Measure for the Men and Women of Hewlett-Packard I APRIL 1977

Measure For the men and women of Hewlett-Packard I APRIL 1977

• New proof of Einstein theory - pages 2-4 • Renegotiation - unnecessary burden - pages 5-7 • New ways of organizing work - pages 8-12 • The great all-Europe HP ski race - page 13 • From the president's desk - page 15

www.HPARCHIVE.com Another proof for Einstein...

Lab director Len Cutler and HP atomic clocks help prove general relativity theory

o The theories of Albert Einstein are effects would be working against each resonance and measures it so precisely that nearly 75 years old now, and several gener other. But, as any science-fiction buff it would take about 30,000 years for the ations of scientists have relied on them. knows, velocities approaching the speed clock to gain or lose even one second. The With the exception of a few skeptics, of light would age an interstellar traveller U.S. Bureau of Standards, the U.S. Naval modern-day physicists and astronomers very slowly in comparison with his friends Observatory, and similar agencies in other generally accept the curvature-of-time on Earth. countries rely on HP atomic clocks. In and-space concept as fact. Widely held be Experiments conducted in 1971 tend fact, the official definition of a second is liefs about the evolution of the universe to bear that out. Under the direction of now based on the oscillations of the free are based on relativity theory, and Professor Joseph Hafele of Washington cesium atom. Santa Clara Division also Einstein's hypotheses are considered "a University and Richard Keating, an as makes rubidium standards, which have dif cornerstone of modern cosmological tronomer with the U.S. Naval Observatory, ferent characteristics but are also quite thought," as one scientist put it. HP atomic clocks were flown around the stable and accurate. But can these theories, involving the world in jet airplanes and then compared The experiments in the early seventies effects of velocity and gravity on the pas with identical stationary clocks at the ob tested the effects of velocity, but the flying sage of time, be proven in a laboratory? servatory. The time differences were as clocks were also subjected to higher gravi For Einstein himself it would have been predicted, and although they were infini tational potential during the flights. Last impossible, but with today's technology tesimal, it's all in a day's work for an HP year another experiment - set up by Pro the effects are definitely measurable. Some atomic clock to measure accurately in fessor Carroll Alley and his associates at experiments using HP's super-accurate nanoseconds - that is, in billionths of a the University of Maryland, and supported atomic clocks support the view most scien second. by the U.S. Navy - went a step further tists hold - that the "time-warp" effects These so-called "atomic clocks," made in studying the gravitational effects that theorized by Einstein are very real. by HP's Santa Clara (California) Division, could be predicted by Einstein's general The effect of velocity is to slow down are actually cesium beam frequency stan theory of relativity. Again, the Naval Ob or stretch time for the object in uniform dards. Since HP introduced the first such servatory participated. The plan was to motion. This is a prediction of "special" instrument in 1964, they have proven so carry the clocks to a high altitude, circle ... relativity. General relativity theory, in ad accurate and reliable that they've replaced slowly for an extended period of time, and dition, maintains that clocks run faster in celestial methods for keeping international bring them back to confront the identical regions of high gravitational potential. standards of time. clocks on the ground. Therefore, since the potential increases as The technology is based on the fact Dr. Len Cutler, director of the Physical one moves away from the Earth, clocks that the cesium atom will resonate or oscil Research Laboratory of HP Labs, had should run faster in the air than on the late exactly 9,192,631,770 times per sec played a role in the earlier Hafele-Keating ground. On a flight into space the two ond. The HP instrument tunes in on that research and was to serve as co-investi-

www.HPARCHIVE.com An elaborate "clock box" provided a benign environment for the HP cesium standards used in the University of Maryland experiment. The clocks were protected from vibration, magnetism and changes of temperature to reduce these in fluences so they would not mask the effects being looked for - that is, the phenomena predicted by Einstein.

