski, a veteran HP employee who supports the deal and who works at the Executive Briefing Center. ``You could write `Peyton Place' after this,'' he said, with a chuckle.
Others say productivity in their division is waning because uncertainty about the deal's outcome has created an aimlessness and a ``why bother?'' attitude among workers who assume any work on projects now may be scrapped after the shareholder vote March 19.
Closer parking spaces
At HP's Roseville facility, where 6,000 are employed, one worker said some colleagues arrive later than usual to work these days. The woman, who does not support the merger, requested anonymity.
``Now I can park one row closer to the building when I couldn't do that before 8 a.m.,'' she said. ``There's a lack of enthusiasm. It's uncertainty.''
But others say their work has, with few exceptions, hardly been distracted by the circus atmosphere surrounding the merger. Production in their divisions is steady if not increasing, and people are so busy trying to meet their numbers and beat the competition that there is no time to sit and chat.
``It is not a factor,'' said one male manager who also declined to be named. The man, a longtime HP employee who works at the company's Cupertino site, plans to vote against the merger. ``I am not concerned. I have evidence that, at least in my area, we are not losing customers.''
In fact, this past week, HP's first-quarter earnings exceeded analysts' expectations. Fiorina maintains it would not have happened if the workforce had flagged or the company had been losing business.
Stan Pluta, a merger supporter and supply chain engineer at HP's Roseville plant, said while most people would think the merger has created a major distraction at work, it has not, at least in his office. Discussions are civil; if anything, his colleagues are tired of hearing about the merger.
``Most people are at the stage where they want an answer `yea' or `nay,' '' Pluta said. ``They just want to be able to move on.''
Don Williams, another veteran HP employee who supports the merger and works as a briefing specialist at the Executive Briefing Center, said: ``Right now, people are saying it's going to happen, so let's make it work. Those who don't want it to work I don't think will be around.''
In addition to its regular monthly online employee polling program, HP has tried to gauge employee reaction around the deal through surveys at town-hall meetings or informal talks hosted by Fiorina, often with her executives, at various HP campuses. So far, there have been about 30 of those meetings.
Since those meetings have occurred, HP officials say anecdotal evidence shows the more people hear about the merger, the more they support the deal.
And for many, those talks have been impressive -- even Fiorina's harshest detractors will grant her that. ``I admire her and the way she can get up in front of a crowd and position things and present her case,'' said one woman who works at HP's Cupertino site and does not support the deal. ``To the naked eye, she does a great job. But I don't think she's making valid arguments.''
No desire to be mom
At a Jan. 23 session in Cupertino, one man stood up before Fiorina to express the employee mood about the merger, the proxy fight with Hewlett, and the future of the combined companies.
He compared the experience to a child watching his mother and father argue, seeing that they were going to sever ties, and realizing home was never going to be quite the same.
``I don't want to be your mother,'' quipped Fiorina. The crowd chuckled. On a more serious note, the CEO told the group of almost 100 that change isn't easy and the journey ahead would be tough. But, she said, it will be worth it.
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The Mercury News strives to avoid use of unnamed sources. When unnamed sources are used because information cannot otherwise be obtained, the newspaper generally requires more than one source to confirm the information. Contact Tracy Seipel at tseipel@sjmercury.com or (408) 920-5343. |
