QUAD: pls. extend pic to bleed and clone to gutter APRs IN QUAD PLS PLACE Text Revise Art Director Color Revise SILICON SHOWDOWN Carly Fiorina after the shareholders’ meeting in Cupertino, California, at which she closed the voting on the Hewlett-Packard/ Compaq merger, March 19, 2002. Opposite, Walter Hewlett arriving for the same meeting. The Battle for H 0602VF WE-158 CYAN MAGENTA YELLOW BLACK NOTES: APRs IN QUAD PLS PLACE Text Revise Art Director Color Revise Hewlett-Packard’s chairman and C.E.O., Carly Fiorina, was sure a merger with Compaq would be her company’s salvation. Walter Hewlett, son of the famously folksy co-founder, was sure the merger would destroy it. Their bitter proxy fight may have wounded the $45.2 billion computer giant beyond measure. Reporting on the clash between the world’s top female chief executive— nicknamed “Rock Star” for her aloof, Armani-clad style—and the rumpled, low-key Hewlett, with his battalion of ultra-egalitarian H-P employees, VICKY WARD reveals the stakes: a woman’s reputation, a family’s legacy, and a company’s soul LEFT, BY NORBERT SCHWERIN; RIGHT, BY JUSTIN SULLIVAN or Hewlett-Packard 0602VF CYAN MAGENTA YELLOW BLACK WE-159 NOTES: APRs IN QUAD PLS PLACE Text Revise Art Director Color Revise that the merger would give H-P the scale it took the microphone. He spoke softly and needed to compete with IBM and Dell in clearly: “I love this company,” he recalls a market demanding increasingly complex telling Fiorina. “Twenty-two years ago I systems and services. It was a dicey bet. was unemployed, my wife was pregnant, No previous technology merger had ever and I was fortunate to get a job with H-P worked. Conventional wisdom held that you as a production assembly worker. I worked couldn’t integrate two companies quickly my way through college, obtained a degree enough to avoid crippling losses in the pro- in electrical engineering, and subsequently duction line. There was also the strong ar- got a job in the lab, and since then have gument that H-P’s valuable $19.4-billion- obtained eight patents, and I have two a-year imaging and printing (computer pending. Those patents are broadly used printers and components) business, which throughout the industry, even by our com- brought in 43 percent of its revenues, would petitors like Cisco, on whose board you sit. suffer debilitating dilution. Deutsche Bank I totally agree with your statement that the t around 8:45 A.M. had already voted its 25 million shares trust and respect between employees and on Tuesday, March 19, Carly Fiorina, the against the merger. management is crucial to the success of 47-year-old chairman and C.E.O. of But Fiorina was determined to get the the merger, and I totally agree that layoffs AHewlett-Packard, the $45.2 billion comput- bank to change its mind. The week be- should be a last resort. However, I disagree er company, took the stage at the Flint fore, as a sweetener, H-P had opened a with the way layoffs were done last year, Center in Cupertino, California, before credit line there, which could facilitate the and I work in a division where we were 2,000 company shareholders. She wore her merger if it went through. Relations were growing at twice the market rate, and we uniform—a dark pantsuit, heels, a pearl- friendly. Right now, the urbane Sonsini, needed more people to succeed. [Over pendant necklace, pearl earrings, clear nail corporate lawyer also for Apple’s Steve the years] I had friends who left for start- polish—and had on bright-red lipstick, and Jobs, Sun Microsystems’ Scott McNealy, ups, who are now multimillionaires. I nev- her hair was shorter and blonder than usu- and many other big Silicon Valley names, er took advantage of those offers, because al. From the back of the auditorium, she was backstage, headset on, ready to radio I love working at H-P, but I don’t trust the looked cool and in control. But close-up Ann Baskins, H-P general counsel and management that is pushing the merger, one could see pouches protruding under secretary, who was seated onstage near and if this merger is going through, I don’t her eyes and an uncharacteristic pallor that Fiorina, if Deutsche Bank switched. see how I can continue to work for this blush could not mask—signaling that it had In the audience, all around Fiorina, company.” been a long night. A handful of people, was evidence of why it might not. About The crowd went berserk. Fiorina looked hidden backstage, knew the truth: that halfway back