gator with Professor Alley. Len was one of the principal designers of HP's first cesium standard, and has been closely in volved with the technology ever since. "One of the things I did was help de sign a box for the HP clocks," Len said of his association with Professor Alley. "The clocks had to be in a benign environment. The temperature had to be constant within one or two tenths of a degree Farenheit, they had to be isolated from vibration, and they needed magnetic shielding. I also modified the cesium standards, which al ready had the new high-beam flux tubes, to further improve their performance." A Navy P-3C aircraft was outfitted for the tests, and the equipment on the ground was installed in a temperature-controlled van. Two hydrogen masers were used in addition to the ensembles of HP clocks. Besides face-to-face comparisons of the clocks, a system for directing laser pulses at the airplane in flight would measure the drift as it occurred. Physicist Len Cutler, director of the Physical Research Labora Another major contribution Len made tory of HP Labs and one of the world's foremost authorities to the success of the experiment was for on the technology of atomic clocks, has participated in several mulating the best theoretical methods of experiments that tend to confirm Einstein's theories. analyzing the enormous amounts of data acquired. Five fifteen-hour flights were made at an average altitude of 30,000 feet. The flight path was a racetrack pattern flown (continued)

www.HPARCHIVE.com proving Einstein

Students and scientists worked inside an air-conditioned van (at right) to monitor the experiment and handle the reams of data acquired during the five flights. The Patuxent Naval Air Station (at left), where the aircraft and van are shown side by side, served as home base for the research team.

inside an area restricted to military air at 186,000 miles per second - moves only results definitely make it more believable." craft, and the plane was tracked by radar one foot in a nanosecond. Preparations are underway for some to measure its position and velocity every Professor Alley reported his findings additional flight experiments supported by second. to a committee of scientists last June. At the United States Navy and Air Force. The distortion in time, or the differ the same time, he pointed out that the These will look at other general relativistic ence between the air and ground clocks, importance of these studies goes beyond effects. turned out to be typically 50 nanoseconds the laboratory. "We now have clocks so Both Alley and Cutler hope the Na gained from the gravitational effect and stable," he said, "that we have to make tional Aeronautics and Space Administra 5 nanoseconds lost due to the plane's allowances for the general relativistic tion will allow additional relativity experi velocity. The airborne clocks thus moved effects described by Einstein in normal ments to be conducted aboard Skylab II. ahead 45 nanoseconds - almost exactly human affairs. These views of Einstein are If that happens, it will be the first time HP as predicted using Einstein's hypothesis. not just relevant to theorists, they are now atomic clocks have been carried into outer The precision of the experiment, accord becoming relevant to engineers." space, where they can be subjected to ing to Len, was about 1~ percent of the Len Cutler calls the experiment "a both high velocity and high gravitational effect. Since the effect is very small very powerful convincer." The effects of potential. about one part in a trillion - it required velocity, he feels, are generally accepted It may finally put to rest any doubts measurement accuracy and stability of by scientists. "But the general theory of still remaining about Einstein's theories. about one part in 100 trillion. For some relativity is less believable, because the idea of the time interval involved, con predictions are unusual and the experi sider the fact that light - which travels ments are so difficult to perform. These o

www.HPARCHIVE.com D "The proposed Renegotiation Reform Act of 1977 (the so-called 'Minish' bill) Renegotiation Act: poses a very serious threat to the way HP and many other non-defense companies do business. It will give the government the dubious satisfaction of controlling profits and profitability. The price the A wartime necessity becomes a peacetime pain government will pay for this control will and the ache may get much worse be higher prices for the products and services they buy." tor industry and U.S. taxpayers . .. -Jack Beckett, director of government relations, Hewlett-Packard.

"There seems to be a naive belief by the proponents of renegotiation that (continued)

