Carly Fiorina defends record as CEO of H-P, but those who remember still fume
Fiorina announces run for President, though her track record at one of Silicon Valley’s high profile companies still is remembered as very dark days for the valley
The GOP have yet another announced candidate for President, Carly Fiorina, the former CEO of Hewlett-Packard. Fiorina hopes to position herself, as everyone else seems to do, as the Washington outsider. She announcement, like her tenure at H-P, is already controversial, as her campaign failed to register carlyfiorina.org, leading to the creation of a website designed to make the public remember her time as CEO of one of Silicon Valley’s crown jewels.
The late 1990’s was the most prosperous time in the history of the U.S. The unemployment rate was 4.1 in Q4 of 1999. (It was 7.2 percent in 1992.) The tech bubble helped raise stocks to record levels not seen since the NASDAQ finally broke through 2000 levels just last month.
In July 1999, H-P named Fiorina CEO, succeeding Lewis Platt, and getting the job over the internal candidate Ann Livermore. It was a big deal that Fiorina was the first woman CEO of a major U.S. company, but if Livermore had been named CEO the same would have applied.
Fiorina had been group president of the the global service provider business at Lucent, the technology spin-off of AT&T. Lucent was merged with Alcatel SA of France in 2006.
What those of us who remember the late nineties, the rise of the Internet, and Fiorina’s tenure at H-P know, and Fiorina would like everyone to forget, is what she did as CEO of one of Silicon Valley’s great tech companies.
Fiorina, in the wake of the bursting of the tech bubble immediately started taking actions designed strictly to support H-P’s stock price, proposing an acquisition of the technology services arm of PricewaterhouseCoopers that didn’t happen, and proposing a $22 billion merger with Compaq that did. Fiorina, though, had to fight a $100 million proxy battle to get her way, eventually merging two PC makers at a time when PC sales were slumping. Then began a series of layoffs that started when the company posted a $903 million loss in 2003.
But it was not just the 30,000+ layoffs that one must remember, but Fiorina’s efforts to offshore jobs, her cutting costs to support the stock price, and her failure to drive innovation.
“When you manage through a tech recession, every tech company — every one — laid people off. It was a terrible decision to have to make,” Fiorina said yesterday. “We transformed a company that was failing to succeeding.”
But in 2005 Fiorina was fired as CEO, and many tech observers consider her the worst CEO of a tech company… ever. The reason is not just that she laid off thousands of workers, it is that those layoffs were a vain attempt to please Wall Street, boost the stock price, and therefore line her own pocket. When she left, she was granted $21 million in cash, plus stock and pension benefits worth $19 million, according to Time. At the time, the largest golden parachute for a CEO who was not also the company’s founder.
After Fiorina was fired she was named to a couple boards, and became CEO of Carly Fiorina Enterprises (a company that never filed with the IRS or filed a fictitious business name record – in other words, it doesn’t exist except to put on her resume). Fiorina ran for Senate as a Republican in 2010, the year Democrats lost seats, yet lost by 10 points to incumbent Barbara Boxer.
To win the nomination she ran this ad against her opponent Tom Campbell:
It would be nice to think Fiorina is just interested in selling a few more books, using her campaign as a promotional tool. But it would also be nice if her philosophy of business (see her piece in the WaPo arguing that business leaders should stand up to those who want to fight climate change) got a fair hearing, along with a fair retelling of her real track record as a business leader.