Posted on 02/09/2005 5:25:29 AM PST by Max Combined
PALO ALTO, Calif. - Hewlett-Packard Co., a maker of personal computers, printers and servers, said Wednesday that Carly Fiorina has stepped down as chairman and chief executive officer, effective immediately.
"While I regret the board and I have differences about how to execute HP's strategy, I respect their decision," said Fiorina in a press release.
Hewlett-Packard shares closed Tuesday at $20.14 on the New York Stock Exchange (news - web sites), but rose $2.24, or 11 percent, to $22.61 in premarket activity.
Robert P. Wayman, HP's chief financial officer, has been named interim chief executive officer and was appointed to the board of directors. Patricia C. Dunn, an HP director since 1998, has been named non-executive chairman, effective immediately.
The board will begin a search for a new CEO immediately. Wayman, a 36-year veteran of the company, will also retain his CFO responsibilities. The company does not expect to make any additional structural changes or executive leadership changes at this time.
The company plans to report its first-quarter financial results on Feb. 16. Hewlett-Packard expects results to be in line with consensus analyst expectations, after adjusting for the effects of the previously announced Intergraph settlement.
Wow! The poster child for Women Can Too Be Tough CEOs bites the dust. Does anyone have the background on this?
Sue Herera's orgasims will cease forever with this news.
Bump
She was obviously no match for Michael Dell, but she did manage to kill Compaq and send hundreds of Houstonians to the ranks of the unemployed. I hope she can't find another job, either...though I'm sure she got a golden parachute so they could dump her. Compaq people didn't.
I guess the golden girl has lost her shine.
Any HP experts (or better yet, Freeper-HP employees) out there who can give us the inside scoop?
she had an untapped goldmine in the Ipaq. They managed to poop that one out too.
I am surprised this is IMMEDIATE. There is much more to this tna meets the print. I wonder if she will be sued for the compensation she recieved for the Compaq merger?
Good news. HP's build quality has gone into the toilet since the beginning of her reign. I bought an HP laptop a year ago and am already having to replace it.
This is a shame because HP used to be known for high quality products.
Regards, Ivan
Don't forget how much she helped Bell Labs.
Any insiders have something to correct or add?
She and Tina Brown, who managed to wreck several major magazines both here and in Britain. Yet they both manage(d) to land on their feet. Go figure.
This will be interesting. How many years has it been since the Compaq merger/buyout? The two companies (from my perspective as a servicer) still aren't well integrated.
I haven't seen my fellow employees this happy in a long long time....I swear, if it were nice out, and we were allowed, we'd probably be starting a kegger at lunch....
It's ALL CARLY'S FAULT.
Good riddance.....the woman ruined everything she touched.
She walked into a company that had developed THE model for how to run a successful business and the first words out of her mouth were "You guys are slow, lazy, and need to change the way you do business"... the Compaq merger was less about getting their products or markets, but about putting their sharklike management style into control of the 80,000 employees that HP had raised like a family.
If Compaq's sharklike management style was so good, why was Compaq tanking??
Their managers don't want to hear "Wait, this has a problem that will come back to bite us in the ass"... they will fire or demote someone who says stuff like that. They want to hear "Yes sir, its gonna work perfectly!"
The problem is, when it comes back to bite them in the ass, then they start looking for a victim to take the bite. That undermines morale and leads good people to leave the company.
HP's philosophy was that you have a bunch of really talented people. Put them in a position to be successful, and they will.
The biggest problem HP had in the early 90's was due to the mistakes made by John Young (Carly's male soul-mate) in the late 80's who tried to turn the company from a bunch of small start-up like business units, into a global matrix-managed corporation with a single focus.
All right, I'll be the first to say it: women and men are different. Women are, IN GENERAL, too embroiled in personalities to be good managers. They percieve too much, and thus lose focus.
I have 55 women employees. They are good folks, but spend hours a day concerned about the the tone of voice their co-worker used when she said "good morning".
Read later..
YEAH!!!!!! Having been a victim of her (mis)management at Hp I love to see her leave.
Will she have to go on unemployment?
The MSM will be SHOCKED SHOCKED I SAY as to how many people disliked her. Expect feminists to use her being forced out as an example of the return of the glass ceiling. Its all Bush's fault.