I-H. R. 4082

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11 \ t 1 I 1~I~d

www.HPARCHIVE.com Renegotiation Act

industry's administrative cost burdens can "Congress and proponents are totally Any legislative act that draws such be absorbed without any impact on the mistaken if they think renegotiation fire and which offers such opportunities economy. These costs are passed along protects the government against excessive for misunderstanding and mischief merits in the form of higher prices to all custo profits by the major defense and aero some explanation: mers, including the government. Added space contractors. Most of these contracts, Historically, renegotiation of govern to such non-productive dollars is money such as those on a cost-plus incentive fee, ment contracts was first legislated by the spent by government to regulate, legislate, already are or can be made subject to U.S. in 1942 at the peak of war-produc provide administrative oversight, and the redetermination of profits; there's tion frenzy. The law was designed to allow like. To conclude that the renegotiation absolutely no need to employ the Renego the government to purchase large quanti process pays for itself and makes a profit tiation Act on their account. It's the ties of mass-produced products and bulk for the government is incorrect. This act smaller firms producing commercial foodstuffs "right now" without first hav does not even merit the time and con products purchased off the shelf by the ing to verify cost estimates or price data; sideration of a zero-base budget review. government which are burdened by that would come later during the rene It should simply pass away like all renegotiation." gotiation process, and in time a charge dinosaurs." would be levied by the government if it -Ed van Bronkhorst, vice president found profits had in fact exceeded certain -W. M. Schofield, director ot treasurer, Hewlett-Packard. government relations tor Financial standards. Even so, products that could show 35 percent "commercial article" Executives Institute (Financial "The bill would make renegotiation sales were completely exempt from the Executive, Dec. 1976). permanent. The cost of administering process because, it was held, such sales such an expanded renegotiation process established a fair market price which the would far exceed any recovery of excess government could accept. profits." The wartime law was allowed to lapse -WEMA, association ot the electronics with the ending of hostilities. But a new industry, bulletin ot Feb. 15, 1977. version was enacted in 1951 at the out break of the Korean War. The exemption "The most important weakness of level was set at 35 percent commercial renegotiation is that it focuses on sales. This version remained in effect until 'excessive profits' rather than excessive 1968 when the exemption was raised to costs. HR 4082 adds substantial report 55 percent; this law technically expired ing costs and auditing costs, and increases last September, but the process goes on the cost of doing business with the because of a backlog of four or five years! Federal Government. Other specifications A much tougher substitute, virtually iden and regulations already make it more tical to the proposed 1977 bill, failed to expensive to produce a product for the pass the Senate in 1976. Federal Government than for the com In the course of working with the Re mercial market, and HR 4082 will add a negotiation Board over the years, Hewlett substantial increment to these costs. Packard made the last of very few re Thus, while the renegotiation act may payments in 1953. Yet we still must go recapture some profits in the future, it is through the process which, according to almost certain that added costs will be a recent study, has come to cost the com larger than any possible recovery of pany some $200,000 per year in extra profits." administrative expenses. HP management sees that cost as a tolerable, if unneces- -Dave Packard, chairman, Hewlett-Packard.

www.HPARCHIVE.com 1 1 sary, burden. In almost all cases, HP Disclosure of information-Under the If they isolate government business in I product lines have qualified for exemption Freedom of Information Act, proprietary a government-products division, the price ~ because of their predominantly commer information vital to HP would become to the government will be higher (though cial sales-well over 55 percent. Overall, available to competitors. In past dealings the profit may be less). Or, if many of sales during the past several years to the with the government, Hewlett-Packard these firms find government business not U.S. government-DOD (Defense), NASA has vigorously opposed attempts to open worth the risk, the field will be left open (Space), ERDA (Energy), FAA (Aviation) its books to the advantage of competitors to others whose ability to deliver quality and GSA (General Services)-have aver and others. The company invests an av products-especially in higher technology aged about 15 percent of total HP ship erage of 10 percent of every sales dollar areas-is uncertain. Either way, the gov ments. in developing hundreds of new products ernment will lose far more than it can Now for the bad news: The 1977 bill whose success is wholly dependent on a reasonably expect to recoup in excessive would require audits of all product lines combination of technical innovation as profits. A recent study by the Defense sold to the government. The "commercial well as cost benefit to customers, and in Science Board concluded that the U.S. article" exemption under the new bill timate knowledge of its markets. Any dis government would be able to save $80 would be set at 75 percent, and the proc closure of such information, intended or million annually by buying electronic test ess of determining excess profits would not, could clearly jeopardize the hoped equipment "off-the-shelf" compared to apply to all product lines below that per for successes. present purchase practices. centage. It would not exempt product One likely result is that government In effect, renegotiation gives the gov lines above that percentage from being business could become less and less attrac ernment a second crack at figuring its bill. tested for profitability. This, too, would tive for HP and many other firms in the Yet, its peacetime purchasing process involve annual auditing, so that even if small to medium size range. Ironically, need not be hasty, and it can do all the an HP product line has one percent or most of the larger firms doing government shopping it wants via competitive bidding. less of its sales going to the government, business will be almost totally unaffected Commercial customers don't get to re audit by government auditors would be by the Minish proposals. Defense and negotiate, nor do they seek to do so. essential to verify profitability. aerospace contractors already are subject Fortunately, many members of Con The new act also would abolish the to almost total audit, including price ad gress to whom the Minish bill's weak reasonable practice of "averaging" profit justment clauses in their contracts that nesses have been revealed are ready to ability among various product lines. Each give the government a "second chance" challenge it. Short of its outright defeat line would be assessed on its own, thus at curbing excessive profits. Many large in upcoming House and Senate sessions, exposing the higher profit items to higher commercial companies have created spe a wise disposition of the bill would seem levies without any compensating allow cial subsidiaries or divisions for the pur to be that proposed as an amendment (HR ance for less profitable business (nor, it pose of conducting all government busi 5257) by Congressman Pete McCloskey should be noted, taking into account ness, effectively buffering their commer (R. Calif.). This amendment would make those very favorable deals that the gov cial products from the cost burden of re renegotiation necessary only during pe ernment has made from time to time and negotiation. riods of national emergencies. In the think which HP has been able to accommodate Prices of products - Government ing of many citizens, that's where it by "averaging"). should get the fairest possible deal in its belongs. 0 The implications in all of this for HP purchasing. But, because of the probable -and obviously for many other firms effects of renegotiation, it stands to pay are all too clear: considerably higher prices for those com Costs-HP estimates the expense to mercial products it presently buys from the company for administering the re predominantly commercial firms. If these quirements of the Minish bill at close to firms stand still and "take it," their costs four times the present cost. Government will inevitably be higher and be passed auditors would become fixtures at virtu along in the form of higher prices to ally all of HP's U.S. divisions. Cost everyone. accounting requirements far in excess of HP's own needs would be specified by the government. The ranks of the Rene gotiation Board itself would swell from about 400 people to more than 3,000.

