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Agilent directors speak up for Hewlett
By Mike Tarsala, CBS.MarketWatch.com
Last Update: 3:00 AM ET Feb. 17, 2002


PALO ALTO, Calif. (CBS.MW) - Two board members at Agilent Technologies,
Hewlett-Packard's largest spinoff, tell a very different story about the
industry knowledge and credibility of dissident board member Walter Hewlett
than H-P's management.

Far from being the "musician and academic" with no business credentials that
H-P management makes him out to be, the son of the co-founder of H-P is a
forward-looking executive who's not afraid to make radical changes if they
help the company, according to Agilent Chairman Gerald Grinstein and board
member Jim Cullen. Walter Hewlett is also on the Agilent board.

"He's been painted as a guy who hangs on to the H-P past," Grinstein said in
an interview. "But my experience is exactly the reverse. Does he function as
a contributing and insightful board member versus some kind of wacko who
would rather be playing a zither in the meadow? He's a good board member."

Walter Hewlett's qualifications have become a big focus of H-P management in
its increasingly hostile proxy battle with him over its planned $22 billion
takeover of Compaq Computer. H-P shareholders are scheduled to vote on the
deal on March 19 and the next four weeks will see an escalation of
advertising and public relations campaigns from both sides trying to
discredit each other.

H-P Chief Executive Carly Fiorina has called Hewlett a "decent man" who has
the right to his opinion. But in statements, H-P has suggested that
shareholders should disregard much of Hewlett's conclusions on why the Compaq
merger won't work, based in part on his lack of understanding about H-P and
the technology industry.

"Mr. Hewlett does not understand the linkages between our businesses and the
importance of profitability, growth and market leadership in our industry,"
H-P's management wrote in a recent statement to shareholders.

Agilent Technologies, the $12.6 billion analysis equipment maker H-P spun off
in 1999, counts H-P among its top five customers, with as much as 7 percent
of Agilent's (A: news, chart) sales coming from chips used in H-P (HWP: news,
chart) printers, scanners and computers.

And since Agilent was once part of H-P, thousands of its employees still live
by the "H-P Way", the set of corporate values spelled out by William Hewlett
and David Packard, H-P founders.

Grinstein said he's not a personal friend of Hewlett's. But the two have
shared a board table since the founding days of Agilent, and Grinstein said
he walks the halls of the company with Hewlett often.

Without saying whether or not he supports the H-P/Compaq merger, Grinstein
expressed disappointment with detractors who say Hewlett opposes H-P's merger
plan due to his limited technological knowledge, including claims that he
doesn't even use e-mail.

"Walter gets the technology, and he can question and discuss it a hell of a
lot better than I can," Grinstein said, noting that he often emails back and
forth with Hewlett.

When Agilent reached a decision to sell off its health care solutions
business to Philips Medical Systems in August 2001 because it didn't fit in
with the company's other business groups, Hewlett took an active role in the
talks, Grinstein said.

"He could see it was a diversion from the other things we should be doing,
even though it was a business that Bill and Dave had built up," Grinstein
said. "He was perfectly ready to sell it and refocus in other areas. The
picture you get of Walter is that he's a mammoth frozen in time," Grinstein
said. "That's not the case."

Hewlett "follows every word of the discussion" in the boardroom, said Cullen,
another Agilent board member, who is a retired president and chief operating
officer of Bell Atlantic Corp.

Cullen said that Hewlett is active at Agilent -- and not only in namesake. He
attends all board meetings, he says.

"When I first met Walter, I thought he was here because of his last name,"
Cullen said. "But ... he's a knowledgeable observer of what's happening in
the industry and in the business. He hasn't run a division of Lucent (as
Fiorina has), but I don't know that his views should be relegated to second
place."

Hewlett probably would not have been named to H-P's board continually for the
past 15 years if he was not the second son of one of the company's founders,
Cullen admitted.

He says, however, that Hewlett is "certainly not a weak link."

"You didn't hear any of them (at H-P) saying we have a weak board member here
until any of these merger issues came up," Cullen said.

Cullen acknowledged that he had a few reservations about Hewlett before he
met him. Cullen feared that Hewlett might be a stumbling block in
decision-making - that he may argue with majority decisions just because,
"that's not the way we used to do it."

"But there are zero references to the good old days, " Cullen said. "You'll
never hear him talk about how great it used to be. You'll never hear him
talking about his father."

"The H-P people are saying that Walter is not a business person," Cullen
said. "Walter is an very intelligent business person. He has a lot of
experience, especially at H-P."

Mike Tarsala is a San Francisco-based reporter for CBS.MarketWatch.com.

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Wirt Atmar

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