HP faces strike action in UK over pay and pensions

V3.co.uk,

The UK's largest trade union Unite is balloting members working at HP on strike action after the company changed the status of some of its engineers and support specialists. The union announced the action over the company's planned changes in staffing rules, which would see 150 employees of HP IT services shifted to jobs at HP CDS, which would see them losing final salary pension schemes and performance benefits worth around £2,000.

"Our members face cuts to their pay and pensions and have no choice other than to begin an industrial action ballot. This is the latest in a series of attacks by the company on our members' pay and conditions, while senior executives and shareholders do very well indeed,' said Peter Skyte, a Unite national officer. "Unite remains willing to seek a resolution to this dispute with HP but not on the basis that one employee's pay cut results in a HP executive's pay and bonus increase.'

In its last financial report HP reported profits of £973 million for the quarter, and said that European demand was lower than any other major market. The company has already confirmed it is cutting some of its UK staff but hasn't confirmed numbers, although Unite expects 850 jobs to go. It has also cut back on staff at EDS and has repeatedly cut salaries for those staff still employedUnite has become increasingly active in the IT sphere, taking on IBM and Fujitsu over pensions and job losses.

If the ballot is successful it will be the first time HP has faced a British strike.

EDS staff voting on strike action in UK

Computerworld : staff at EDS, who are now employed by HP, are voting in a strike ballot as they express their “anger” over upcoming job losses.

Most of the 1,000 staff, who are members of the PCS union, work on a series of IT contracts at the Department for Work and Pensions that are worth £3 billion and run until 2015. They work in locations around the UK, including Newcastle, Washington, Preston and the Fylde Coast, on areas including desktop and datacentre management, and application maintenance and support.

There had been “growing anger” among the staff since HP bought EDS in 2008, the union said. Their complaint centres on the 1,000 job losses planned for the first half of next year, as well as a pay freeze, a growing workload, and voluntary salary cuts. Some 3,400 staff have already been made redundant since the takeover.

The PCS ballot offers staff the chance to vote on a series of strikes of one or two days, as well as action that falls short of a strike. Staff have until 30 November to vote. Mark Serwotka, PCS general secretary, said: "There has been growing anger amongst staff who are facing yet more uncertainty about their future.” While employees had been “contributing significantly to HP’s revenue” and taking on more work, “their reward is more job cuts, imposed pay freezes and pleas from the company to take a voluntary pay cut”, he said.

Serwotka urged HP workers to tell their managers that “enough is enough". In a statement, HP said it “respects the rights of its employees” to be part of a union and would continue dialogue with the aim of avoiding a strike.

HP is facing a stike ballot on another front, regarding 150 of its service engineers, who mainly work from home and in the field. Those workers are complaining of a reduction of pay and benefits, and the result of their vote is expected in the next few days.

Elsewhere, rival Fujitsu narrowly avoided a three day stike last week, after the Unite union said there had been some progress in discussions on pay and job cuts. But the situation is not resolved and the union did not rule out further strike action.

Is there a Board ?

TheStreet.com

Mark Hurd was brought in to take the helm at Hewlett-Packard in 2005. He's well regarded by Wall Street for turning the company from a bureaucratic has-been to a market leader again. In the first 2 1/2 years of Hurd's tenure as leader, HP's stock increased 137%. For the last two years, however, HP's stock performance has been mediocre, dropping 5%. Although that was better than the Nasdaq, it tracked that index very closely over that period

While Hurd deserves credit for turning this company around in the early part of his tenure by slashing costs and increasing focus, there are some very troubling aspects about how he, his management team and his board approach executive compensation and governance that suggest investors should steer clear of this Silicon Valley icon until it gets its act together.

Although HP's performance has hit the wall in the past two years, Hurd's pay -- and the pay of his management team members -- has dramatically increased. For 2008, Hurd's total compensation reached $43 million, which made him the fourth highest paid CEO in America for 2008. Hurd's total compensation increased 73% from his $25 million in 2007, even though HP's stock price declined 29% in 2008.

On his senior management team, the sharp compensation increases in 2008 were also noteworthy. CIO Randy Mott's total compensation went up 400% last year to $28 million. Imaging EVP VJ Joshi's total compensation jumped 83% to $22 million. Personal Systems EVP Todd Bradley's total compensation jumped 263% to $21 million. Technology Solutions' EVP Ann Livermore enjoyed a 31% bump in total compensation to $21 million. And CFO Catherine Lesjak got a 49% increase in total compensation to a more modest $6 million.

What also raises eyebrows about these sharp executive raises, aside from it happening in the face of a sharp stock price drop for the year (and the general market uncertainty which remained at the end of the year), is that 2008 was also a year in which these same leaders imposed mandatory 10% pay cuts for other executives and 5% cuts for the rest of HP's workforce. It hardly seems like this select group is shouldering the pain like the rest of the employees.

At Dell, the magnitude and the general direction of total compensation were far different than HP for 2008. Michael Dell's total comp dropped 9% in 2008 from the previous year to $2 million. Other senior executives on Dell's management team decreased or modestly increased to an average total compensation for the year of $9.5 million -- or less than half of what their HP counterparts took home for the year.

But what should be most rankling to HP shareholders -- and a very good reason to avoid the stock in the near term, as it speaks to the values by which this board and management team operate -- are the perks these executives are asking for and receiving from the board.For example, last year HP shareholders paid $7,472 for travel expenses related to Mark Hurd's family accompanying him to business meetings. Expenses for Hurd's security service roughly doubled to $256,000. Shareholders paid $500,000 combined in 2007 and 2008 for legal fees associated with bringing over CIO Randy Mott from arch-rival Dell. All senior executives availed themselves of about $18,000 worth of financial advice in 2008 (about four times the amount Dell senior executives received that same year).

Perhaps the biggest bonus for being an HP senior executive is getting access to the fleet of corporate jets for personal use. Shareholders forked over $136,000 for Mark Hurd's personal use of the aircraft in 2008. Todd Bradley's personal use of the aircraft cost $128,000 in 2008, which was actually down from $327,000 worth of personal travel in 2007.
HP explains in its proxy filing that for "purposes of reporting the value of such personal usage in this table, HP uses data provided by an outside firm to calculate the hourly cost of operating each type of aircraft. These costs include the cost of fuel, maintenance, landing and parking fees, crew and catering and supplies."

I think it's completely unacceptable for shareholders to pay for this personal use perk. However, this explanation left me with more questions about these numbers. Who is this outside firm that provided this estimated hourly cost? What in fact was the hourly cost? How do shareholders know that the hourly cost was a fair market rate? Finally, what were these personal trips?I'm not even sure how it's possible for Todd Bradley to have racked up $327,000 worth of personal travel in 2007. Did he have time to show up for work that year? Call me a conspiracy theorist but isn't it possible that this outside firm vastly under-stated the actual (fair market) hourly cost of using these aircraft for personal use? How will shareholders actually know unless the company releases the flight logs and numbers ?

Dell and his senior executives charged no personal use of their aircraft to its shareholders.A later footnote in the proxy filing for Hurd's personal travel says that the first 25 hours of personal travel are included and are "grossed up." Hurd owes taxes on the value of that perk, but HP's board has decided that HP shareholders should pay Hurd's taxes instead of Hurd.The same footnote later says that if Hurd's spouse is "requested by HP" to travel with Hurd, then the company "grosses up" that amount, too. The internal process that goes on in determining the company request is not described. It could be as simple as Mark Hurd leaning over and saying to his assistant: "I'd like to go play golf in Hawaii this weekend with the CEO of one of our clients on business. Can you write me a quick email saying that, on behalf of HP, you're requesting that my wife fly with me?"

