Secretly, executives at Dell must have been hoping for more. Dell is suffering from continuing price pressure on its products, while HP has seen something of a renaissance. For example, Dell’s profits in the third quarter were just half the level recorded a year earlier. But then, just as the runes seemed to be with HP, scandal struck. First there were leaks, with secret information finding its way into the hands of the press. Then the investigators employed a tactic known as pretexting, by impersonating the people they were investigating to gain information. The company’s chair got the blame, and lost her job, and yet the company’s share price has hardly budged.
Yesterday, HP’s chief executive, Mark Hurd, and former chairperson Patricia Dunn appeared before the U.S. House Energy and Commerce Committee.
It was a grilling, with congressman John Dingell describing the investigation as “a plumbers’ operation that could make Richard Nixon blush if he were still alive. And yet, the share price went up.
It all comes down to Mr Hurd. He has been doing good work at HP but any hint he is embroiled in the affair, and markets could take fright.
Yesterday, he came out smelling of roses. He was humble, took responsibility when few believed it was his fault, referred to Churchill when he said of the affair it was “not my finest hour” and said: “I take full responsibility and these are the steps we are taking to fix things.” He added: “If Bill Hewlett and Dave Packard were alive today they would be appalled.” And, with that magnanimous statement, Mr Hurd, who apparently had very little to do with the investigation, walked away. It appears, he is off the hook.
Ms Dunn, who oversaw the investigation was not so lucky. She said she was not responsible, and did not know ‘pretexting’ techniques were employed. Ms Dunn said: “My understanding was that these records were publicly available.” To which Rep. Greg Walden replied: “You really believe that…you honestly believe it was that simple?”
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