www.HPARCHIVE.com "We do the whole thing!"

www.HPARCHIVE.com ~======::======:::1 In search of improved productivity, HP divisions Well, what's so neat about that? Eric find ways of giving people greater responsibility for Wlodyka who works with Lena, says, "It's much more interesting. You feel like their work - and their workday. you want to do a better job - because you're going to have to check it out and be responsible for it. You learn all the steps, and when you do, you can find easier ways - because you know the reason for doing things. The days seem to go much faster." o At long last, some of the more influen Packard has been very much involved in "Learning the whole job was a neces tial as well as farsighted business and in the process of exploring various answers sity for us," indicates p. c. assembly night dustrial organizations are beginning to of its own almost since its founding. supervisor, Basil McCulloch. "Five years grasp a fundamental fact about the way In the earlier years, that participation ago when the second shift was instituted people adapt and react to various forms was spontaneous and undefined. There in p. c. assembly, the entire group, includ of organizing large-scale work activity. was no "Management by Objective," no ing myself, were neophytes. We all sat These organizations find that when "Job Enrichment" programs, no "vertical down to find out how the work should be they treat their people as adults ("This is integration" of production, and the like. done. What has now evolved? A compat the goal; can you help us reach it?"), they There was simply the desire to give HP ible team of confident, self-reliant indi get back adult responses ("We can do it people the opportunity to make their jobs viduals performing all aspects of the job and do it betted"). more interesting and productive by en from decision-making to documentation." This new style, which has been recog couraging them to make some basic deci Similar thoughts are expressed by nizable as a movement for about 20 or sions about how they went about their people in the Waltham instrument (patient 30 years, flies straight in the face of age work. That's still a fundamental concept monitoring) assembly area, which also old beliefs that you have to exert parent underlying the "HP way." But it continues changed over to work integration last like powers ("Do as you're told!") to get to take some new and interesting forms as year. Supervisor Paul Sullivan credits the things done. Of course, the doers in this HP divisions expand and explore the con step with several important improvements case have little choice but to respond as cept. The following is a review of some of in productivity and savings. First, with children ("Tell us what to do!"). And that, their recent undertakings in several manu people taking responsibility for obtaining naturally, further reinforces the feeling facturing areas: their own information and parts, the lead that you have to run the show with a strong people - Eileen Loring and Jeff Clare voice of authority sounding from on high. have been freed to take on some of Paul's Simple, straightforward and preferable ena Chestnut of the printed-circuit records keeping and planning work. Paul, as the new style may seem when contrasted L assembly area at Waltham Division in turn, has been able to broaden his with the old authoritarian way, in reality just about sums it all up when she says: responsibilities to include supervision of it is far from easy to bring off. So much "We do the whole thing - right from the systems cabling and test departments. agreement from top to bottom is involved. scratch." By this she means that about The net effect has been a significant So much understanding of the economics 20 people in the department individually reduction in the overall need for direct of the business at a low level. So much take a job from start to finish. Previously supervision. goodwill and dedication. So much prac the work progressed from person to Productivity in the integrated areas tice and experience. So many barriers to person, and station to station. Now it's has shown a significant upturn. Most lower. And by no means least, is it really been "verticalized and integrated," ex telling, the time required to assemble a more efficient and productive? If it works pressions widely used to describe the new finished instrument is going down. for jobs A and B will it necessarily work approach to product assembly (as opposed As mentioned before, it's not some for jobs C and P? to "functionalized" or "fractionated" thing you rush into unprepared. John Those are all very practical concerns which more or less describe the kind of Dockstader, the division's productivity that arise when organizations attempt to specialized production lines set up by improvement coordinator, worked very make changes in this direction. Hewlett- Henry Ford). closely with the various participating (continued)