And don't forget the minor scandal the erupted last January, when blogger Michelle Leder of Footnoted noticed that HP had "grossed up" Hurd $79,814 for taxes he paid on meals involving his family. (Ann Livermore and VJ Joshi also got "grossed up" $10,000 apiece for meals with their families.)

Michelle estimated that, to receive a "gross-up" of this amount, Hurd and his family would have had to run up food bills during the year of more than $243,000. HP protested, saying it had made an error in its calculations and even refiled its proxy with the SEC. Magically, Hurd's "gross-ups" for his family meals shrunk to $3,285. HP's error and refiling could have simply been a decision on its part, based on the angry reaction of employees and shareholders, for Hurd and all executives to simply cover these meals and their taxes themselves. Let's face it: It wouldn't have been a hardship for any of them based on their compensation last year.I don't mind pay for performance. I do mind pay for non-performance and I mind perks for breakfast, lunch, and dinner. And in a year of across the board pay cuts? Where is their shame?The board is equally or more to blame of course. After all, they approved all this. I was particularly surprised to note that Ken Thompson has served on the HP board for three years now.

Thompson is one of the most disgraced CEOs coming out of the financial crisis.He ended up destroying the fifth largest bank in America, Wachovia, by pushing it heavily into the area of subprime mortgages. When you destroy a company with $8 billion in annual profits, you shouldn't have the right to continue serving as a director and get $300,000 a year for doing so.
It was announced last week that Web pioneer Marc Andreesen would join HP's board. I hope he can help reform the company's governance, but I don't think it's likely. In 2006, Andreesen sold his company Opsware to HP for $1.6 billion -- making him indirectly beholden to Hurd and the rest of the board for his payday. That means Andreesen will likely be another voice around the table tacitly approving whatever Hurd wants to do and pay himself.

Disclosure: At the time of publication, Jackson did not hold any positions in the companies mentioned.

HP's Salary Cuts Forcing Out EDS Employees in the US

"...Employees were prepared for salary cuts between 2 1/2 percent to 5 percent. Last Feburary, former EDS employees had their salaries sliced by hp by 2 1/2 percent. In April, more cuts with salaries slashed another 10 percent, that 10 percent figure was restored a month later but the email received by the employee this time indicates nothing surgical in the wage cut.

"My pay is being reduced a total of 29 percent, 20 percent effected Sept. 1, the additional 9 percent effective Sept. 1, 2010," the man said. That's nearly a 32 percent salary cut for one employee in two years time -- more than one-third of his base salary. The cuts push him back to the salary he earned working the same job in the same building more than 10 years ago. Other former EDS employees said that under Hewlett Packard, they've experienced salary cuts of between 10 percent and 47 percent.

A spokesperson for Hewlett Packard said not all former EDS employees face wage cuts and that the salary realignment," enables hp to effectively drive its pay for performance strategy with a consistent job-based foundation for rewards, development and organization planning," said an hp spokesperson...."

http://www.nbcphiladelphia.com/news/tech/HPs-Huge-Salary-Cuts-Forcing-Out-Old-EDS-Employees-52485672.html

See also : EDS workers face more pay cuts

HP/EDS management cannot muzzle workers’ representatives

UNI-Europa and EMF members in HP/EDS are extremely concerned about the management’s attempt to take advantage of the current crisis to undertake offshoring to low-cost countries.

The new EWC Directive strengthens communication between EWC members and the workers they represent. HP/EDS management claims that dialogue with the EWC is indeed a priority and that it respects the applicable laws with regard to information and consultation of workers. In reality however, the workers’ representatives in the EWC cannot exercise their representative functions since they are denied the right to report back to the workers they represent. It is clear that HP/EDS management is simply paying lip service to the Directive and this is totally unacceptable to the UNI-Europa and EMF trade union representatives who gathered in Brussels recently.

HP/EDS management is not willing to develop a constructive social dialogue at European or national levels. There has been much evidence from different countries in recent weeks to show that it is only prepared to enter discussions when trade unions start taking legal steps or mobilising workers. This attitude is really regrettable and leads to frustration and anger among the European workforce.

They stress that the company’s growth is no longer geared to R&D or an innovative industrial strategy, which again puts the long-term viability of HP/EDS at stake.

UNI-Europa and EMF will again approach central management, urging it to allow workers’ representatives to effectively fulfil their duties towards the workers they represent and ensure effective information and consultation processes.

The two organisations will ask the EU Commission to investigate this case further. European trade union coordination will evidently be maintained and further protest actions will be envisaged.

_________
Press 28/2009
The EMF is the representative body defending the interests of workers in the European metal industry. UNI-Europa is the European trade union organisation for skills and services.
For further information please contact:
Isabelle Barthès, EMF Policy Advisor on Company Policy +32(0)2 227 10 12
Gerd Rohde, UNI-Europa + 41 792 02 19 28

HP cuts salaries

http://www.theinquirer.net/inquirer/news/084/1051084/hewlett-packard-cuts-salaries

"The math is pretty straight forward. From a productivity standpoint, you’re supposed to reduce headcount on par with declining revenue. If you believe the environment isn’t going to improve, you should take a bigger cut to get in front of the problems. You can do the calculation, as easy as I can. We have about 100,000 people in our product businesses, with revenue down roughly 20%, and an environment that may not get any better in 2009.I’ll be asked by investors, “Where’s the job action, where are you taking out this roughly, 20,000 positions?” Well, I don’t want to do that. When I look at HP, I don’t see a structural problem of that magnitude. There are pockets where restructuring needs to happen, and areas where actions will be taken as part of our ongoing workforce optimization process. But at a company-wide level, I don’t believe a major workforce reduction is the best thing for HP at this time."
...
Mark Hurd

Huge strike of EDS workers in Germany

At the beginning of December 2008, management was asked to enter into negotiations in respect of a collective agreement for EDS in Germany covering the following three main issues:
1. A collective labour agreement, including guarantees regarding the future of existing sites
2. A collective agreement to secure existing working conditions
3. A pay increase for 2009

Four warning strikes have been organised by the unions at all German EDS OS location since February 2009 following management’s refusal to negotiate. A meeting between management and trade union representatives was actually held on 28 April but no headway was made regarding the negotiations.

The result of last week’s strike ballot conducted by IG Metall and ver.di, the two German trade unions concerned, was overwhelmingly in favour of a full-scale strike : 96,55% EDS OS employees participated in the ballot, 91,92% voted in favour ! The strike starts on 4 June. The EMF supports the current struggle by the EDS OS workers and calls on affiliates, in order to increase the pressure on the company management and avoid any strike-breaking measures:
· to send messages of support to the unions and works councils
· to ensure that EDS and HP employees working in Europe do not accept any activities that may be transferred from Germany.

We wish the EDS-OS workers every success in their legitimate struggle.

In solidarity,

Yours fraternally,

Peter SCHERRER
General Secretary

EMF

Switzerland: a letter of union Kommunikation to HP requesting social dialogue

Bern, 27. Mai 2009

Aufforderung zur Aufnahme des sozialen Dialogs mit der ANV und der Gewerkschaft Kommunikation

Sehr geehrter Herr Kryhlmand

Wir haben zur Kenntnis genommen, dass HP sich bereit erklärt hat die zukünftigen Arbeitsbedingungen gegenüber den EDS Mitarbeitenden zu verbessern. Gleichwohl stellen wir mit Bedauern fest, dass sich HP weigert, auf die Vorschläge der ANV für die Erarbeitung eines Gesamtarbeitsvertrages einzutreten und zudem das Vertretungsrecht der Gewerkschaft Kommunikation in Abrede stellt. Dies, obwohl an der gemeinsamen Aussprache vom 16. März 2009 das Vertretungs­recht der Gewerkschaft Kommunikation von Ihrer Seite nicht bestritten war.

