Corporate mandated "nothing to see here", yet again from HP.
You know what, HP? You are right. There is nothing to see there. Shame, that.
Somewhere, Bill & Dave are spinning. Perhaps HP could harness it & generate a profit.
The decisions to acquire Palm, Autonomy and EDS, all of which are hard to qualify as qualified successes, have failed to result in any of Hewlett Packard's board members losing their seats. The eleven-strong board all survived yesterday's annual general meeting, despite previous rumblings that some were likely to feel …
That is expected.
It is a natural result of the move from company to investment fund pensions in the last 20 years. As a result of that move the "investment shareholder" is now extinct. 90% of the shares are now in the hands of people who also sit on the same company boards again and again.
In theory they are supposed to have interest in getting some ROI. In practice, there is noone to question if they are getting it so they continue the incestuous provision of kickbacks for "friends and family". That is the big difference between a large pension fund and any other form of investment - it is opaque to scrutiny and does not need to return anything to anyone for so long that they can do whatever the f*** they want.
As in this case - just see how many of the board are also on boards (or consulting) various investment and pension funds.
Nuff said - we are all doomed. So these are not the corporate governance and responsibility you are moving for. Move along.
To think that for many decades HP was a beloved & admired company whose innovations were only equaled by product quality & tank-like durability.
Nowadays it is a company with no direction with overpriced products such as large format printers that break after a year at the most, a management that thinks acquiring companies will miraculously boost overall profits, and a cosy yes-ma'am board with a 100% success rates in crappy acquisitions.
It is a remarkable illustration of pension funds mot doing their jobs as shareholders and shareholders consultancies either mot being heard or providing inane recommendations.
Most of all though it shows board members with no decency and no self-respect. They should have recognized by themselves the utter failures of acquisitions they championed and resigned.
Interesting note on this topic. Whitworth, fund manager with a large block of shares, was already named to the Board and he is more or less the voice of the fund managers. He has some sort of agreement where he cannot ask to break up the company, because that is his MO, for two years as a condition of his Director seat, which started over a year ago. I wonder if they have some agreement where Whitworth and friends are giving HP's management two years to turn the company around or they are going to start making noise.
In their Itanium trial with Oracle, HP claimed that a fair damages award for Oracle's drop of Itanium would be $4 to $4.2 billion, with a b, for the uncertainty caused. Oracle decided to compromise and offer HP negative $95 million. Equally ridiculous on all fronts, HP thinks that Itanium would have just kept sailing along without any lost installs through 2020 if not for Oracle's support drop. Oracle thinks that not only do they not owe HP anything because Itanium was and is dead, but that HP owes them $95 million because if HP had told their customers the truth about Itanium's impending end of life, they would have gone elsewhere... and apparently $95 million in profit would have gone to Sun by Oracle's numbers. No holes in any of that logic.
.... and Cities and Citizens too just like Numbskulls and Bones would.
????? Thus proving beyond a shadow of any doubt that stocks and shares markets/bourses are artificial constructs with impotent algorithms in charge of the space to try and maintain and sustain a status quo fantasy rather than reflect an entrepreneurial novel intellectual property marketplace delivering stable progress and equitable shared prosperity ???????
Try putting that genie back in the bottle and see what IT does to you.
Its pretty obvious the said acquisitions were all about board members securing massive & fairly immediate payouts and not actually about the long term strategy of the business.
Reminds me of the BAE/EADS shambles recently when the new CEO finally admitted it wasnt necessary but said something like it "seemed like a good opportunity....". For who you have to ask...
Really ? Any evidence ? As that Frenchman said "everything attributable to incompetence should not be blamed on malice".
I assume they knew they had serious issue and instead of fixing their existing business (which means lots of hard, diligent work), they approved "silver bullet" solutiuons. But maybe you can share some facts supporting your argument.
In my opinion, HP was stuffed the day Dave Packard was no longer able to call the strategic shots. Or maybe HP was stuffed the day Dave and Bill decided their own kids should become spoiled brats and essentially ignore their property and "live off the money". Or the day Dave self-deluded himself that "MBA managers can run our business best".
The truth is that HP has become Owner-Less. It's effectively Abandoned Property. There are many more corporations with similar issues and their competitors with REAL owners such as BMW/Quandt and VW/Piech-Porsche generally eat into the business of the owner-less corpos.
I actually like this, because it invalidates those mechanistic ideas of the current economic-theory orthodoxy. You CAN NOT buy success with money.
You ask, I'll tell you: the Mergers and Acquisitions con merchants in the City.
They get paid to do the pre work.
They get paid when the transaction goes through.
They don't lose any of that when the "new improved" company doesn't live up to its promises.
Make the rewards of the M+A folks dependent on the five year success of the changes they're proposing. Problem solved.
...no-hopers and good old boys and gals.
I give in, what does it take to get these people out, will they stick around until this once proud company is ground into dust? Probably - while they can milk it for their board salaries and the executive members can still draw their obscene salaries and bonuses - sigh.
Still, I should be thankful of the 3% pay increase I have had over the past 6 years.
AC for obvious reasons :-)
The only hope for HP is that a tycoon like Ellison, Musk, Bezos or the like will buy them at firesale price and turn around the parts which have something unique and valuable left.
Given how they thoroughly destroyed their leading-edge position in CPUs and operating systems (MPE, VMS !) and sold off their unique test/measurement/medical/chem analysis business, I have some doubts there is anything left to be turned around. Maybe that Autonomy thing can be developed into something, if they haven't pissed off the core technologists already.
Too much money corrupts rational thinking and HP had massive amounts of money in the 90s.
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I remember when HP spun off Agilent T&M. I was really sad it happened. I didn't think Agilent would live up to the old HP standards, and possibly not survive.
Today, I'm glad the spin off happened. Agilent is stronger and a better managed company than today's HP. T&M would have been drug thru the mud with the HP of today and the test equipment would be garbage.
Hey, Fiorina, still think Compaq was a good buy??? (dumba$$)
Do you really think Fiorina had ANY clue about the real strengths of HP ? She never developed anything. A pure MBA drone without any real work experience* whatsoever.
* developing or manufacturing some sort of technological system
She was hired because of the new-age crap ideology of "women are discriminated in the workplace". The truth is that they are discriminated because they often have little to no frontline experience in developing or making acutal complicated stuff from rocket motors to digital oscilloscopes. But hey, that's politically incorrect.
As a background you have to know HP was essentially built on the electronic warfare business of WW2, Korea and Vietnam. These high-performance scopes, microwave power meters, frequency standards and so on were in most cases used to design better radars, jammers and radios to kill the Nazi|Commie|YelloMan.
When I was with HP Germany in the 90s somebody asked the country manager "how much money we make with military-related sales". The country manager responded something like "I am tired to hear these questions, the business in negligible and something like 2% of revenue".
So HP management essentially denied their heritage in Electronic Warfare and were ashamed of it. They did nothing to explain that it was the former core business of HP which grew the impressive engineering capabilities. They did nothing to explain how that defense-related business was ethically OK to (a large degree at least).
..... which anyone with an ounce of sense can see is the most worthless business culture ever created. From the middle management layer up most of these guys have never worked on the shop floor so to speak. You can't run or improve a business unless you know how it works, and you can't find out how it works through BI or CRM reporting.
Whenever I have been a supervisor/manager/dept head I have always taken the view of the guys on the floor. No matter how high up the ladder I climb (I keep slipping because I say 'No' occasionally) I will still be a support tech at heart. To simplify consider a manufacturer, it has a production layer and a management layer, remove the management layer and the production layer will happily continue for a considerable amount of time. Remove the production layer and the company is dead.
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