Day 1 for new HP in Asia

By SONIA KOLESNIKOV, UPI Business Correspondent  |  May 8, 2002 at 6:41 AM
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SINGAPORE, May 8 (UPI) -- To the chant, "we are ready, we are ready," Hewlett Packard's chairwoman and chief executive, Carly Fiorina galvanized employees gathered Tuesday in Palo Alto, Calif., to celebrate HP's completed acquisition of Compaq Computer Corp.

On the other side of the globe, as Asia woke up to Day 1 of the new HP, top executives here were quick to take up the cry.

"The new HP is ready, and the industry is ready for the new HP," Paul Chan, regional managing director for HP Asia Pacific, previously the managing director of Compaq Asia, said Wednesday.

Although not all of Asia is yet integrated (South Korea's merger is still pending clearly regulatory authorities anti-trust issues), HP executives, speaking at a press conference Wednesday, were quick to point that most of the ground work for a successful integration had been done in Asia, with more than 100 employees spending more than 150,00 hours on the issue.

"Unlike other regions, Asia-Pacific is still growing (in term of customers) and our first challenge is to find the balance in adjusting or cost structure," said Adrian Koch, the head of the Personal Systems Group in Asia.

"The essence is speed (for the integration) if we want to take advantage of the economic recovery under way in the region," added Michael Hoffman, head of the Imaging & Printing Group in Asia.

The new HP will consist of four core business operations: the Enterprise Systems Group headed in Asia by Chan, HP Services headed in Asia by Siaou-Sze Lien, the Imaging & Printing Group headed by Hoffman and the Personal Systems Group by Koch.

"I can't wait the next quarter results, when we'll overtake IBM," Hoffman quipped.

Chan said the company had not decided yet on exactly which 15,000 employees worldwide will be laid off in the coming months, out of 145,000 employees.

He said management had been concentrated on the integration process, and had not spent time yet on overlapping employees (in terms of duties). "I think we will have a clear picture by the end of July and will then start the execution (of the retrenchment)," Chan said.

Koch added that the layoffs will be spread out until the end of 2003, and will be decided by divisions, as opposed to countries. In the Asia-Pacific sector, formerly Japan, the new HP has 20,000 employees.

In the last fiscal year (which ends in October for HP and in December for Compaq), the combined revenue of the two companies worldwide was $79.2 billion. Asia ex-Japan represented $7 billion in revenue (including $3 billion for Compaq).

Each top executive is planning to go on a roadshow for the next few weeks to explain to employees and partners the new HP's strategy. "I will also be reviewing our real estate corporate needs within the next 10 days in the region," Chan said. The company is hoping to get cost savings.

Koch outlined product strategy across the range of its hardware and software offerings. The company intends to retain the Compaq's name for a variety of products, especially on the commercial side, because of the strong brand recognition with consumer, he noted.

In the imaging and printing sector, HP hopes to grow its share of the pie. IDC has projected that this sector worldwide could grow to more than $130 billion by 2004.

Hoffman said HP's digital imaging solution raised more than $1 billion in revenue in the last fiscal year in an $18 billion market opportunity. HP's digital publishing solutions comprised a mere $500 million business in a market with $27 billion opportunity, he added.

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