Wie bereits im Rahmen des Konsultationsverfahren von Seiten der ANV und der Gewerkschaft Kommunikation festgehalten worden ist, müssen wir erneut feststellen, dass HP offenbar weder an einem konstruktiven Dialog zur Verbesserung der Arbeitsbedingungen noch an einer nachhaltigen Sicherung der Arbeitsplätze in der Schweiz interessiert ist. Wie aus den Verlautbarungen Ihres Unternehmens zu entnehmen ist, genügen HP/EDS die 10-prozentigen Kosteneinsparungen im Rahmen der angekündigten Massenentlassungen nicht. Durch die von HP/EDS vorgeschlagenen Massnahmen zur Festlegung der neuen Arbeitsbedingungen – nach der erfolgten Übernahme von EDS durch HP – sollen offensichtlich weitere Sparmassnahmen auf Kosten der Beschäftigten erfolgen, indem die Arbeitsbedingungen verschlechtert werden.

Die von der ANV eingereichten Eckwerte für die Verhandlungen bezüglich der zukünftigen Arbeitsbedingungen bei HP sind von HP/EDS allesamt zurückgewiesen worden, ohne eine inhaltliche Diskussion zu führen. Es geht nicht an, dass die Arbeitsbedingungen in der Schweiz weniger sozialen Schutz bieten als in den anderen HP-Niederlassungen in Europa. Es liegt auf der Hand, dass bei weiteren Restrukturierungen HP dort Personal abbauen wird, wo die kleinsten sozialen Kosten für die Unternehmung entstehen. Für ein Unternehmen, das am öffentlichen Beschaffungswesen der Schweiz partizipiert, ist dies eine nicht tolerierbare Haltung.

In Absprache mit der ANV ersuchen wir Sie, uns einen Besprechungstermin zu unterbreiten für die Aufnahme eines sozialen Dialoges. Das Ziel des sozialen Dialoges ist es, einen Prozess einzuleiten der zur Verbesserung der zukünftigen Arbeitsbedingungen im Rahmen eines Gesamtarbeitvertrages beiträgt.

Sollte sich HP weigern, auf den sozialen Dialog mit der ANV und der Gewerkschaft Kommunikation einzutreten – und zwar ohne Vorbedingungen –, werden wir entsprechende gewerkschaftspolitische Massnahmen ins Auge fassen. Wir sind überzeugt, dass eine sozialverträgliche und nachhaltige Lösung im gegenseitigen Interesse ist.

Mit freundlichen Grüssen


Giorgio Pardini
Vizepräsident Gewerkschaft Kommunikation

- Kopie geht an:
- die ANV EDS
- KV Schweiz,Zürich, Hr. Benedikt Gschwind
- Uniglobal Union, Nyon, Hr. Gerd Rhode

HP confirms UK job cut rumours

VNUNet, 5/28,

HP has confirmed rumours that it plans to axe thousands of jobs, after protests by UK trade union Unite. The company has submitted a proposal to its European Works Council to cut over 5,700 staff in EMEA. HP has around 80,000 employees in the region.

HP is also set to offshore its enterprise, storage and server production plants in Scotland and Germany to a partner in the Czech Republic by 2010. Although HP will not comment on exactly how many UK workers will be affected, Unite puts the figure at around 850. Staff were informed of the news today, and a report from Unite was released shortly afterwards informing the public of the cuts. Unite has condemned HP's decision to move manufacturing jobs offshore, pointing to HP's profit of £1.1bn in the most recent quarter. Unite has also called on the UK government and Scottish Parliament to increase investment in the UK's manufacturing sector. "Westminster offers no meaningful investment, and Holyrood does not even recognise manufacturing as a key plank of its economic plan," said Unite Scottish regional secretary John Quigley. "When over £900bn of public funds can be poured into bailing out the banks, it is utterly unacceptable that help cannot be directed into a sector that is fundamental to nurturing our economic revival."

Downing Street responded by listing ways in which it is helping manufacturers through the global downturn, such as the Enterprise Finance Guarantee that supports £1.3bn of lending to small businesses, the HMRC Business Payment Support Service that allows companies to defer paying tax, and the Manufacturing Advisory Service that offers advice on cost savings. "We know how tough it is for manufacturers. Our manufacturing is bearing the brunt of the global downturn because it is deeply integrated into global supply chains, and supplies global markets," said a spokesman for the Department for Business Enterprise and Regulatory Reform.

Meanwhile, HP's offshore move was questioned today by the Scottish Parliament. The plant, based in Erkskine, employs 1,300 people, more than half of whom are likely to lose their jobs."This is a company which has made a profit of some £5.2bn in 2008 due in part to the hard work of the men and women in my constituency in Erskine," said Labour MSP Trish Godman, according to an Associated Press report.HP recently announced plans to cut its global workforce of over 320,000 by two per cent, in addition to previously imposing a five per cent pay cut across all operations.

Does H.P. Need a Dose of Anarchy?

A must read : New-York Times article on HP and Mark hurd

Another 6,400 workers to lose jobs at HP

SAN FRANCISCO (AP) -- Hewlett-Packard Co. is cutting 6,400 more workers -- or 2 percent of the company's total work force.

It will come over the next year as part of HP's huge acquisition of Electronic Data Systems.
Palo Alto, Calif.-based HP was already dumping 24,600 workers as part of that acquisition before announcing the extra cuts Tuesday.

The announcement came in a conference call with analysts to discuss HP's fiscal second-quarter results.

HP's profit dropped 17 percent to $1.72 billion, while sales fell 3 percent to $27.4 billion, in the latest period.

Solidarity @ HP/EDS

On this new site, you will find a UNI/EMF Blog for HP and EDS employees

UNI is the Global Union for skills and services.We represent 900 trade unions and 20 million workers worldwide

The EMF is the representative body defending the interests of workers in the European metal industry. The EMF has a mandate for the external representation and coordination of the metalworkers' unions and a mandate to engage in bargaining at European level.

Recent topics :

The hard fight for a company agreement with EDS in Germany
Prime Minister write to Volker Smid

HP, IBM, Sun Execs Blast Obama's Protectionist Policy

Information Week :

While touring India this week, execs from Hewlett-Packard, IBM, and Sun criticized the Obama administration's anti-outsourcing policies as unrealistic, claiming they fly in the face of the global economy and will not produce positive results.

Noting that HP has far-flung labs in India, Costa Rica, and Europe, HP senior VP Marius Haas said, "It’s a competitive economy and you go where the talent is," according to the Economic Times of India. Haas, who leads HP's ProCurve business, also said, "The local sourcing push by the U.S. administration is unlikely to be effective in a globalised world."

IBM's Edward Orange, emphasizing that IBM manufactures products and delivers services in 170 countries, echoed Haas's point: "IBM goes wherever the talent and the market is." Orange is the Asia-Pacific director for IBM's Lotus unit, the article said.

Sun's Joe Hartley was even more blunt: "The policy may shrink global trade in the long run. Not every job can be outsourced. But a job has to be done at the right place and at the right time," according to the Economic Times, which also offered these statistics:

Indian subsidiaries of U.S. companies such as IBM, Sun, Microsoft, Oracle, and HP together employ over 150,000 people. IBM, which has more than 70,000 employees in India, sees no merit in U.S. government’s protectionist policies.

HP hits UK workers with canteen, car, pension cuts

The Register :

Hewlett-Packard and EDS employees in the UK who are currently bracing themselves for pay cuts can now expect to see food subsidies axed, a pension scheme shake-up and changes to their car allowances.

