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| David Packard Jr. blasts Fiorina
Silicon Valley shook as the eldest son of the late David Packard joined Bill Hewlett's son in denouncing the HP-Compaq merger. But David W. Packard went further and slammed the leadership of HP CEO Carly Packard said he takes exception at Fiorina's efforts to reduce operating cost through massive lay-offs and her company-wide `Weakest Link' lay-off policy that routinely fires those who fall in the bottom 5 percent of achievers. Referring to Fiorina's pledge to lay of some 15,000 people after the Compaq merger is completed, Packard said, "Bill and Dave never developed a premeditated business strategy that treated HP employees as expendable. My father and Bill Hewlett managed a company in a way that it was never necessary to tell people; 'Sorry, business is not so good right now. Goodbye'." Packard, who vowed to vote against the Compaq merger, also said he was offended by Fiorina's policy in which the lowest 5 percent of employees as ranked through their annual performance review, are summarily fired. And Packard blasted Fiorina's effort to 're-invent' the company. |
One of the fiercest corporate battles ever seen in Silicon Valley may unfold next week as Walter Hewlett, eldest son of HP co-founder Bill Hewlett and member of HP's board of directors has initiated to initiate a "proxy vote" battle.
Already controlling some 7.5 percent of HP's shares, Hewlett is expected to announce that he will ask other HP shareholders, especially those holding large blocks, to assign the voting rights of their shares to the coalition he is building against the merger of HP and Compaq.
"He's going to go to war. He could make a strong case that HP is better off not having Compaq," said Patrick Adams, a fund manager at Choice Investment Management, which owns shares of Compaq.
In preparation for a proxy vote battle, HP has hired a proxy-solicitation firm of its own. To void the deal, Hewlett needs a majority of the votes cast in the shareholders' vote on the merger proposal. Should the Packard family throw its support behind Hewlett, they would control more than 20 percent of total HP shares, which could translate into 30 percent of the votes needed, depending on the percentage of shares that are voted.
Key to whether the HP-Compaq deal will succeed -- and whether Carly Fiorina will keep her job -- is Richard Hackborn, now the elder statesman on the Hewlett-Packard board, the link to a magical past and the man who fought hard for Fiorina's appointment as chief executive more than two years ago.
Hackborn is being pulled between his loyalty to Fiorina and his allegiance to an organization that shows signs of rejecting her. Hackborn has not made any public statements on the controversy. But friends describe him as full of angst about the way the proposed merger is being received.
Much of the decision among HP shareholders may depend on the fourth quarter results HP is expected to announce this week. Should the results disappoint, many will seek to vote against the deal, which will likely bring years of further uncertainty for the new combined HP-Compaq operation.