Posted on 09/17/2015 3:49:52 AM PDT by RC one
A comparison of the tenures is a battle of bad vs. worse.
It’s well known by now that GOP presidential hopeful Carly Fiorina has never held political office and is running on her business record. As many commentators have pointed out, that’s a dicey proposition since her highest-profile job as CEO of Hewlett-Packard from 1999 to 2005 was sort of a disaster.
But in an interview with Fortune contributor and Yale School of Management professor Jeffery Sonnenfeld, GOP frontrunner Donald Trump—who has made a habit of criticizing Fiorina—took aim at a different stage of her career.
When asked about what he thought of Fiorina’s failure to secure another CEO job following her departure from HP, Trump said her time off from private-sector leadership “is not a positive,” before he switched gears to blast her lesser-known tenure in charge of the largest division at telecom firm Lucent Technologies.
“You know, if you look at what happened at Lucent under her tenure it was not a good picture. I think it may have been worse than Hewlett-Packard,” Trump said. He reiterated that point in Wednesday night’s Republican debate on CNN.
That’s quite a statement considering the criticism Fiorina has received about her record at HP. On her campaign website, Fiorina trumpets her leadership at HP, stating that on her watch, the company “doubled revenues; more than quadrupled its growth rate; tripled the rate of innovation, with 11 patents a day.” Those figures gloss over some not-so-nice aspects of her stint as CEO.
HP’s revenues did indeed double, but that was due in large part to Fiorina’s 2001 decision to merge with rival Compaq—a deal aimed at making HP the dominant maker of personal computers that occurred right as PCs were starting their long decline. HP announced the spinoff of its PC business in 2014, a final indication that Fiorina’s gamble hadn’t paid off. Fiorina was also responsible for cutting the jobs of more than 30,000 HP workers while CEO prior to being unceremoniously fired from the position in 2005. Fiorina has defended her record as HP CEO by saying that her tenure there coincided with a “difficult time” for the technology industry, and that leading the company during that tenure there coincided with a “difficult time” for the technology industry, and that leading the company during that period required making “some tough calls.”
Fiorina’s time at the helm of HP has been well scrutinized. Less is known about her stint at Lucent. But Fiorina’s failed bid for a California Senate seat in 2010 prompted Fortune to give her time at Lucent a close look.
On the surface, Lucent performed well while Fironia worked there, with revenues, profits, and the company’s stock price surging. The company even added 22,000 jobs. But dig deeper and “the story grows more complicated and less flattering,” as Fortune reported. Fiorina landed at Lucent when her previous employer, AT&T, spun it off so the equipment maker could sell gear to AT&T competitors. The timing was auspicious since companies like Worldcom, Qwest, and Global Crossing were in the process of laying fiber optic cables around the country and the world. Lucent’s sales to service provider networks—which Fiorina oversaw—grew from $15.7 billion in fiscal 1997 to $19.1 billion in 1998. In 1999, they hit $23.6 billion and Fiorina landed at the top of Fortune‘s first list of the country’s most powerful women in business.
But the equipment companies’ rapid expansion was too good to be true. Fortune’s 2010 story explains:
“As Wall Street became fixated on equipment companies’ growth, the whole industry entered a manic phase. With capital easy to come by, Qwest, Worldcom and their peers laid more fiber and installed far more capacity than customers needed. Much like the housing bubble that was just beginning to inflate, easy credit fed the telecom bubble.
Lucent and its major competitors all started goosing sales by lending money to their customers. In a neat bit of accounting magic, money from the loans began to appear on Lucent’s income statement as new revenue while the dicey debt got stashed on its balance sheet as an allegedly solid asset. It was nothing of the sort. Lucent said in its SEC filings that it had little choice to play the so-called vendor financing game, because all its competitors were too.
Fiorina says in her autobiography that she pushed back against the pressure for short-term growth at any cost, and two former Lucent collegues with whom she remains friendly back her up. On the other hand, this 2001 Fortune story, which described Lucent’s irresponsible growth habits, cites sources saying Fiorina made it known that Wall Street would generously reward companies that emphasized and delivered robust revenue growth.And an executive who sat across the table from Fiorina in a big vendor financing negotiation, when asked this week about what he remembers of the bargaining, described Fiorina as being dead set on chalking up a huge sale. He adds: “The press release was always very important to her.”
Whatever the exact extent of Fiorina’s role, Lucent was soon sucked in deep, making big loans to sketchy customers. In an SEC document filed just after Fiorina’s departure, the company revealed that it had $7 billion in loan commitments to customers — many of them financially unstable start-ups building all manner of new networks — of which Lucent had dispensed $1.6 billion.
Such vendor financing deals, Fortune explained, would have a similar impact on the telecom industry that sub-prime mortgages eventually had on housing: public companies extended loans to customers who were betting that the good times would continue while those same loans helped inflate lenders’ short-term financial results and stock prices. (Fiorina’s campaign at the time of the 2010 article said comparisons of the vendor financing deals Fiorina worked on to subprime lending were “disingenuous” and “almost libelous.”) The vendor financing deals met the same fate as sub-prime mortgages: the market turned and the debt collapsed. By the time the fallout finally hit Lucent—its shares eventually crashed to less than $1, and in 2006 it merged with Alcatel—Fiorina had moved on to HP.