HP told workers yesterday in a memo seen by The Register that prices in the company’s canteens would be jacked up, fewer meal choices would be on offer and a review of opening hours at some sites was also underway. It said the changes to its restaurant facilities would come into effect on 30 March. Meanwhile, HP is also consulting with employee reps about possible changes to the company’s various retirement plans for both HP and EDS staff. It has proposed that its HP Plan (HP and Digital Sections) and EDS Retirement Plan final salary pension arrangements could see changes that mean either an “increased cost to employees or a reduction in future benefit accrual”.

In addition the firm is considering a reduction in its contribution to the HP pension scheme.
HP revealed its latest efforts to keep a lid on costs as it continues to undergo a painful restructuring strategy involving the loss of thousands of jobs worldwide. In the memo penned by HP UK and Ireland managing director Steve Gill and EDS regional vice president Sean Finnan, the company also reiterated its pay cut plans that were first announced last month. HP said it’s seeking consent from senior managers and all EDS “pay-banded” staff to agree to salary reductions of between 2.5 and 15 per cent by 20 April. Those 700 or so UK-based employees who accept the pay cut will see changes brought in on 1 May.

The company plans to then move to a second round of salary reductions in June in which it will ask all employees in the UK to consent to a pay cut that will be effective from 1 September this year. Late last week HP confirmed its EDS employees in the US and Puerto Rico would have their base salaries cut an additional ten per cent for April 2009 only.

It admitted some workers would temporarily suffer a second drop in pay to help HP execs steer the services outfit through tough economic conditions. UK's largest union Unite slammed the move describing it as "trigger happy management actions more akin to the Wild West in the 19th century".

HP chief faces tough questions at annual meeting

HP chief executive Mark Hurd underwent a grilling from investors at the company's annual general meeting this week.

Hurd faced questions on increased competition in the server space, after Cisco's announcement that it is entering the market in partnership with VMware, and rumours that IBM may buy Sun Microsystems. The HP chief claimed that he was unconcerned by the Cisco move, and refused to comment on the speculation about IBM and Sun."I do not remember a day where the market wasn't competitive. I think you'll continue to see competition in the market," Hurd told the meeting. "I couldn't be more confident in the future of HP."

The agenda for the meeting contained just two official items: the re-election of board members; and the choice of a new accounting firm. Hurd then faced questions from shareholders, one of which concerned his own pay, and in particular the $42m (£29m) bonus he has received. Hurd said that figure was tied to HP's performance over the past three years, and that he did not expect to make as much in the coming years.

Another question concerned how Apple, a company with a research and development budget one third the size of HP's, could have a better market capitalisation. Hurd maintained that Apple was very competitive, and said that he is researching ways to bring more technology to market from HP Labs over the coming year.

H-P shareholders give board members another term MarketWatch, 3/18

SAN FRANCISCO (MarketWatch) -- Hewlett-Packard Co. shareholders on Wednesday voted at the company's annual meeting to give the ten members of the company's board of directors each another one-year term. The board members are H-P Chief Executive Mark Hurd, Lawrence Babbio, Sari Baldauf, Rajiv Gupta, John Hammergren, Joel Hyatt, John Joyce, Robert Ryan, Lucille Salhany and G. Kennedy Thompson. Board member Richard Hackborn chose to not stand for re-election. H-P shareholders also approved Ernst & Young as the company's independent public accountant.

NO !

TO ALL EDS / HP PERSONNEL

The common trade union front at HP / EDS call upon you not to accept the individual request for salary reduction.

It is unacceptable that:
- the local unions were not informed.
- the employer addresses individual employees.
- the need for this reduction is unclear and on top of the serious restructuring currently in progress at EDS.
- nothing is given in return (eg. Guarantee on job security, temporary aspect of the measure, -sacrificed pay must eventually return to the employees,…).

You can’t be forced to accept this salary reduction, you have the right to refuse without motivating why.

Management confirms that saying NO to the individual request for reduction will not have negative consequences for the individual.

Above point of view will further be commented on the employee meeting of 9 March.

Please do not hesitate to contact us if you have additional questions or comments.

Common Trade Union Front EDS & HP
ACLVB BBTK LBC-NVK

Belgium

HP/EDS “frozen day” was a success throughout Europe

Press release

The second European action day jointly organized by UNI-Europa and the EMF
throughout the continent to protest against HP/EDS restructuring plan, and its
consequent salary freeze, benefit cuts and redundancies proved to be a success. The
action was named “frozen day” in reference to the announced salary freeze.

In Germany, actions were organized in virtually all locations with staff meetings
reaching 100% participation in certain places. More than 900 employees gathered in
Rüsselsheim while the Bremen steelworks account was left empty. Workers in
Ludwigsburg used their lunch break to meet with their colleagues in Böblingen to discuss
the situation.

Smaller meetings also attracted a lot of interest as the one in the Sal Oppenheim
subsidiary. In Schweinfurt, IT employees from the former SKF even gave a hand to their
colleagues to organise the demonstration. Under the motto “Yes to HP, but only if
everyone is included” the action day received very good press and TV coverage in the
country.

Unfortunately, EDS management refused negotiations for a collective bargaining
agreement on job security, safeguarding of current terms and conditions of employment
and pay increase. On the contrary, they threatened the workers’ council with the closure
of other locations. This lead ver.di and IG Metall to call for a joint strike at 14 German
sites on February 10th.

Links to videos on strike in Germany (10.02.09):
http://www.youtube.com/watch?v=C_xHJdS8uqw&NR=1 (HR) http://www.youtube.com/watch?v=7OI5IhE2O1Y&feature=channel_page (RTL) http://www.youtube.com/watch?v=Rcb3SZB55ns (Wuppertal) http://www.youtube.com/watch?v=MAOdWlvUdag&feature=related (Ludwigsburg)

This action was supported by Spanish colleagues from EDS group of Comisiones
Obreras (CCOO COMFIA) who sent a solidarity letter in which they declare that “such a
reduction of labor entails dangerous levels of stress among workers and jeopardizes the
quality of service provided to customers and thus the business of this company”.

In France, a major demonstration was organised on January 29th in different cities. It
proved to be very uniting since workers from HP, IBM and EDS walked together under a
common banner to fight the antisocial policies of their employers with all trade unions
involved. The strike got very good media coverage with a major French TV relaying the
event in Paris.

In Belgium, a protest was held on Friday morning in front HP building in Diegem
addressing a number of open issues (workforce reduction, salary freeze, EDS integration,
social plan ...). Delegations from HP CDS, EDS and other HP sites joined to form a group
of 200 people. In the afternoon a meeting which was agreed prior to action took place
between union reps and HP management and resulted in an agreement on the HP social
plan.

In the UK, tech workers asked for “no compulsory redundancies” while union members
demonstrated outside the company site in Bristol. The union Unite said the “credit
crunch is not the problem. Short termist greed is the issue”.

Two strikes were organised at HP/EDS Italy during January in cities like Milan, Rome
and Bari. Although the participation rate reached 95% in certain cases, management
didn’t react.

More than 160 employees from HP and EDS jointly attended, physically or by phone, a
one hour meeting held by HP management in Austria after an action day took place at
HP’s headquarters in the country. Both EDS and HP’s works councils decided to work
together in order to solve common issues on frozen salaries, bonuses and allowances.

When it comes to Sweden, HP corporate management announced that the firm will cut
compensations and benefits but the bonus programs are maintained. The Swedish Union
Unionen can't accept this state of fact and is asking to meet with the management in
order to discuss bonus programs, the use of external consultants and the maintenance of
employment benefits.

As for the Netherlands, the union FNV Bondgenoten is examining the reduction plans
after a satisfactory agreement was reached regarding a social plan and expressed its full
solidarity with all the above mentioned actions.