The HP stock will be one to watch today.
No tears from me. I'm sure she will leave with million$. Too bad a lot of things can't be undone.
The HP I remember was the "Test Equipment Company" from the 60's, 70's and 80's. They were the best then. I'm not so sure they are now. I suspect that the ending of the Cold War and the general decline in the DOD budgets had to have a negative impact on that business so it seems obvious that HP would have to seek broader markets which they clearly did. But I liked the old HP better than the new one.
Yes, Fiorina who turned that company into Hewlett-Patel. Hooustonians are not the only ones that lost jobs. She practically sent the whole company to India and it still tanked.
As far as her resignation from HP goes, this stems from a difference in opinion on whether HP should be a technology company or a printer company. The printer division makes tons of cash and dwarfs all other divisions in profitibility. I see the board moving to break up the company now that she is out.
As I stated in a previous post, she is a Republican or at the least a RINO. I don't expect the feminist to come to her defence (a little British spelling)
But what kind of Republican. I've read that they make employees sign a "tolernance" agreement as a condition of working at HP.
As I recall Whitman signed a bill that would have forced the Boy Scouts to allow homosexual scout leaders. Fortunately the US Supreme Court ruled that law unconstitutional. If Fiorina is anything like Whitman, no thanks!
I remember being appalled when she was in one of the first TV ads they ran after she took over. Here is a company that was the first of the big valley companies, created a lot of the high tech culture. Did you ever see Hewlett or Dave Packard in TV commercials? No! Nice to see her fired in public like this.
I have much trouble feeling sorry for Compaq. Didn't they do the same thing to DEC and Tandem? Didn't lots of Mass. and Cupertino, CA employees of those companies get the shaft when Compaq bought THEM?
Whoa. Does Bush know this?
I don't know about you, but this is gonna put a real damper on my Women's History Month festivities.
Those companies were fading fast when Compaq bought them. Compaq would have been better off if they hadn't bought them. Lot's of mergers of high tech companies kill the acquiring company.
The problem is, when it comes back to bite them in the ass, then they start looking for a victim to take the bite. That undermines morale and leads good people to leave the company.
I have seen this over and over. Management comes up with a bad plan or fails to plan at all. Employees criticize, offer suggestions. Employees are punished first for questioning the almighty, then again later when they are proved right.
When you see a company tanking, it is probably being managed into the ground this way.
Carly Fiorina was ousted Wednesday as chairman and chief executive of Hewlett-Packard (HPQ:NYSE - commentary - research), ending a stormy six-year tenure that was marred by the heretofore unsuccessful acquisition of Compaq Computer.
Shares rallied $1.76, or 8.4%, to $21.90 after the news was released.
"While I regret the board and I have differences about how to execute H-P's strategy, I respect their decision," said Fiorina, one of the highest-profile female executives in the world.
Robert P. Wayman, the company's chief financial officer, was named chief executive on an interim basis. Patricia C. Dunn, a director, was named non-executive chairman.
"Carly Fiorina came to H-P to revitalize and reinvigorate the company," Dunn said. "She had a strategic vision and put in place a plan that has given H-P the capabilities to compete and win. We thank Carly for her significant leadership over the past six years as we look forward to accelerating execution of the company's strategy."
The company said it will begin a search for a permanent replacement immediately.
Fiorina's ouster comes about a month after the Hewlett-Packard board indicated it planned a modified role for the CEO in which some of her day-to-day duties would be transferred to other executives. Many believed the move would spare Fiorina the ax. H-P also recently announced it would combine its hugely profitable printer business with the less-successful personal computer division.
It was that division the former Lucent (LU:NYSE - commentary - research) executive hoped to salvage with the May 2002 acquisition of Compaq, a $24 billion all-stock deal that doubled H-P's revenue and eventually lifted the company's profitability. H-P earned $3.5 billion on revenue of $80 billion in fiscal 2004 and said in its release Wednesday that it expects to match Wall Street estimates for the first quarter.
But while Fiorina's marketing savvy helped push the Compaq deal through with institutional shareholders, critics charged she lacked the operational talents needed to pull off the integration of two Silicon Valley pioneers. H-P's stock ended May 2002 at just over $18 and closed Tuesday at $20.14.
