Or, do you agree with the recently excommunicated HP board member Walter Hewlett, son of the company co-founder and a mere musician and academic in the view of current HP management, that the merger is a bad idea on the face of it, that big tech mergers have never worked, and that this one, more than most, smacks of greed and desperation? We are emphatically in the anti-merger camp, for two somewhat contradictory reasons.

First, as Hewlett maintains, the merger doesn't make compelling sense from a business perspective. The challenges of blending two large and disparate corporate "cultures" would always be formidable; in this field, they are well-nigh insurmountable. One has only to point to Compaq's fortunes in the wake of its acquisition of Digital. Michael Dell has already gone on record as saying his company is profiting from the confusion and concern the HP-Compaq merger has engendered. Look at it logically: how likely is it, really, that two under-performing companies can combine to assume a leadership role by gutting their employee ranks and merging their less-than-impressive executive talent? Hewlett argues that HP should instead focus on improving its performance in areas of core competency, such as its printer business.

The second reason we're against the merger is on moral and philosophical grounds (both of which translate into business considerations, by the way—even today). Each of these companies once stood for something. Compaq, the younger company, built its reputation with consistently reliable quality—it gave the PC clone business respectability, and did much to drive the overall marketplace.

HP's heritage runs far deeper. This was the original garage start-up, the progenitor of Silicon Valley. And the company was something more—the original Hewlett-Packard represented capitalism with a human face, manifesting a genuine concern for its employees and giving them a real stake in the company, in myriad ways. The "HP Way" made good business sense, as well—this was a company that was highly regarded not just within its industry, but by the public at large and by Wall Street (because the company did very well by traditional measures, too). As David Packard, Jr. (son of HP's other co-founder) has pointed out, people were not expendable commodities in the company that Bill Hewlett and David Packard ran. The transparently avaricious and questionably qualified (look what fine shape Lucent, her previous employer, is in) Carly Fiorina has done her best to stamp out any remnants of this special employer-employee relationship during her brief tenure (something she would maintain she was hired to do), and it is very sad to see the company's legacy brought so low.

Many have been amused to watch the proxy battle play out, before the Florida-like claim of victory by management forces. Others have been appalled. Still, it continues—just last week, a "disgruntled" HP employee released a voice mail which revealed Carly in full bloom, urging chief financial officer Bob Wayman to "extraordinary" measures to persuade Deutsche Bank to shift its bloc to the company side, a shift that may have provided HP its razor-thin margin of victory. Hewlett asserts, in a lawsuit filed in Delaware, where HP is incorporated, and coming to trial next week, that the company used threats and coercion to sway those votes. Wayman piously notes that neither he nor Fiorina "would ever act improperly in any business matter—much less use business assets to secure votes."

Of course not.

We hope Hewlett manages to prevail in court and unseat this merger, or at least put it to a second (perhaps monitored) vote. But it's unlikely this will happen. The corporate system Hewlett is confronting today long ago disavowed anything like the HP Way, and the greedy and shortsighted will probably prevail. It's not a foregone conclusion, though—Hewlett generated a lot of enthusiastic support in this quixotic battle, proving that decency and fair play (and common sense, for that matter) still have enormous appeal.

(Reviewed April 15, 2002)

Postscript, May 1, 2002: The Delaware court, presided over by one William B. Chandler III, did reject the Hewlett lawsuit, and it now appears the HP-Compaq merger will proceed. So Ms. Fiorina and Mr. Capellas will soon strive to implement the core component of their "plan," which is to reduce costs by $2.5 billion, largely through massive layoffs. How sad, how stupid, and how utterly mediocre and predictable. If Carly Fiorina is representative of the best thinking and leadership our current free enterprise system has to offer, then it's time, this May Day, to start considering alternatives. Starting with the radical proposition that genuine leaders—intelligent, experienced, multi-dimensional managers who know how to create value, rather than destroy it—should be installed atop our major corporations.