Finally, it has also to be said that workers in Hungary are suffering job losses due to the
closure of several EDS centres in the country.
___________
EMF is the representative body defending the interests of workers in the European metal
industry.
UNI-Europa is the European trade union organisation for skills and services.
For further information please contact:
Isabelle Barthès, EMF Policy Advisor on Company Policy +32(0)2 227 10 12
Gerd Rohde, UNI-Europa + 41 792 02 19 28

High Tech Misery in China, HP involved

The Dehumanization of Young Workers Producing Our Computer Keyboards

"We feel like we are serving prison sentences.”

A must read !

Hurd got pay valued at $42.5 million or $34 million in '08, depending on how you calculate...

SAN FRANCISCO (AP) --

Hurd, 52, saw the value of his compensation in fiscal 2008 jump 31 percent over the previous year, according to AP calculations. The increase reflects the prosperous period HP enjoyed before the economic meltdown hammered the stock and cut into HP's profit.

Hurd also exercised $10 million worth of stock options and had $15.7 million worth of HP stock vest during the period, according to a regulatory filing Tuesday by the Palo Alto, Calif.-based technology company.

The biggest chunk of Hurd's raise came from cash incentives based on HP's performance during the 2008 fiscal year, which ended Oct. 31 and was a banner year for the company. For the year, HP's profit rose 15 percent to $8.3 billion, while sales climbed 13 percent to $118.4 billion. Those were big gains for a company the size of HP, which has faced questions from Wall Street about its ability to continue improving sales and profit margins at a steady clip.

Hurd, who joined HP in 2005 to engineer a major turnaround after the rocky reign of former CEO Carly Fiorina, has answered by aggressively cutting costs and positioning the company as a bigger challenger to IBM Corp. through the $13.9 billion acquisition of technology services provider Electronic Data Systems.

At the end of 2005, HP had sales of $86.7 billion and profit of $2.4 billion. When the company's current round of job cuts is complete -- HP is slashing 24,600 positions, nearly 8 percent of its 320,000 workers -- Hurd will have cut nearly 40,000 jobs in two big rounds of layoffs since he took the job. Under Hurd's watch, HP has also regained its title of world's biggest personal computer manufacturer from Dell Inc., though Dell has been stealing some of that ground back with a new retail strategy.

Hurd's changes have helped HP's bottom line but they did little to soothe investors' nerves in 2008, when HP's stock price bounced around before falling off sharply in September and October as the financial crisis worsened. The stock lost more than 25 percent of its value during the fiscal year. Many analysts say HP is vulnerable to the slowdown because of its exposure to the ailing consumer market through its personal computers and lucrative printer ink, and because it relies heavily on hardware sales, which have suffered as companies freeze information-technology spending.

Still, Hurd was rewarded in 2008 for steering the company to "exceptional and sustained" financial performance in his first three full years on the job. Hurd pulled down $23.9 million in performance-based cash bonuses in 2008, according to the filing, which was almost twice as much as the $13.3 million in cash bonuses he snagged in 2007.

Hurd, 52, was also rewarded with $7.9 million worth of stock-based compensation during the period, nearly $3 million less than in 2007. Hurd's compensation package also included more than $738,000 worth of additional compensation for things like: home security ($256,000), personal use of HP's corporate jet ($135,734) and a $71,000 mortgage subsidy Hurd is guaranteed for relocation expenses under his employment agreement.
Hurd's salary of $1.45 million increased only slightly over 2007.

HP also revealed in its proxy filing with the Securities and Exchange Commission that Richard Hackborn, an instrumental figure in building HP's printer division who served 33 years with HP before retiring in 1993, has decided not to stand for re-election to the board of directors at HP's annual shareholder meeting set for March 18. Hackborn has been an HP director since 1992.
The Associated Press' calculations of total pay includes salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. The calculations exclude changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the SEC.

In comments : depending on how you calculate, Hurd saw the value of his compensation in fiscal 2008 jump 68 percent over the previous year to $42.5 million !

Enough !

Mark Hurd to employees, November 24th : "We will take aggressive action on discretionary spending…And we’ll implement a number of cost saving initiatives that are going to be tough and that some people aren’t going to like…"

And now, the list of actions on "discretionary spending" :

- There will be no salary increases, except where legally required
- EAwards are suspended
- Comprehensive benefit reviews are continuing on a country-by-country basis to harmonize HP and EDS offerings based on market practice.
- Recognition and learning & development programs are also affected
...

Huge success of the first European action day in HP and EDS on 13th November

European Metalworkers’ Federation and UNI-Europa call for
mobilisation throughout Europe

Today, HP and EDS the trade unions and the workers have demonstrated their determination to reject the management plans to downsize the workforce and cutback the terms and conditions in HP/EDS by successfully mobilising and undertaking protest action in most of the European countries where HP and EDS have locations.

In Germany, workers and works councils’ meetings have been organised during three consecutive days.
In Austria, workers’ assemblies took place in front of headquarters in Vienna.
In Belgium as well as in Sweden, information meetings for workers have been organised during working hours in the different sites. Leaflets, pamphlets, badges and campaign material have been distributed.
In Spain, workers rallied in front of the different EDS buildings for 15 minutes.
In Italy, in the wake of the protest actions organised on 21 October, a two hour strike took place in the sites of Rome and Napoli. Flyers were also distributed to the population.
In the United Kingdom, actions to raise workers and people’ awareness were undertaken outside the larger HP/EDS sites.
In France, demonstrations took place in front of the buildings in most of the HP/EDS sites. In all EDS offices outside of Paris, a day or half a day of strike was organised.
Signatures against management plans have been collected in several countries, amongst them Germany, Denmark, Switzerland and Hungary.
In Italy and United Kingdom lobbying initiatives have been undertaken towards members of Parliament.

In the light of this successful European-width mobilisation the trade unions and workers’ representatives will meet shortly to discuss and prepare future actions.
___________
The EMF is the representative body defending the interests of workers in the European metal industry. The EMF has a mandate for the external representation and coordination of the metalworkers' unions and a mandate to engage in bargaining at European level.
UNI-Europa is the European trade union organisation for skills and services.
For further information please contact:
Editor, Peter Scherrer, EMF General Secretary
Isabelle Barthès, EMF Policy Advisor on Company Policy +32(0)2 227 10 12
Gerd Rohde, UNI-Europa + 41 (0)1 792 02 19 28

Caroline Jacobsson
Information & Communications adviser
*******************************
European Metalworkers' Federation, EMF
Fédération Européenne des Métallurgistes, FEM
Europäischer Metallgewerkschaftsbund, EMB
International Trade Union House (ITUH)
Boulevard du Roi Albert II, 5 (bte 10)
B-1210 Brussels
cjacobsson@emf-fem.org
www.emf-fem.org
http://www.gmworkersblog.com/
http://www.precariouswork.eu/
Phone: +32.2.227.10.54
Fax: +32.2.217.59.63

European trade unions act against compulsory redundancies

Press Information ▪ Press Information

European trade unions act against compulsory redundancies
and the cutback of benefits at HP and EDS

Demands on European action day on 13th November

Trade union and European Works Council representatives from HP and EDS have already made it clear on several occasions that they will not accept a merger of two companies merge with the aim of downsizing (see EMF press releases of 8th September and 15th October 2008). They have called on the new management to explain how and where the new merged company would grow and how this would benefit its employees. They reject the plans to lay off 9,330 workers. These plans exceed the ‘worst scenario’ expectations held by many.

Against this background, the European trade unions have decided to call on all HP and EDS workers to mobilise on 13th November in a demonstration of European solidarity against the management’s plans.

On 13th November, EMF and UNI-Europa affiliates throughout Europe will undertake local/national actions as a sign of protest against plans for mass redundancies and cutbacks in benefits. They will call for alternative solutions aiming at safeguarding jobs and securing a sustainable future for their companies.