www.HPARCHIVE.com departments in setting up what he calls the EPIC program - Enlarging Productivity Improvement Capabilities. he basic principle ofindividual respon The essential ingredient, says John, T sibility for work has been developed is that people be given all the information and applied with special vigor by HP's needed to plan and execute their individual manufacturing operations at Boeblingen growing responsibilities. That takes in the German Federal Republic. It was considerable planning and training and there, for example, that flexible work we do the whole thing evaluation. The flexibility of the new hours got its first big test. Srini Nageshwar, system accommodates people who prefer manager of calculator operations, recalls the old format of work. The EPIC experi that the idea came up during a coffee ence is providing transition from routine break meeting: "Someone wondered why assembly to making work more interesting a notorious late riser on the administrative and is moving along strongly at Waltham staff should have to be at his desk at with expectation of further benefits. It exactly the same time as the early bird should be well worth following. in the metal shop turned on his lathe. We discussed the idea further, and in 1967 introduced flexible hours." Wolf Michel, manufacturing opera tions manager, opens discussion on other applications of work responsibility by taking exception to Lenin's cynical state ment, "Trust is good, butcontrol is better." Says Wolf, "Here, everyone is personally responsible for the quality of their work. In the metal shop, for instance, each employee must find out which machines are available and how he can best go about fulfilling each work order. Once set up he tests the first part himself. If later work turns out not OK, he must correct it himself. Of course he's paid for that too, so it's all really a moral responsibility." Other departments follow the general principle, including calculator assembly. There, every assembler has their own bench and assembles complete units work you can really get your hands on!

Though each of the four Waltham Division printed-circuit assemblers shown above has an individual work station, each works as a member of a team. Each can do all of the work required to complete a work order, including production testing. They back each other up on work without having to be asked. Under this system of "integrated" work organization, locally called EPIC, productivity has improved substantially. Another improvement has been a reduction in the overall need for supervision. Below, supervisor Paul Sullivan consults with leads Eileen Loring and Jeff Clare. By being able to give his lead people more administrative responsibilities, Paul has been freed enough to take on supervision of other departments as well.

www.HPARCHIVE.com Individual initiative, based on trust, is a very significant factor in the success of HP's operations in the German Federal Republic. The Boeblingen facility pioneered flexible work hours, and wherever possible organizes work to give the greatest degree of self responsibility.

