HP Says PC Business is Not for Sale
Hewlett-Packard’s top brass indicated Friday that the company isn't going to sell its personal computer division, despite widespread speculation to the contrary.
"We have no intention of getting out of the PC business," the company's chairman, Ray Lane, said in an interview. "Why would we get out of a $43 billion PC business that is number one (by a longer margin in profitability)?”
"If others might look at HP as saying. ‘you know it’s worth more as parts versus the whole,” we should be willing to look at ourselves that way. So, we did," he went on to say.
In the meantime, the company is going to concentrate on correcting its dysfunctional image.
HP has a “great board that works very effectively together, and I don’t think you’ll see future problems,” Meg Whitman, the newly named CEO of Hewlett-Packard, said in the joint interview.
Although, she acknowledged, in the past HP’s board has not been run “as effectively, and as a team as it should be.”
Hewlett-Packard named the former eBay Chief Executive as its new president and CEO, replacing unpopular leader Leo Apotheker at the helm of the largest U.S. technology company.
The storied Silicon Valley computer maker is fighting to restore its crumbling credibility. The company has had seven CEOs since 1999.
Whitman noted that she took the job because “HP matters to Silicon Valley. HP matters to California, HP matters to the country. I would argue that HP matters to the world.”
“I see a tremendous opportunity to restore the luster of this Silicon Valley icon,” she went on to say. “When I was at eBay we used to look at HP because we knew we might never have been coming into existence, in Silicon Valley, had it not been for the very formative role that HP took.”
The failed California gubernatorial candidate transformed eBay from a few dozen employees in 1998 into a global Internet retail powerhouse. But the final years of her reign were marked by sputtering growth, intensifying Wall Street criticism and a string of unwise acquisitions, including of Skype.
From HP's perspective, after about two months, Lane said, "we came to the conclusion that [HP] needed to make a change," said Lane. "[Meg Whitman] was our best choice. Full stop.”
"We're in a crisis mode and we need to manage that crisis mode, and we need experience leadership," he added.
Whitman feels comfortable with the strategic direction of the company, but stressed she is not "just taking the playbook, and turning to chapter one, line seven."
"First priority is to make the fourth quarter revenue and [earnings per share] targets, Whitman noted. "We're facing economic head winds. We've got to make this quarter."
With only six weeks left in the quarter, the new CEO said, "We've got to deliver on our promises."
"Over the next 6 months, to 8 months, to a year ... I will look at what we're doing. I will make some different decisions perhaps; I will look going forward," she added.
In addition, Ray Lane has moved from non-executive chairman to executive of the HP board of directors. Also, the board intends to appoint a lead independent director promptly.
“We weren’t satisfied with our performance to shareholders to date," said Lane. “The last ten months to a year our performance has not been good. So every quarter we would disappoint the market with our operational performance, and we’ve guided down."
However, Lane did express that former CEO Apotheker did improve HP’s software operations.