Fiorina’s campaign did not immediately return a request for comment on this story.
Comparing Fiorina’s tenure at HP to her time at Lucent is a toss-up of bad vs. worse. In the end, neither is a shining example of her executive leadership, and Trump certainly won’t be her only opponent to use them as a point of attack. Yet her improving poll numbers, which earned her a spot in CNN’s primetime Republican debate Wednesday night, suggest that voters—at least for the time being—are looking past her resume blemishes or simply cheering for her as the comeback candidate.
Is that you, CW?
Sarah makes Carly(the RINO) look like a fresh pile of shyte.
I lost some money on that debacle as well...
I’d take Cruz in a heartbeat over Trump.
Serious question, if I may...
Didn’t Cruz vote for the Iran “deal” and the trade agreement?..Yes, or no..
This is sad, HP used to be the best printers. Epson was right behind them then (earlyto mid 90s).
“Didn’t Cruz vote for the Iran “deal” and the trade agreement?..Yes, or no..”
Yes, which is bad. It’s my understand he did so as part of a bigger deal with the understanding it would be blocked using other methods.
“Half the desks in America have a Hewlett Packard printer sitting on top. Almost any company would love to have a “disaster” like that...”
Out of stupidity or complacency on the consumer’s part they do.
HP invented horrible customer service and planned obsolescence - to the point of perfection. I’ve never been impressed with anything HP - their hardware has always had issues and is the cause for almost all PC repair woes I have dealt with. I won’t use anything of theirs unless it is free and even then I think twice about it and generally shy away.
Trump failed at the casino business which, up until that point, had been thought impossible to do.
....................................................
In Atlantic City, all the casino’s there have failed or are failing.
Thanks. Too many FReepers are innumerate and it’s a problem in the general population as well.
“,,,,, I like Cruz also ,,, ... Trump is saying what people want to hear ,,, they want that fence . I just don’t trust him to deliver the goods ,, in the past he’s been all over the board with his positions on the real key issues . Trump is vague and presents little in the way of solutions other than a fence .”
I agree. I like Cruz a lot but don’t completely trust him on legal immigration. And you are right that Trump has been all over the map in the past, so how can we know he won’t pivot again?
Nevertheless, and regardless of how this all plays out, I’ll always be grateful to Trump for forcing the immigration issue into the debate and for getting together with Sen. Sessions for his immigration policy positions.
For such a terrible company, they sure do seem to be making a lot of money...
Sure HP suffered during the Tech Crash. But there are a lot of companies that employed hundreds of thousands of workers that just don't exist anymore. Sun Microsystems, Gateway, Atari, America Online, Wang, Alta Vista, Nokia... the list goes on and on. More companies failed than survived.
HP weathered that storm, and has emerged stronger. Now, you can say it did so in spite of Carly Fiorina, but you can't fault her because her company survived.
They weathered the storm because of name recognition and corporate accounts. They survived in spite of carly. They still survive to this day due to marketing and name recognition.
Quote-Thanks. Too many FReepers are innumerate and it’s a problem in the general population as well.
I see it too. I still can’t get a good answer from anyone why His Holy Word instructs what was, is or will be done on His 3 types of days (instead of 2) in Ezekiel 46..
1. New Moon Days- gate opened
2. 6 Work Days-gate closed
3. Sabbath-gate opened
He separates New Moon Days from His 6 Work AND His Sabbath.
That count would then be to 8, not 7. Unless the Word is misprinted.
It seems the whole world doesn’t count too well.
PCs were starting their long decline?
Still selling very well: http://www.worldometers.info/computers
Another Wall Street pump and dump scheme.
..... Such vendor financing deals, Fortune explained, would have a similar impact on the telecom industry that sub-prime mortgages eventually had on housing: public companies extended loans to customers who were betting that the good times would continue while those same loans helped inflate lenders’ short-term financial results and stock prices.
Here's is your claim:
Trump started with about $100 million in 1968. That’s about $671 million in today’s dollars.
During the 20th century the stock market returned an average of 10.4% a year. We’ve accounted for inflation above, so investing $671 million over 45 years at 10.4%/year gets you to $57 billion.
You can't inflate the 1968 dollars and then magically put that amount into the stock market and base your expected growth off that. Simply not possible.
When you put $1 into the market, and the market doubles, you end up with $2. If inflation cuts the value of that dollar in half you still have the $2, even though it now only buys as much as your original $1. If deflation were to make the dollar double in value, you would still have $2 based on the investment above, but it would have the spending power of $4 compared to the original $1. It doesn't change whether the dollar is worth more or less.
Bottom line: Your "math" is seriously flawed. You can't take the original investment number and apply potential inflation to it to get your original investment amount.
So by that logic, we can't fault Obama for anything if the US survives? The air sort of comes right out of that argument when you think about it.
We most certainly CAN fault Carly for poor performance at HP. They fired her and, under new leadership, were able to turn it around. Unless she totally put them out of business she can't be held accountable? We live in different worlds apparently.
Did you listen and see how she spoke last night. Imagine that in a boardroom.....deeeeeesasterrrrrrr
She has the facial expressions of a Disney villain.
Cruella DeVille.
I think that the face comment will eventaully stick and take her out
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