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Why Is Carly Fiorina—a Symbol of Corporate Excesses—McCain's Favorite CEO?

When John McCain wants to talk economic policy with voters—especially female voters—he sends out Carly Fiorina, a former CEO of Hewlett-Packard, a senior adviser to McCain's presidential campaign, and chairwoman of the Republican National Committee's Victory Fund. For example, days ago, after Barack Obama accused McCain of proposing an additional $300 billion in tax breaks for "big corporations and the wealthiest Americans," Fiorina appeared on CNN to defend the Arizona senator. (She first claimed that Obama was wrong to say that ExxonMobil would receive additional tax breaks from McCain, but then she acknowledged McCain's tax cuts for all corporations would cover big oil companies.) And this week, McCain dispatched Fiorina on a speaking tour in Ohio and Pennsylvania targeting female voters. She's even been mentioned as a possible McCain running mate.

But why should anyone listen to—let alone vote for—Fiorina?

Her stint as a corporate titan was more mixed than master-of-the-universe. In 1999, Fiorina took over Hewlett-Packard, the troubled computer company, becoming one of the top women in Corporate America. Previously, she had built a successful career mostly in marketing and sales at AT&T and Lucent, but she had the not-so-good fortune to be taking the helm of an engineering-driven tech company as the tech boom was ending. Her solution to HP's ailments was controversial: buying Compaq. She pushed the $19 billion acquisition over the opposition of many HP stockholders, including, most notably, Walter Hewlett, the son of the company's founder, who argued the merger would not make HP more competitive.

At HP, Fiorina developed the reputation of a manager who knocked heads together—or who chopped them off. And there were massive layoffs during her tenure. In 2003, the company announced it would dismiss almost 18,000 people. (That year, the firm posted a $903 million loss on $56.6 billion in revenue.) When the outsourcing of jobs turned into a national political issue, Fiorina became the poster-girl for an industry campaign aimed at blocking any legislation that would restrict a company's ability to can American employees in favor of workers overseas. She and executives from seven other tech companies issued a report that argued that any such measures would hurt the U.S. economy. The best way to increase American competitiveness, they declared, was to improve schools and, yes, reduce taxes. At a Washington press conference, Fiorina said, "There is no job that is America's God-given right anymore. We have to compete for jobs." The remark did not go over well with critics of outsourcing, who have ever since used it as an indicator of corporate insensitivity.

Fiorina's stint at HP was marked by other moments of controversy. In March 2004, after HP shareholders voted 1.21 billion to 925 million to expense stock options, she opposed the move, essentially opting to stick with accounting practices (that were used by other corporations) that did not reveal a company's true value. That same year, Forbes reported that Hewlett-Packard was "among many other U.S. companies that kept offices in Dubai and were linked to Iranian traders there." The article suggested that HP and other countries were skirting export controls to trade with Iran. And in early 2005, Fiorina announced that pop star Gwen Stefani would join the HP design team and work on the company's line of digital cameras.

Fiorina wasn't around long enough to see her Plan Stefani to completion. In February 2005, she was pushed out of HP. The company's board, with which she had been battling for years, had had enough of her. The Compaq merger had not yielded the benefits—improved shareholder returns and greater profits—she had promised. At the time of her dismissal, Hewlett-Packard stock was trading at about the same price as when she first unveiled the Compaq deal. Eighty percent of the company's operating profits were coming from its old-line printing business. She had not succeeded in reviving HP as a computer-selling powerhouse. The day she was dumped, the company's stock price rose 7 percent. That was Wall Street exclaiming, Hooray. As Robert Cihra, an analyst with Fulcrum Global Partners told Money magazine, "The stock is up a bit on the fact that nobody liked Carly's leadership all that much. The Street had lost all faith in her and the market's hope is that anyone will be better."

A Business Week post-mortem noted,

Management experts say Fiorina, through the Compaq acquisition, created a good executive team with a can-do attitude. That helped a rank-and-file, engineering-focused organization consider how to market products instead of simply making them. But the charismatic leader refused to delegate operations to top lieutenants managing HP's far-flung divisions. What's more, she had a tough time getting them to work together....