On this day of unity and solidarity, they will call on management to:

- provide full information and proper consultation with the trade union/employee representative bodies both at European and national levels;
- recognise the employees’ right to bargain collectively and to negotiate social plans;
- stop any compulsory redundancies;
- provide a detailed plan for redeployment and re-skilling for those whose jobs are at risk and prepare for anticipated skills shortages;
- create the conditions for the establishment of a new EWC to be built on the best elements and practices of the existing EWCs.
___________
The EMF is the representative body defending the interests of workers in the European metal industry. The EMF has a mandate for the external representation and coordination of the metalworkers' unions and a mandate to engage in bargaining at European level.
UNI-Europa is the European trade union organisation for skills and services.

For further information please contact:
Editor, Peter Scherrer, EMF General Secretary
Isabelle Barthès, EMF Policy Advisor on Company Policy +32(0)2 227 10 12
Gerd Rohde, UNI-Europa + 41 (0)1 792 02 19 28

Letter to Mark Hurd

Mr. Mark HURD
President Hewlett Packard
3000Hannover Street
Palo Alto
CA93304 – 1185
USA

Brussels, 20th October 2008

Dear M. Hurd,

Re: HP/EDS workforce reductions in Europe

We are writing to you, as European trade union federations representing the HP/EDS workforce across Europe, and following meetings on 8 September and 15 October attended by both union and European Works Council representatives from 10 countries.

Our position is as follows:

- HP/EDS management should ensure that it meets its obligations to provide full information and proper consultation with the trade union/employee representative bodies both at European and national levels. It has failed to do this so far at European level.
- HP/EDS management should recognise the employees’ right to bargain collectively and enter into negotiations on the social consequences of their planned decision.
- HP/EDS management should not proceed with any compulsory redundancies/layoffs.
- HP/EDS management should provide a detailed plan for redeployment and re-skilling of the existing workforce in order to fill current and anticipated skills shortages as an alternative to redundancies in this reorganisation.
- HP/EDS management should create the conditions for the establishment of a new EWC which will capitalize on the best practices of each EWC agreement.

The trade unions will not accept that HP and EDS merge in order to downsize. They want the new combined company to say where and how it will grow and how this will benefit its employees.

Accordingly we would appreciate your commitment to provide the following:
- Full financial information on the savings HP/EDS wishes to make across Europe
- Full employment information for the next 3 years, including the total employee number for each year across Europe and broken down per individual countries

A detailed presentation on the future goals and development plans across Europe

The European Commission is currently reviewing the European works council Directive. We believe that the lack of full and meaningful information and consultation by HP/EDS with the trade union/employee representative bodies at European level is a glaring example of why there is a need for the EWC Directive to be strengthened.

We do hope that you will arrange for the information set out in paragraphs (a) to (c) above to be made available, by 7 November where possible.

You should understand that we are currently considering HP as a potential case to be raised with the European Commission and the European Parliament, as an example of why the European Directive needs strengthening. This is a will inevitably expose HP to unwelcome publicity.

We trust that such actions will not be necessary and look forward to your early response.

Yours sincerely,

Peter Scherrer Bernadette Ségol
EMF General Secretary UNI-Europa Regional Secretary

International Trade Union House (ITUH)Boulevard du Roi Albert II, 5 (bte 10)B-1210 Brussels
Tel: +32/(0)2/227 10 10
Fax: +32/(0)2/217 59 63
http://www.emf-fem.org/ ▪ emf@emf-fem.org
UNI-Europa
31, rue de l’Hôpital
b-1000 Brussels
Tel : +32 2 234 56 56
Fax : +32 2 235 08 70
http://www.uni-europa.org/

More information in the comments about EDS +HP employees from Germany and Italy in action again (picture above from Germany). Massive European Action Day : Novembrer 13th

Italian EDS unions already hold industrial actions (sept 22nd)

COMUNICATO STAMPA

Eds Italia. Calitri (Fiom): “Primo risultato dell’azione sindacale: un incontro con l’Azienda fissato per il 6 ottobre”. Oggi sciopero oltre il 90% e manifestazione nazionale a Roma

“Il grande successo dello sciopero odierno dimostra quanto sia profonda la preoccupazione diffusa tra i lavoratori di Eds Italia per il proprio futuro, e quanto sia stata forte la motivazione che li ha portati ad aderire all’iniziativa di lotta assunta oggi dai sindacati dei metalmeccanici Fim, Fiom, Uilm.” Lo ha detto Canio Calitri, coordinatore nazionale Fiom-Cgil del gruppo Eds Italia.

“Secondo i dati in nostro possesso – ha spiegato Calitri – le adesioni allo sciopero di 8 ore proclamato per oggi hanno superato il 90%. Un risultato già alto di per sé e altissimo se si considera che questa cifra è stata raggiunta in un’impresa collocata in un settore come quello della Information and communication technology, in cui il sindacato non ha mai avuto uno dei suoi punti di forza.”

“Del resto - ha proseguito Calitri - la convinzione dei lavoratori nell’aderire all’iniziativa sindacale è stata ben visibile nella manifestazione che si è svolta oggi a Roma. Al corteo, che da piazza della Repubblica ha raggiunto piazza Barberini, hanno partecipato infatti oltre 1.000 lavoratori, ovvero circa il 50% dei metalmeccanici dipendenti dalla multinazionale Usa nel nostro Paese.”
“L’iniziativa di lotta – ha ricordato Calitri – è stata assunta per difendere l’occupazione dai tagli che sono stati annunciati da Hewlett Packard dopo l’acquisizione di Eds, e per protestare contro la disdetta degli accordi aziendali comunicata il mese scorso dal management di Eds Italia. Lo sciopero e la manifestazione odierni hanno già ottenuto un primo risultato. Una delegazione degli scioperanti è stata ricevuta al ministero dello Sviluppo Economico che ha fissato, per il 6 ottobre, un incontro con l’Azienda sulle sue prospettive produttive e occupazionali.”

Eds Italia conta circa 3.000 addetti, di cui 2.000 con il Contratto dei metalmeccanici. I siti produttivi dell’Azienda sono collocati a Roma, Pomezia, Pozzuoli, Bari, Torino, Milano e Siena. A fine agosto, Hp ha acquisito Eds formando una multinazionale del settore Ict forte di oltre 300mila addetti. L’Azienda ha però annunciato tagli occupazionali che, a livello globale, potrebbero raggiungere le 25mila unità.

Fiom-Cgil/Ufficio Stampa
Roma, 22 settembre 2008

9.300 job cuts announced at European WorkCouncil (HP + EDS)

HP said on Thursday that its Europe, Middle East and Africa division would account for up to 9,300 job cuts over two years out of 24,600 previously announced cuts following its purchase and integration of EDS. Country numbers should be known on Oct, 6th. EWC urge Management to think redeployment instead pure workforce reduction.

HP surprises Wall Street with size of EDS job cuts

SAN FRANCISCO (AP) Extracts :

When Hewlett-Packard Co. announced five months ago it was acquiring technology-services firm Electronic Data Systems Corp., Wall Street expected big layoffs from the combined company.

But the size of the job cuts -- 24,600 jobs over the next three years, nearly 8 percent of HP's 320,000-employee work force -- came as a shock when HP laid out its plans Monday for integrating EDS.

"Today's story is kind of an eyebrow-raiser -- I was surprised at the magnitude of the cuts," said analyst Bob Djurdjevic with Annex Research.

The cuts represent HP's most aggressive cost-cutting move yet under Hurd, who engineered the $13.9 billion acquisition to challenge IBM Corp. for more of the lucrative, long-term business of helping companies manage their computing infrastructure.