hat in the United Kingdom is called W "job re-design" has been underway at HP's South Queensferry, Scotland plant for more than two years. It involves about 60 people in the instrument assembly area. Prior to re-design, their work was organized along functional lines separate stations for printed-circuit load ing, instrument assembly, and touchup and rework. All products moved through these stations, step by step and from person to person. The change involved linking up these functions then separating the department along product lines. At the present time there are four product lines of about 15 people each. An order coming to a line is handled by one person who takes it all the way from loading to production testing. On completion, the product is "signed" with the employee's number. In other words, each employee puts together whole assemblies, and takes responsibility and credit for same. Accord ing to Dave Brodie, production services manager, the people say it is a much more satisfying work experience than the previous approach. Not least, it has Growth of various product lines, including both transferred lines and its own developed products, has permitted South Queensferry, boosted efficiency an estimated 10 percent, Scotland, plant to reorganize along product lines. Previously, and reduced the reject rate between assembly was on a functional basis. According to observers, both 10 and 15 percent. job satisfaction and productivity have shown good gains. (continued)

www.HPARCHIVE.com we do the whole thing

till under review, but with some very of the division. Accordingly, it is being S promising data, is the pilot program continued while full evaluations are in optional part time launched last year being assessed. in Loveland Instrument Division. The Appealing and simple as the concept project involves four production jobs, seems, it raises a number of important each of which was split between two day considerations. Some of these would time shifts. Each employee works a fixed include work efficiency versus the standard five-hour shift in the morning or after 8-hour shift, apportioning of the employ noon. The program was developed in ment benefit package, employee perform answer to employee requests for part ance evaluations, adjusted pay scales, time work. Another goal has been to costs, does it add or delete jobs, sharing increase the use of facilities - buildings work stations and work orders, and how and equipment - that represent such it affects full time employees. major items in our balance sheet and The pilot program is now being capital budgets. evaluated against these and other con According to Bill Brunelli, who super siderations, but for the most part, optional vised the project, the basic three month part time looks like an idea worth test itself went well, meeting the needs sharing. of the eight participants and the objectives D

Splitting work shifts as a way of providing some part time employ ment for people wishing it and increasing the use of capital facilities has been tested for about the past six months at Loveland. Here, Jackie Findley at left and Ada Gaines dis cuss a work order that Jackie will take over from Ada. Each works five hours per day. Six other assemblers have been involved in the Loveland pilot program.

www.HPARCHIVE.com The great HPSA 1977 Winter Olympics...

o As an example of team spirit and in ternational cooperation, the running of HP's 1977 Greater European Ski Race in February lacked only one thing - decent weather. A mixture of snow, rain and fog plagued the drive to Flaine, a French ski resort normally within easy reach of Euro pean headquarters near Geneva. But it didn't stop the 101 employees and family participants who showed up in teams from Germany, France, Italy and Switzerland, plus a few individuals visiting Geneva in the course of business from Sweden, Spain and the U.S. In spite of the shivering conditions, 94 contestants completed the 40-gate slalom course, described as a real Darwinian test of survival of the fittest. HPSA emerged as the winning team. The fact that it took the slowest competitor almost six minutes to thread the gates in contrast to a win ner's time of 1 minute, 12.53 seconds While the lucky losers of HPSA's second annual all-Europe detracts not one whit from the overall ski race were being awarded donated round-trip tickets to achievement. In fact, that slow time won Turkey, the winners received more traditional prizes. Above are seen, from left, Dominique Golaz (3rd), Albert Rott (1 st), one of two "worst" prizes consisting of a meet organizer Irene Hubmann (Personnel), and Herve Rivoal week's trip (donated by HPSA's travel (2nd). The three winners are all HPSA computer operators! agency) to Turkey, land of non-skiers. 0