As a result, many of the execs who came to HP through Compaq have jumped ship since the merger. That left Fiorina with much the same slate of HP'ers who were in key positions before the blockbuster deal.

Larry Magin, technology analyst for CBS News, observed,

There is plenty to criticize about Fiorina's tenure at HP. At this point, the changes that Fiorina made didn't turn out so well for the thousands of Hewlett-Packard and Compaq employees that were laid off and the millions of HP stockholders who lost equity since she took over. HP stock is worth less today than it was in 1999. Dell and IBM stock has increased in value.

But Fiorina did fine for herself. She departed the company with a $21 million severance package. "I doubt very much that she's worried about making ends meet," Magin cracked.

In her 2006 book, Tough Choices, Fiorina defended her management of HP and claimed the firm's subsequent successes were a result of changes she had implemented. But it had been a rocky tenure at best. Nevertheless, McCain is deploying Fiorina as a surrogate on economic policy and as an ambassador to women voters. But in this time of economic insecurity, there's not much about Fiorina's time at HP that can be reassuring to voters (female or otherwise) experiencing financial jitters. After six years at Hewlett-Packard, she ended up symbolizing not one but at least three corporate excesses: outsourcing, M&A-mania, and golden parachutes. Workers and shareholders did not prosper during her reign, but Fiorina made millions, got a book deal, and now is a top PowerPointer for a presidential candidate. She's a real American success story—for corporate Republicans.

Comments

Running a corporation does not qualify one as an economist and Fiorina is not that. Its interesting that Obama goes to the Brookings Institution to hire as an adviser Furman, a renowned expert on fiscal policy and McCain digs out Carly Fiorina, a failed corporate manager and aspiring political hack.

Posted by: David Davies on 06/13/08 at 7:34 AM Respond

Well maybe she 'should be' in GOP politics -- that other business failure, GWB, made something of himself -- lately our political system has been a home for such looser, loser persons running out their karma: so long as we could reverse this general trend of becoming a third world nation during their "leadership..."

Posted by: Cornycopious on 06/13/08 at 11:46 AM Respond

Great. McCain to have a running mate who does not know how to do anything except make personal profit. She will fit right in.
21 million dollar golden parachute. Reprehensible human being, man or woman.

Posted by: tj on 06/13/08 at 12:17 PM Respond

A military source that was home on leave said that leadership in the military is telling the troops that in the near future there is going to be food wars and gas at $10./gal. in the United States; therefore people trained in economics should be a high consideration for leadership of the country, but it's NOT a priority for the REPUBLICANS.

McCain admittedly has no knowledge of economics and strictly relies on others, McCain's decision making definitely will not reverse the Bush/DLC curse any more than Carly Fiorina did for Hewlett Packard.

[IMHO, we must do what Hewlett Packard did and impeach Bush; otherwise our country won't be able to get back to a solid footing.]

With McCain having no knowledge of economics, he is prey to people like Carly Fiorina, who have no knowledge of economics. It appears that few Republicans see the need of vetting for a knowledge of economics, as having a knowledge of economics is not necessary when the REPUBLICAN solution is to keep all the money of the nation for themselves; it doesn't matter about the rest of the LEFT WING world, as they wouldn't know what to do with money if they had money anyway, which is McCain's RIGHT WING EXTREME REPUBLICAN philosophy.

Posted by: MarthaA on 06/13/08 at 12:40 PM Respond

Figures he'd pick a spy

Posted by: Donna on 06/13/08 at 1:27 PM Respond

Carly never intended to do good by doing well for anyone but herself. She got what she came for, lifelong financial security. The shareholders and employees can go to hell as far she was concerned. Like Bush she wanted to be a dictator. She failed to make others happy and she was shoved off with a golden parachute.

Posted by: Kal Palnicki on 06/13/08 at 1:52 PM Respond

Carly Fiorino is a big, fat loser. That's not a sexist comment, just a description of her tenure at HP.

Posted by: Capaneus on 06/13/08 at 3:17 PM Respond

The original Hewlett and
Packard made the company
what it is. I agree with the
other comments.

Posted by: Thomas on 06/13/08 at 3:50 PM Respond

This just in from the typo police: The CBS analyst's name is Larry Magid.

