Family feud

I looked on Sympatico’s Canada 411 site. I tried the new Superpages directory. I even looked at U.S. telephone listings, but as far as I can tell, there is no man or woman with the last name of Compaq.

We thought it would be funny, you see, to call up Joe Compaq, who we hoped lived in a remote region like Cold Lake, Alta. or Boise, Idaho. With luck, he would be an Amish fisherman and it would take some time just to make him understand what kind of publication this is and why we were calling him. Then we would ask for his take on the proposed merger of Hewlett-Packard and Compaq Computer Corp., and the response — whatever he said — would be irony gold.

Surely the perspective of Joe Compaq, if he existed, wouldn’t be any more unwelcome than that of Walter Hewlitt, the 57-year-old son of HP co-founder William Hewlett. A chairman of one of the world’s largest charitable foundations, Hewlett is also the driving force behind a movement that could stop the merger cold. Late last week his co-founding family counterpart, David Packard, got even more aggressive with the announcement that his foundation (set up in memory his father, David Packard Sr.) has reached a preliminary decision to oppose the deal. Don’t expect to see HP chief executive Carly Fiorina at any family reunions.

Before anyone starts sounding the death knell for the merger, however, a little number crunching is in order. The Hewletts, which besides Walter include sisters Eleanor and Mary, control about five per cent of HP’s shares. The Packards, which besides David include siblings Nancy, Susan and Julie, have more than 12. While this represents a reasonably significant chunk, Fiorina need muster only 50 per cent of the shares in order to make her dream a reality.

Of course, the involvement of the founding families has only partly to do with numbers. This is an irresistible story, one that has forced the normally reclusive scions of IT pioneers back in the limelight. It plays directly to the American nostalgia for the feisty underdogs who started out their company in a garage and turned it into an industry juggernaut. Believe me, HP executives trot out this story at every opportunity, most recently at the Queen’s Park launch last week of an ITAC Ontario initiative to help volunteer agencies (Useless IT trivia: HP donated $5 to charity in its first year).

There is a stirring sense of next-generation determination as the two sides rally together against “that woman,” who has already been down this road before. Fiorina originally sought out not Compaq but PricewaterhouseCoopers, an alliance that was doomed, I’ve been told by insiders, by a culture clash between the two organizations. Basically the consultants at PwC didn’t want to work for a product company, and HP’s consultants felt themselves being edged out. The Hewletts and Packards didn’t make much noise over that deal because it never really got off the ground, but it is strange that no one has questioned the family as to whether they think it would have made more sense.

On the other hand, who cares? Why should anyone pay any attention to Bill and Dave’s kids? Though several members of both families have made tremendous contributions to various charitable organizations, none of them has a great track record in IT. Only Susan Packard Orr has a degree in computer science, leading an obscure company called Technology Resources Assistance Center to create software for non-profit organizations. Walter Hewlett is referred to as an “independent software expert” in various media reports, but his criticism of the merger is that it takes HP’s focus off its profitable business as a printer vendor. Perhaps Hewlett wants to see HP slog it out with the Lexmarks and Epson’s of the world, but this doesn’t show a lot of vision.

There may be great reasons why HP and Compaq shouldn’t join forces; it seems like readers offer me new ones every other day. That doesn’t mean shareholders should allow themselves to base their vote on the psychological impact of the HP families’ dissent. To make the right decision, the governing powers of HP and Compaq must listen to the customers, the channel and other business partners and stop treating this merger like a family affair.

sschick@plesman.com

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