www.HPARCHIVE.com new assignment to develop com the division's large-scale integrated HPNews patible policies for the company's circuit manufacturing and research wide line of computational activities. products. "This new facility represents Chance will have worldwide a major investment and is an sales, service, advertising, promo example of our continuing long tion and application services term commitment to the pocket responsibility for HP's computer and personal calculator business," products. said Bob Watson, general manager Chance was appointed division of HP's calculator products group. general manager in 1973, and was responsible for the start-up of the New Medical Line transfers company's Santa Rosa, California, to McMinnville Division. He joined HP in 1966. McMINNVILLE, OR., March 17 Holmes became group marketing A just introduced line of HP manager in 1974. He joined HP systems for cardiovascular and in 1960 as a field engineer. James Hodgson elected respiratory resuscitation will be HP Director transferred from the company's Edmondson heads Santa Waltham (Massachusetts) Division PALO ALTO Rosa, Riggen to manage to be manufactured here. James D. Hodg Colorado Springs "Transfer of the new line of son, former U.S. products to McMinnville reaffirms Secretary of PALO ALTO-Hal Edmondson, Hewlett-Packard's commitment to Labor and U.S. former general manager of Colorado Springs Division, was the area," said Bill Craven, general Ambassador to named general manager of the manager of the McMinnville Japan, was Santa Rosa Division, replacing Division. The expected growth of elected to the the resuscitation operation can be Hewlett-Packard board of directors Doug Chance. accommodated easily at the recently at its meeting on March 18. John Riggen, formerly cathode expanded McMinnville facility. Hodgson's background includes ray-tube manufacturing manager a 27-year career in the industrial at Colorado Springs, was named and labor relations side of the aero general manager of the division, replacing Edmondson. space industry. He was senior vice Edmondson joined HP in 1955 president-corporate relations with Lockheed Aircraft Corporation, and held a series of engineering and Burbank, California, before enter management positions in Palo Alto ing government service. and Colorado Springs before After serving as Undersecretary being appointed Colorado Springs of Labor from 1969 to 1970, marketing manager in 1967. He Hodgson was appointed Secretary became division general manager of Labor and served in the Cabinet in 1971. from 1970 to 1973. He was Riggen joined HP in 1960, ambassador to Japan from July, moved to Colorado Springs as an 1974, until March, 1977. engineer in research and develop "The Cassandra Crossing," a recent Upon leaving government ment in 1964, and was appointed entry in the great disaster category service, Hodgson plans to divide CRT manufacturing manager of movies, had two interesting HP his activities among private enter in 1974. connections. While filming in prise, public service and lecturing. Rome, the producers arranged the New Corvallis IC Facility loan of a truckload of HP medical Chance heads Computer represents calculator and analytical equipment. Then Group Marketing; commitment they asked Gino Leoni, Medical Holmes takes new position CORVALLIS, OR., March 15 service engineer, to operate CUPERTINO-Doug Chance, Operations began last week in the the equipment "on camera," with former general manager of HP's second building to be completed for stars Burt Lancaster and Ingrid Santa Rosa Division, has been HP's Corvallis Division. The Thulin. Unfortunately for his future named group marketing manager division is responsible for the HP in show business, they completely for the Computer Systems Group. line of pocket and personal calcu covered his features. Nevertheless, Ben Holmes, who had been group lators. The new, two-story, 154,000 that's Gino in the background marketing manager, has taken a square-foot building will house at right.