Most of the cuts will come from within EDS's ranks, and nearly half will be jobs in the U.S., HP announced Monday after the stock market closed. HP said it plans to eventually add about half the positions back as different jobs in different departments within the company.

Some of the areas expected to get hit include the finance, human resources and legal departments, areas where there are traditionally overlapping duties within combined companies.

HP had not previously detailed how many employees of the combined company would lose their jobs. Before the acquisition, HP had 178,000 people and EDS had 142,000.

HP expects to save $1.8 billion per year from the cuts once the restructuring is complete. The company will incur a $1.7 billion charge in the current three-month period, its fiscal fourth quarter, for a goodwill adjustment and other costs connected to the restructuring.

At a conference with financial analysts Monday, HP Chief Financial Officer Cathie Lesjak said the EDS deal is expected to add to HP's net profit in the 2010 fiscal year.

As huge as the reductions are, they're not the biggest in tech history.

One of the biggest challenges facing Hurd has been finding new ways to improve sales at a company that last year cracked $100 billion in revenue for the first time while keeping Wall Street happy with improving profit margins.

Hurd has been aggressive about cutting costs since he was hired in 2005. His first big act was a major restructuring that eliminated nearly 15,000 jobs.

European trade unions demand full information and consultation from HP in EDS takeover

Press release :
More than forty trade union representatives from Austria, Belgium, Germany, Spain, France, Sweden, UK, Italy and the Netherlands, met on 8 September to discuss the Hewlett-ackard (HP) takeover of Electronic Data Systems Corporation (EDS) at a meeting organised jointly the European Metalworkers’ Federation (EMF) and UNION NETWORK INTERNATIONAL (UNI).

Participants expressed concerns about the possible effects on employment and working conditions of the take over of EDS by HP. They also voiced discontent about the lack of information provided by both EDS and HP managements so far.

The meeting :
1) Called on HP management to ensure full and meaningful information and consultation with the trade union/employee representative bodies both at European and national levels prior to decision-making;
2) Expressed their opposition to any compulsory redundancies/layoffs;
3) Urged HP management to provide a detailed plan for redeployment and re-skilling of the existing workforce to fill current or anticipated skills shortages as an alternative to redundancies in the event of reorganisation.

UNI and the EMF will closely monitor the impact on the workforce of any proposals expected to be announced by HP management on 15 September and with affiliated trade unions take all possible steps to safeguard the interest of the workers.
___________
The EMF is the representative body defending the interests of workers in the European metal industry. The EMF has a mandate for the external representation and coordination of the metalworkers' unions and a mandate to engage in bargaining at European level.

For further information please contact:Editor, Peter Scherrer, EMF General SecretaryIsabelle Barthès, EMF Advisor on Company Policy + 32 2 2271057UNI Head Office, Avenue Reverdil 8-10, CH- 1260 NYON, Tel: + 41 22 365 2100
________

HP laying off in Corvallis

Portland Business Journal :

Eugene television station KVAL reports that employees at HP’s Corvallis plant began receiving layoff notices Monday. In a statement, the company said its imaging and printing group announced in June its plans to “realign and streamline” by reducing its business units from five to three. Some parts of the imaging and printing group “will experience reductions while investments will be made in high growth segments of the business,” the company said.

HP is reported to employ about 2,500 people in Corvallis, and 1,000 in Vancouver, Wash. The company declined to confirm these numbers. These two locations, along with a site in Boise, Idaho, are part of HP’s imaging and printing group.

Recent reports in The Oregonian and The Columbian have said HP plans to lay off as many as 300 people in Corvallis, and that some engineers and marketing employees in Vancouver could be told to find work with other HP divisions. HP is also reported to have put its 174-acre Vancouver campus up for sale, with plans to lease it back. HP declined to comment the matter.

EDS and HP Unions : already working together in France

May 20th : hundreds of EDS France employees on strike to fight back WFR and site closures, HP France Unions were there. Same day : IBM France also on strike, for salaries.

HP-EDS merger could lead to services job cuts

"We're looking to streamline our overhead," Shane Robison, HP's chief strategy officer says.

Research and consulting firm Technology Business Research Inc. is predicting fairly substantial cuts. The firm noted that H-P's services division and EDS will have a combined headcount of about 209,000 workers. "The addition of EDS will be a drag on [H-P's service] margins, and CEO Hurd will be aggressively targeting efficiencies," the research firm said in a note. "TBR expects that initial headcount reductions will be at least 10% to 15% of the combined headcount."That would mean 20,000 job cuts or more, although the consulting firm didn't speculate on how those cuts would be divided between EDS and H-P employees.

HP to buy EDS for $13 billion-plus; biggest HP deal since Compaq purchase

Three obstacles that HP and EDS will need to overcome in order for the deal to succeed :

1/Go global : U.S information-technology services companies are in a period of upheaval right now due to the emergence of companies in countries like India that can do a lot of the same work at a cheaper price. IBM and Accenture have both adapted to the new global marketplace, adding staff around the world. EDS and H-P have been slower to globalize. In order for the combined company to substantially improve its margins and win customers looking to cut costs, it will need to shift more work overseas.

2/ Vendor independence : one of EDS's hallmarks was that it didn't have a vested interest in selling its customers software and hardware from any one tech vendor. That independence is now gone: Even if H-P services tries to position itself as vendor agnostic, customers will still be suspicious every time they receive a recommendation for H-P equipment. One mitigating factor: The PCs and other tech equipment H-P sells is fast becoming a commodity. H-P CEO Mark Hurd could be betting that in a few years businesses won't care what company they buy this equipment from because it will all be the same.

3/ Culture clash : forget about how well EDS's suit-wearing consultants will fit in California. The bigger culture clash is between a product-centered company, H-P, and one focused on operations, EDS. Of course, the combined company will be so large and operate in so many different places that it's hard to imagine these legacies mattering as much as, say, how the new company adapts to the various cultures around the world it is sure to expand into.

Source : Peter Allen, a partner at the outsourcing-advisory firm TPI.

HP and journalists settle spy claims

CNET

HP settled claims on Wednesday with four reporters at the heart of a scandal involving claims that the world's biggest PC maker engaged in corporate espionage to plug a boardroom leak. HP and Terry Gross, the attorney representing the journalists, said the company would donate money to several charities chosen by the journalists as part of the terms of the settlement. They did not say how much.

"The matter has been resolved to the mutual satisfaction of the parties, and we are pleased to put this matter behind us," said Hewlett-Packard spokesman Emma McCulloch. She said the company was pleased the money would go to charities.

The scandal, which came to light in late 2006, focused on allegations that Hewlett-Packard hired investigators who impersonated reporters, board members, and employees to obtain private phone records to find the source of leaks to the media in 2005 and 2006. The two sides have been holding settlement discussions since December 2006, Gross said. "It was hard fought to get to a resolution," Gross told Reuters. "I would have expected that they would have taken a tone a long time ago that was basically 'We did wrong. We should make up for it,'" he said. A separate lawsuit filed against HP by three CNET News.com reporters is still pending in a San Francisco court. Those reporters were not part of this settlement.

