Sep 23, 2015

How successful was Carly Fiorina as CEO of HP?

Carly Fiorina points to her experience as CEO of Hewlett-Packard as a reason why she should be president. How well did she do as CEO of HP, and would it prepare her to lead a country of over 300 million people?
If you look at her term as CEO in the most charitable light, it wasn't a complete disaster. It was just a moderate failure tainted by serious scandal and a disdain for the law. She hired private investigators to spy on HP's board members and journalists because she didn't like some of the information that was coming to light. HP was also fined due to her predilection to bribing government officials in other countries where it does business.

She made use of a Dubai subsidiary to circumvent sanctions against Iran. This essentially discredits any criticism that she offers about the nuclear agreement between Iran, France, Britain, Germany, France, Russia, China and the US in my book.

She also eliminated 30,000 jobs at HP, while seeing the value of the company tank.

Arguably, HP's acquisition of Compaq under Fiorina had long term positives for the company, but much of that position is revisionist wishful thinking.

What the press has to say about her time as CEO and the Compaq acquisition:

"She’s referring to HP’s annual revenue, which rose above $80 billion after Fiorina pushed through a 2002 deal to buy Texas computer-maker Compaq, which had $40 billion in annual sales before the deal.

HP, however, continued to struggle after the massive acquisition. Profit fell from $3.7 billion in 2000 to a net loss of $900 million in 2002. While profit recovered to $3.5 billion in 2004, the company missed some key earnings projections along the way.

To be sure, the 2001 dot-com bust hurt many tech companies, including HP. But despite Fiorina’s efforts to cut costs by slashing 30,000 jobs, HP’s stock fell 50 percent, lagging behind rivals IBM and Dell. She was ultimately fired after clashing with directors who pressed her to share authority with subordinates."

"Here are the facts: In the five years that Fiorina was at Hewlett-Packard, the company lost over half its value. It’s true that many tech companies had trouble during this period of the Internet bubble collapse, some falling in value as much as 27 percent; but HP under Fiorina fell 55 percent. During those years, stocks in companies like Apple and Dell rose. Google went public, and Facebook was launched. The S&P 500 yardstick on major U.S. firms showed only a 7 percent drop. Plenty good was happening in U.S. industry and in technology."

This was not the performance of an effective leader. Carly Fiorina's time as CEO of HP will be remembered as one of scandal and failure. Nothing in her record suggests that she is qualified to be president of the United States.

Answer this