Posted by: Jon on 06/13/08 at 5:14 PM Respond

I knew some people at HP overseas- they said her leadership style was dynamic but quite abrasive- she would force things through without consulatation or collabortaion. Also, and this is politically important, she was bad at image control- at the same time they were laying off people, she bought an expensive corporate jet for her own use. It doesnt matter if the jet saved money for the company in the long run, it was still bad timing and did not endear employees to her. If McCain chooses her as VP, it would be a BIG mistake for him- good for dems though.

Posted by: MS on 06/13/08 at 11:00 PM Respond

As a long time Compaq/HP employee I can tell the Obama campaign that this is deadly ammunition against John McBush. They should yell this from the mountaintops in Houston, Palo Alto, Denver, Boise and Boston. Those are areas with very large concentrations of now former Compaq and HP employees that fell victim to Ms. Fiorina's devilish plans.

Posted by: Serverjock on 06/14/08 at 4:05 AM Respond

It would appear that putting the 'thought' out of a Fiorina on the McCain ticket is nothing more than more pandering by McCain for the Clinton voters. Being a senior female I am so sorry to see that women are 'blinding' themselves to the issues of importance to women by their undying support of Hillary. John McCain has proven, in words - vetted, that he lacks respect for women. During the 2000 campaign did he really call his wife, in front of reporters, a word that begins with a "c"????? Think ladies before you leap onto a McCain bandwagon.

Posted by: Mary on 06/14/08 at 8:43 AM Respond

booktip:
C. N, Parkinson: Parkinson's Law
(first published 1958 or so)
in which he describes how to rise
inside an organization to the top
by way of reaching the highest level of incompetence. All this by increasing the costs, like a
rapidly exploding bureaucracy, until the point comes that he is
a serious problem for the organization and gets the golden handshake in order to leave.
When the book was written, the
world was still a sleepy place
compared to what really happened after that. The amounts paid out to anyone qualifying according to that criteria far beyond this satirical book.

Posted by: Joe on 06/14/08 at 10:08 AM Respond

It is AMAZING to me that anyone who was aligned with the policies of Hillary would vote for an Old, Fat, Rich, White-Man............which of course is polito-speak for REPUBLICAN. It would be the ultimate act of cutting off ones nose to spite their face! If an ex-Hillary supporter would vote for a Dinosaur like John McBush.........then they DESERVE exactly what they get!

Posted by: jnh88kr on 06/14/08 at 9:59 PM Respond

Mrs Fiorina came to HP with a mandate of change. This implies several consequences that were difficult for all to accept. However, she pulled off the most successful large IT merger ever and HP is currently well positioned in several of its markets, in part thanks to Mrs Fiorina.

Posted by: John Hagie on 06/15/08 at 3:28 AM Respond

I think this woman ruined HP and turned the company from an engineer driven UNIX/LINUX/Research Lab company into a nightmare. Like so many right wing corporate/GOP types, she tied HP into big business (read Microsoft & Intel) and crippled its ability to be dynamic. HP machines are lagging in technology and along with HP's wholesale adoption of MS Server technology they have become slow and backwards. I am really amazed at the choice of this person for anything except a janitor at a fast food restaurant, or other position where she can't do any harm.

Posted by: A RedHatndor Kiss on 06/15/08 at 6:16 AM Respond

It almost seems laughable to me that any woman with an ounce of intelectual honesty(or for that matter....common sense)would vote against their own interest just because another woman suddenly says that they were impressed with the "womens" candidate! And hey, there's this guy that would do a good job for you since you hate the "other" guy now. Fiorina is just another wolf in sheeps clothing. Another Big Business Corporate Whore who is a member of the "I got mine so don't rock the boat cuz everything is hunky-dory" Club. In other words a typical republican. The warning to any woman considering Fiorina's pathetic attempts can be summed-up in one phrase. "Be a sucker for the rich.............vote republican"

Posted by: jnh88kr on 06/15/08 at 8:09 AM Respond

Fiorina said, "There is no job that is America's God-given right anymore. We have to compete for jobs."
Why is it that the CEO and other top management jobs are never outsourced?I'm sure we could find plenty of folks with MBA's & PHD's in India and China and all of the other countries that so many other white collar jobs requiring much education have been outsourced to, to run our corporations much cheaper than these crooks.