CIBC World Markets analyst Ali Irani said that in the short-term, the board's decision removes the "Carly discount" on the stock.
"She's been a controversial figure, and many investors have felt that she has not set forth with sufficient credibility a path for sustainable trajectory for the company," Irani said. "The long-term implications of this move depend entirely on who the new replacement CEO will be."
Wednesday's news undoubtedly will empower voices that have called for the separation of Hewlett-Packard's personal computer business, a strategy that got a boost in December when IBM (IBM:NYSE - commentary - research) sold its PC division to China's Lenovo Group. Advocates say Hewlett-Packard's printer business alone, which by some estimates commands 40% of its market, could trade for $20 a share.
Based on the current Thomson First Call consensus, H-P shares currently fetch about 13.3 times estimated 2005 earnings. By contrast, Lexmark (LXK:NYSE - commentary - research), a pure-play printer and supplies business, trades for 18.6 times the 2005 Wall street consensus.
Still, separating the printer and PC businesses will be all the harder just months after the decision to combine them.
Fiorina's tenure has not been without success. The company got positive headlines for its version of the Apple (AAPL:Nasdaq - commentary - research) iPod and an innovative storage strategy aimed at stemming inroads from Dell (DELL:Nasdaq - commentary - research) and EMC (EMC:NYSE - commentary - research). Fiorina's critics were largely quieted in early 2004 when the company reported a string of earnings beats.
But the good news came to an abrupt end in mid-August when the company warned that both third- and fourth-quarter earnings would badly miss estimates because of execution issues in its server and storage division.
The stock fell 17% on Aug. 12. A $2 billion buyback announced in November helped stabilize the stock.
Vinnie Muscolino, managing director at Babson Capital, articulated the skeptics' case on H-P after the earnings blowup.
"The reason why we're underweight H-P is that they don't have a competitive advantage in about half their revenue, which is basically the PC and enterprise server space. And now that Dell is embarking on an initiative to gain market share in the printer space that may cap their margin opportunity in printers," Muscolino said in August.
Anticipating this reaction, I purposely wrote in parenthesis (Note: This is not positive comment).
DEC was fading, I'll agree. Tandem was not fading fast. In fact Tandem sales went up after Compaq bought them while Compaq's core PC business went down. Of course Compaq wanted to run a company with tremendous innovation like a PC chop shop, so in the long run they have not retained leadership, but I believe that Tandem stuff (HP NonStop) is still a big revenue and profit generator for HP. Not sure you can say that about Compaq stuff.
Yeah I agree it would have been better for Compaq not to buy those companies. It would have been better for those Companies (at least Tandem) not to be bought, particularly by a Texas PC maker who didn't have any background in high end computing, software or database.
Still Compaq did the deal, treated the acquired employees poorly. So there is a bit of "turn about is fair play" with the HP thing.
booked
We'll have to see if
everybody's still cheering
three years down the road . . .
My impression is
the anti-Carly people
hate her because she
kept HP intact,
preventing biz-ness vultures
fragmenting the firm
and milking profits
from product sectors before
selling them away
and making "HP"
just a brand label to put
on random products.
Let's see, in three years,
if HP's a company,
or just a brand name.
;-)
I don't have women employees, but my wife and daughters do that too. They waste way too much time and energy on analyzing something that more often than not, meant nothing.
That sounds like a component of fascism.
Came roaring out of the gate this morning after the announcement. Up 11% so far.
As one of Carly's many victims, I would have labeled it, "YAHOOOOOO!!!!! NEWS!"
Got an email this AM from a friend who was another of her victims with just a single line - "Ding dong the witch is dead!"
Dell has been kicking HP's a$$ for several years and even Gateway has been gaining market share in the PC business, probably at HP's expense. I would bet that there's a deeper problem at HP than who is the CEO--HP has become a soft, politically correct SF Bay Area company with too much management energy focused on preventing any discrimination, sexism, or excessive male agression in the workplace. People who want to develop new products, start up and new business and get rich don't want to work for a bureaucracy like HP. The computer industry has changed too and there's much tougher price competition than in the 90's. So all the excess regulation and expense of doing business in California also is huring HP's competitiveness. Simply put, Dell is winning and HP is losing the game.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.