www.HPARCHIVE.com for this reason that we added to the board Dr. Robert Glaser, From the president's desk former Dean of the Stanford Medical School and vice presi dent for medical affairs, and currently chief executive officer of the Kaiser Family Foundation; and Dr. Antonie Knoppers, Back in 1970 in one of my MEASURE letters I discussed a consultant and retired vice chairman of Merck & Co. the functions and responsibilities of a board of directors, Our most recently elected outside director is James and briefly highlighted the background and experience of Hodgson. Jim was with Lockheed Aircraft for a number of the directors serving on the HP board. Since that time, our years before entering government service as Secretary of employment has doubled, sales have tripled, and there has Labor and later as U.S. Ambassador to Japan. Thus, he been almost a 50 percent turnover in board membership. brings to the board a combination of industrial experience, Greater responsibilities, both explicit and implicit, have government experience, and experience in the international been placed on the board by the government. Additionally, area. a new director was just recently elected to the board. It In addition to myself, the other directors on the HP seemed, therefore, that it might be appropriate to again re board not previously mentioned include Luis Alvarez, pro cap the role of the board, and talk a little about its present fessor of physics, University of California; Thomas Pike, composition. honorary vice chairman, Fluor Corporation; Ernest Arbuckle, The board is the body elected by the shareowners as chairman, Wells Fargo & Co.; Ed van Bronkhorst, vice their representatives with the responsibility to see that the president and treasurer for HP; Robert Minge Brown, at company is run properly and profitably. Obviously they torney; Francis Moseley, technical consultant; Ralph Lee, cannot achieve this function directly, so typically in a large executive vice president for HP; and George Bennett, presi company the board selects a top management team, headed dent and chief executive officer, State Street Investment by a chief executive officer, and delegates the day-to-day Corporation. management of the company to this team. The board still I mentioned earlier that additional responsibilities have provides policy guidance, and traditionally approves certain been placed on the shoulders of the board. One such respon types of action such as dividends, major capital expenditures, sibility springs from the Employee Retirement Income appointments and compensation of key officers of the com Security Act (ERISA). The basis for this legislation was de pany, and the like. rived from the abuse with respect to many employee retire Who are the current HP board members? How are ment funds both in industry and in labor unions. The Act they selected? Why does the composition of the board requires more exact definition of many benefits (not just change? pension plans) and holds the directors legally responsible As to the last question, there are several reasons. First, for proper funds management. This law has real teeth and we have a mandatory retirement age of 72 for outside di most boards of directors are greatly concerned about many rectors (that is, directors who are not members of HP man of its provisions. In fact, many boards with which I am agement). This provision caught Dr. Russel Lee and Harold familiar have set up a special committee to insure exact Buttner in 1970, as it did Dr. Frederick Terman and John compliance with ERISA. Fulenwider in 1973. Because of their very long association A second area of added responsibility is a direct result with the company, Directors Terman and Buttner were of the wave of illegal payments disclosures recently reported elected emeritus directors following their retirements. We in the press. Although the actual number of such incidents have a mandatory retirement age of 65 for inside directors, has been relatively small or minor in effect, some have been which was the reason for Frank Cavier's retirement from so flagrant that they have been an embarrassment to both the board several months ago. industry and government alike. Again, as in the case of Resignations are also a factor. This was the case with ERISA, most boards have a special committee to work with Bill Eberle when he received a Presidential appointment for management, and often its outside auditors, on this problem. U.S. Trade Negotiations; with Ed Littlefield because of a These committees carefully review the multitude of trans possible conflict of interest with another directorship; and actions that their companies are engaged in to uncover and with Dr. Philip Lee who, as chancellor of the University of disclose any irregularities that may have occurred. California Medical Center in San Francisco, was faced with Now, a final word about your own board. Our inside an irreconcilable time conflict between the meetings of the directors are HP people with long experience in the com HP board and the University's Board of Regents. pany who hold key positions of management. Our outside Death claimed three of our directors in recent years directors have been carefully chosen, and are of great value Noel Eldred, Noel Porter, and H. I. Romnes. to the company. Not only have they had wide experience in One important criterion in evaluating and selecting new the business or scientific community - not only do most of members for the board is area of expertise. It was obvious them bring special skills to the board - they also have demon that Dave should resume his membership on the board fol strated a very great interest in HP, and have made a per lowing his return from Washington early in 1971. Bill Doo sonal investment in time and study of the company, its goals, little, vice president, International, was added to the board and its key people. We are fortunate indeed to have the help because of the increasing importance of our international and counsel of these fine people. business, and the election of Barney Oliver, vice president, For your interest, a future issue of MEASURE will feature R&D, reflected our strong commitment to technological photos and brief biographical sketches of the HP directors. innovation. John Young and Bob Boniface were added to the board when they became members of the executive level of HP management. The medical and analytical markets are important to HP, and for that reason it is highly desirable to have out side directors who are knowledgeable in these areas. It was

www.HPARCHIVE.com An HP component that's taken to heart

HP components are at the heart of The Schottky, a metal-on-silicon many electronic products of other diode named for the man who discovered companies, including at least one that the principle involved, is used in two helps some human hearts function better different ways in the pacemaker. One is -the pacemaker. The HP Schottky diode in the power pack, where the HP diode from Microwave Semiconductor Division prevents one weak battery from draining is used in almost every brand of heart the others. In its other application, in the pacemaker on the market. heartbeat timing generator, the Schottky A pacemaker keeps the heart beating sets the reference voltage of the timing at a steady rhythm by transmitting pulse. Its low, stable forward voltage pulses to a device implanted near the produces a very accurate reference. heart. It's a consumer product, so it can't In both applications the diodes are be too costly, but it must be highly used in circuits that are outside the body, reliable at the same time, since a mal but their operation is critical because function could be a matter of life or those circuits control the implanted unit. death. This combination of requirements HP Schottky diodes were chosen for the makes MSD's high-volume line of job because of their proven reliability Schottky diodes ideal for this application. and low price.

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