Posted by: zqahtt on 06/16/08 at 8:27 AM Respond

Given her track record, and McCain's total lack of any sort of feel for what is going on in this country from an economic standpoint, at best we can say that they deserve each other.

What is it with the Rethuglicans that they cannot look out the rose-tinted windows of their limos or penthouse suites and see what the bloody hell is going on in this country? I can see where Carly has at a minimum, $21,000,000 worth of reasons, and McCain (through marriage), has at least $100,000,000 worth of reasons; but what is wrong with the people that show up at these rallies, that supposedly represent the working class?

I read a while back where someone said there are 2 types of Republicans: Millionaires and suckers. Truer words were never spoken!

Posted by: buzzbike on 06/16/08 at 9:03 AM Respond

This beyotche is an utter failure, just like the war criminal she represents. They both belong in a federal penitentiary, not in the White House!!!

Posted by: The Conservative Deflator on 06/16/08 at 9:50 AM Respond

I believe that Joe has confused Parkinson's Law ("work expands to fill the available time") with the Peter Principle ("an employee tends to rise to his/her level of incompetence").

Posted by: Mark Huibregtse on 06/17/08 at 6:39 AM Respond

I certainly agree with the author about Carly Fiorina. I worked for Hewlett Packard doing the reign of Carly and all we got from her was a bunch of bull shit. She imposed a freeze on employees raise for a year while she and her executives were receiving huge bonuses. I worked on the floor as a forklift operator making $9.20 per hour. At that time Hewlett packard was raking in a quarterly profit of 3 billion dollars, yet, Carly had us working a year without good compensation while she was making trips around the world enriching herself without regard to those who were doing everything possible to make the company better. She will not be the one to lecture me about making our economy better. Her position with Sen. Mcann is to bolster her self image and continue to boast as one of the most successful female executives in the United States when not even knowing a thing about the economy. Her decision on outsoutcing American jobs helps with the situation we find ourselves, the economy. Please do not listen to her. She's nothing but a joke.

Posted by: Trokon Gbadyu on 06/17/08 at 9:02 AM Respond

As in the French Revolution, John "McBush/McSame" McCain IS another Marie Antoinette; and, of course, as a Marie Antoinette will pick another Marie Antoinette in Carly Fiorina to help him do Marie Antoinette things, while the people are suffering. But we all know what the eventual result of "Let them eat cake" was, don't we? After all when the people didn't have bread, there was no way possible for them to have cake; and McCain and his chosen VP are truly like Marie Antoinette; well protected behind their wealth to the extent that they, like Marie Antoinette, have no idea, much less care what is actually happening economically in the real world of the 70% MAJORITY COMMON POPULATION.

Posted by: MarthaA on 06/17/08 at 10:52 AM Respond

I worked for HP when Carly came in. She was useless. She centralized control of the company and then sent ineffective and crude policy bombs into the divisions that caused chaos.

When Compaq was acquired she kept Compaq product divisions and HP sales and marketing. Completely the wrong way around.

She is utterly useless.

Posted by: blah blah on 06/18/08 at 7:46 AM Respond

She's blond, tall, and good looking. Doesn't McCain have a weakness for this?

Posted by: TJ on 06/18/08 at 10:02 PM Respond

Capitalism is tough sledding. You people decry the short term effects of a strife driven and moribound clique of an HP Board that was resting on its laurels, with nine quarters of no growth. You also seem to believe the Kool-Aid that ivory tower economists from Berkely know more than real life company managers. Bull! She increased R & D, and pushed through a successful merger that costed the company and shareholders temporarily, but in the long term saved the day. As a director on two company boards, I have experience in how that often happens, especially during a downturn when there are 'tough choices' to be made. It was a dysfunctional and cliquish culture at HP, and in the last bastion of misogynistic complacency. Through it all, Carly became a better person, a humbler and more spiritually sensitive woman of greater talent and smarts than 95% of your regular politicians. Women should pat themselves on the back that she is being shortlisted for VP. She answers questions without the usual evasiveness, is no Neocon, but a Realist. There has been much jealousy in the Wall Street world, but Carly Fiorina merits a real look. Google her book, "Tough Choices", presentation speech at the bookstore on Flora TV and you'll get a small idea of her talent. As for her severence, I suppose all you lefties if offered it (she didn't design it herself, btw) would just say no...right. Go Carly, first female President of the USA!