in the auditorium was Walter defeated. “I am sorry you feel that way,” Fiorina was a hairsbreadth away from the Hewlett, 57, eldest son of Hewlett-Packard’s she said, and she seemed to mean it. biggest fall of her career, a fall that would late co-founder Bill Hewlett and the leader But it wasn’t enough to buy off this have repercussions for women throughout of the opposition to the merger. A small mob. “She’s a witch,” said one man, who corporate America. As the first-ever female man, with a bit of a stoop and an uneven, did not want to give his last name. A wom- head of a Dow 30 company, she has been slightly spiky haircut, he looked more like a an employee wearing jeans, sneakers, and a celebrated by the business press the way character out of Lord of the Rings than a floral shirt whispered, “I actually met her Madonna is by the tabloids. Was she now corporate hero. In an ill-fitting gray suit, he when she first arrived. I introduced myself going to flame out from an even greater peered through thick glasses and read a to her in the rest room, and she started fix- height than had two of her former high- prepared speech haltingly off white cards, ing her hair, even though nothing was out profile women peers—namely ex–Warnaco as if he were a little unsure of some of the of place. I mean”—and here the woman chief Linda Wachner and Mattel’s Jill sentence constructions. (In fact, as a close rolled her eyes—“that tells you everything, Barad—who were ousted after they failed friend of his later confided, he is both far- doesn’t it? Someone who fixes their hair to build on promising starts? sighted and dyslexic.) But he received a when nothing is wrong with it!” Onstage that crisp, sunlit morning Fio- hysterical ovation from the crowd, which rina did not know the answer. As she in- stood, clapped, whistled, stamped, and ater, sources confided that the out- troduced the Hewlett-Packard executive waved green fluorescent glow sticks. Many side directors on H-P’s board—rep- management team, sitting beneath her in were also wearing green T-shirts to match resented at this meeting by Sam the front row, she managed a little black the color of the opposition’s green ballots. Ginn, the former chairman of the humor, asking the audience to please “re- Then there were the increasingly hostile mobile communications company strain” their applause. She knew there questions from the audience, composed Vodafone AirTouch—had been would be none. mostly of current and ex-employees—who’d L“shocked” at the level of employee dis- The last hope for her career as H-P’s watched the value of their stock sink from sension over the merger; in the H-P 401(k) C.E.O. lay with one of the company’s in- $30 to under $20 over the past year—many plan, the only place in which employees vestors, Deutsche Bank. All the night be- of whom either had been fired from H-P or were guaranteed confidentiality, they voted fore, Fiorina and H-P’s proxy solicitors, would be if the merger went through. Al- two to one against the deal. One had to under the watchful eye of Silicon Valley’s though Fiorina responded with her normal wonder how, if it got voted in, this most au- “celebrity lawyer” Larry Sonsini, had been fluency, many felt their questions went unan- dacious, complicated merger could really on the phone, trying to persuade the insti- swered, or else they did not believe her. work in the face of such passionate antipa- tution to change its mind on how to vote its Perhaps the most poignant moment of thy from employees. shares in the proxy fight over H-P’s pro- the entire meeting came when Dan Dove, Amid the sea of geek clothes—jeans, posed merger with Compaq, the struggling a stocky, dark-haired engineer from H-P’s sneakers, and checked shirts—Fiorina’s army computer company. Fiorina was arguing Procurve Network Management division, of corporate-communications women (some TOP, BY JUSTIN SULLIVAN; BOTTOM, BY JEFF CHRISTENSEN 182 VANITY FAIR J U N E 2 0 0 2 CYAN MAGENTA YELLOW BLACK NOTES: APRs IN 4/19 Text Revise Art Director Color Revise of whom she’d imported from the East what innovations she’d bring to an engineer- Fiorina started well at H-P, living up to Coast) stood out like an alien tribe from ing culture that had grown cumbersomely all the heady expectations; after a successful Star Trek; wearing headsets, they ran around huge as it entered its third generation of first year, in which she’d exceeded her own in shiny black pantsuits and designer shoes.