Hurd Rebuilds HP by Debating `Every Single Dime'

Bloomberg, extr. :
Mark Hurd : "What we want to do is develop a culture that says, `Iwant to debate every single dime,'' . His cuts include spending on jobs, data centers, realestate and even file cabinets... Hurd's next challenge may be weathering a U.S. slowdown. Hurd plans to keep focusing on costs. Last year, the company generated $12 million an hour in sales while spending$11 million on operations. He wants to widen that gap.``I've had a chance to work around high-profile maniacs like Tom Siebel and seasoned guys like Lou Gerstner,'' formerleaders of Siebel Systems Inc. and IBM respectively, said TomHogan, hired by Hurd in February 2006 to run the software unit.``Mark is the most operational CEO I've ever seen". Hurd learned operations at Dayton, Ohio-based NCR Corp.,which he joined in 1980 as a field salesman.
...
`The more you leave the kids in the room to figure it out on their own, the more trouble you're going to get,'' Hurd said. He punctuates almost every sentence with numbers -- marketstatistics, growth rates -- and draws on a flip chart. When he joined HP, expenses were rising as fast as revenue, he said. Within three months, Hurd announced plans to slash 10 percent of the workforce, or 15,000 jobs, to save $1.6 billion a year. He pared retirement benefits to save$300 million. In 2006, he announced plans to replace 85 aging datacenters with six state-of-the-art facilities. That will cut such costs to 2 percent of revenue by early 2009 from 4 percent in 2005. All these moves helped profit more than double to $7.26billion last year from 2004.``If Carly was operating at the 35,000-foot level, MarkHurd is operating from 500 feet,'' said James Post, a professor of management at Boston University.

Hurd has admitted making mistakes. After a spying scandalin 2006 led to the resignation of HP's chairman, two directors and the general counsel, Hurd took responsibility for a probe into boardroom leaks that grew into a plot to spy on directors and reporters. He acknowledged his failure to supervise the investigators and won the backing of investors and analysts after he pledged to repair the company's image.
...

More cuts are planned, including combining call centers in the U.S., Hurd said. HP also aims to pare realestate outlays a third in two years by ``taking advantage of the fact that people are mobile and they don't come into the office every day,'' Chief Financial Officer Cathie Lesjak said. ``We don't have a lot of file cabinets that are necessary.' 'That doesn't mean HP isn't investing in thebusiness, Hurd said. It spent about $7 billion last year on acquisitions, mostly software companies, and made $3 billion in capital expenditures.``You get the strategy right, get the operating model right, get the people right, I mean generally, good things happen to you,'' he said.

HP CEO gets $26M in 2007 pay

HP CEO Mark Hurd received compensation the company valued at $26 million for the 2007 fiscal year. Hurd, 51, took home $1.4 million in base salary, another $1.4 million in bonus money and nearly $12 million in cash incentive payouts.

Hurd also received shares of restricted stock valued at $6.8 million and stock options worth nearly $4 million during fiscal 2007, which encompasses the 12-month period that ended Oct. 31. Also included in Hurd's pay package was $515,000 in additional compensation, including more than $138,000 in restricted stock dividends, nearly $126,000 in expenses for home security services and a mortgage subsidy of about $111,000.

In addition, Hurd made $4.8 million on stock options he exercised, and he had $7.4 million worth of HP stock vested during the latest period. The company has cut costs by consolidating data centers and corporate offices and aggressively slashing its headcount, including the elimination of nearly 15,000 jobs in a massive restructuring launched shortly after Hurd's arrival as CEO and completed in October.

Some 3,000 workers also left the company as part of an early retirement program that HP initiated last year. Investors have been pleased with the changes. Since Hurd took the reins of HP in April 2005, the company's stock price has more than doubled, from around $20 to more than $40 today, a rise that has created more than $50 billion in additional shareholder wealth.

The Associated Press' calculations of total pay include executives' salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. They may vary from totals that companies report.
HP calculated that Hurd's pay package was worth $25.3 million.

" Is the work of colleagues at HPS poorer ? "

Variable Performance Bonus heavily criticized by German Works Council (first comment)

Businessperson of the Year !

Business Week names Mark Hurd Business Person of the year !

An Open Letter to the Director of HP Corporate Human Resources

An Open Letter to the Director of Corporate Human Resources, Marcela Perez de Alonso, by the Five French Unions :

Marcela,

Our approach may appear unusual, however if the five Unions present within HP France have agreed to address you directly, it is to invoke a disturbing situation which has generated a lot of emotion amongst HP’s French employees, and which unfortunately has not proved to be solvable through usual consultation and negotiation processes.

The radical changes to the Range Setting which sets employee’s paygrade according to Job Function have lead to the following situation in France:

· Mainstream Population: 73.2% of employees suffer a decrease of 1 to 2 paygrades, whilst only 2.7% increase by one paygrade

· Sales Population: 40.7% of employees suffer a decrease of 1 to 2 paygrades whilst only 3.8% increase by one paygrade

This announcement was received as a shock by French employees, and has been difficult to accept for three reasons:

1 - Loss of confidence in the rating mechanism :

Most people accord importance to the Job and Wage architecture as a way to position their value to HP and career progression. Proceeding with such massive paygrade degradations have provoked feelings of personal devaluation, and has directly lead to the mistrust of the job and rating mechanism. It has disappointed HP employees who saw their efforts rewarded in the wage and earnings system. Consequently these massive degradations are undermining employees’ motivation and morale.

2 - France unfairly affected :

Whilst EMEA as a whole is impacted by a drop in paygrades for an average 20% of the workforce, France is affected to the tune of about 60%. What might appear elsewhere as an adjustment to the system, because of the massive scale of degradations in France it is seen by many as a sanction of French employees.

3 - Lack of transparency :

Prior to this new range setting, French HR had always justified the positioning of pay grades in France as being market-compliant. The explanations for the new mechanism of range setting are presented as: "Market research, revision of the “competitive index”, new policies "on the pay grade ranges”. But neither Union Representatives nor their appointed Experts have received communication of the new market research or how they apply to jobs within HP France. This makes the exercise completely opaque, and it is impossible for us to understand or verify. The underlying logic of a very important change to pay market analysis from one fiscal year to another remains totally incomprehensible, and through lack of justification it cannot be serenely embraced by employees.

Faced with this situation, and on several occasions, the French Unions have invoked the frustration and incomprehension expressed by employees, both to HR France (Pierre-Yves Tilly) and to the France Country Manager (Yves de Talhouët). Pressed by employee meetings at all French sites and petitioned by over 1800 signatures, the unions have asked for:

· A moratorium on the application of the new range settings
· The provision of information needed to gain a detailed understanding of the motivations behind the changes in order to be able to discuss in a concerted manner their adaptation to the HP France population.

HR France appears to have understood our arguments and our discontent, and apparently requested to HR Corporate a moratorium on the implementation. However their response is that this has been refused. However, HP France employees have difficulty assimilating these changes, and do not wish to internalise their loss of confidence and hopes, and their frustration. Since no further progress on this issue seems possible in France, we hereby are informing you of the situation in France and ask you formally for a response to our requests:

· A moratorium on the implementation of the measure
· Access to the detailed information which underlay the changes to the range setting system so that we can openly negotiate their application in France.

Finally, we would also ask you to respond to this open letter by explaining directly to french employees the foundation and the benefits of these changes as well as any clarifications that you consider appropriate to address the unhappiness that the measures have provoked.


Best regards,

The Five French Unions.

Employee talks : "Industry benchmark excuses"

"HR, speaking for management, sends out notes each time cuts in benefits, elimination of retirement plans, job re-classifications and even office cube-size reductions are announced. The notes justify the reductions by basically saying, "After careful analysis of what is going on in the market, it was found that HP was being too generous to its employees and is lowering the benefits to be more in line with market conditions."

Interestingly, while externally we are trying to set the industry agenda, internally it oftentimes feels like we are on a race to the bottom of the pack, using industry benchmarks as excuses.

I know it is self-serving to complain about what I have lost and I know that cutting costs in our business is a fact of life for the rest of our lives. Yet, I wonder how much more can be squeezed out of us before the career becomes just a job — and the job is done just according to spec. If my pay and benefits are set by the industry benchmark, should the quantity and quality of the time I spend on the job also be industry-average ? "