Posted by: John N Turner on 06/18/08 at 11:41 PM Respond

Came from former monopoly AT&T on some coattails, I believe. HP wanted to show that it was progressive enough to hire a woman CEO so they chose someone anyone who came from from the VP ranks. Compaq grew HP market share but not profitability or cutting edge technology. If McCain is about ad lib management, mass layoffs, negative shareholder value, and not admitting mistakes, then he found the right person.

Posted by: Frank on 07/14/08 at 10:14 AM Respond

Well, I found a liberal outpost. I must bookmark this and watch to see if this is just a meeting place for partisan hacks.
On Carly:
Many, many, analysts and business professionals have now admitted they were wrong about Fiorina. Now they are heralding her time and moves with HP as brilliant, crediting her and saying HP/Compaq is a great company.
Want to hear what she went through? There is a great entrepreneurial podcast with her speaking. Just go to iTunes and type "Carly Fiorina" in the search bar. Unless you are so blinded by partisanship you can't bring yourself to learn something by listen to an opposing view. But really, she speaks more to the challenges for women in the executive world than on policy. Additionally, she avoids the "I was so picked on I couldn't make it" talk you hear from left-wing women, ala Hillary Clinton.
(Don't you liberals ever get tired of that diatribe?)

Posted by: Bignumone on 07/15/08 at 5:37 AM Respond

Here is another instance where McCain's judgment is in question. Why would he appoint someone of Fiorina's calibre and character when there are business persons of integrity, vision, and reputation out there who actually understand (at least some sectors of the) economy? I doubt this man is capable of running this country; actually, I question his judgment on his choices of lieutenants to whom he would delegate the management of the country's business. McCain lacks an incisive mind or the vigor to bring us out of the terrible circumstances eight years of the Bush administration has placed us in. He is unimaginative, lacks vision, freshness, or a viable plan for improving the country's outlook for the future. He should go and take Fiorina with him - but of course he won't!

Posted by: sboyd18 on 07/15/08 at 9:46 AM Respond

Yeah, Carly the successful savior of HP (to let you tell it). If she was so great, why did the HP board give her 'walking papers'? Damn right, I would have taken 21M to leave. That doesn't make for a competent executive, though. Success is in a long-term tenure with positive growth and the rewarding of employees for their achievements. You don't use people as fodder to reduce expenses when you are buying a jet for your use at the same time. Regardless of how you may feel, you do not make for a consensus, and the consensus in the business world is that Fiorina was not an able executive.

Posted by: sboyd18 on 07/15/08 at 10:10 AM Respond

Hey, BIGNUMONE, rather than lob idiotic insults, try backing up your words with some facts. Like the sources for your fictional statement that "many, many, analysts and business professionals have now admitted they were wrong about Fiorina. Now they are heralding her time and moves with HP as brilliant, crediting her and saying HP/Compaq is a great company." WHAT PLANET ARE YOU ON??? I can't seem to locate your all-star roster of "many, many" experts who are suddenly rasing a toast to the deposed Carly Fiorina. The only people calling her brilliant (aside from herself) are McCain insiders and right wing hacks. There are precious few reputable business analysts or publications agreeing with your statements. Reality is not on your side here. Shareholders don't back you up. The current status of the company doesn't back you up. HPs stock value doesn't back you up. Wall Street doesn't back you up. I know it's a tried and true tactic of those on the Right to just make stuff up, but this is a Mother Jones forum, not the National Review. Keep your fictional accounts of Carly Fiorina where they belong, in the fantasy fiction setting of your local GOP book store.

Posted by: Ron H. on 07/17/08 at 2:37 PM Respond

Carly Fiorina is perfect for McBush she is an underachieving self promoter just like him. She has no economic background besides cutting HP stock by 50%. She had HP buyout Compaq at the worse possible time just to increase her golden parachute for her unceremonious departure from her ivory tower.

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Posted by: hekimboard on 08/02/08 at 2:36 AM Respond

Here is another instance where McCain's judgment is in question.

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