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Whitman Expected to Be Named at H.P.

September 22, 2011 by Leave a Comment

The decision to replace Léo Apotheker, the company’s chief executive, after only 11 months on the job is all but made, lacking only a final vote, said the person, who is not authorized to speak for the board. While Mr. Apotheker is going, his strategy, including consideration of spinning off H.P.’s personal computer business from other parts of the company, will remain in place.

Ms. Whitman is also a member of the H.P. board. According to a person with knowledge of the board’s decision, she was chosen for her track record of successfully managing a large, complex business, her communications skills both internally and with Wall Street and her ability to lead senior executives through corporate transitions.

All of these were seen as Mr. Apotheker’s shortcomings. While the board liked his plan to move H.P. to a business with more software and services, H.P.’s poor earnings, and unhappiness with Mr. Apotheker by some members of the company’s powerful executive committee ultimately spelled his downfall, the person close to the board said.Hewlett-Packard’s stock has declined more than 50 percent from its 52-week high, but rose almost 7 percent on Wednesday on reports that Mr. Apotheker faced dismissal. The shares were down 4 percent Thursday in a general sell-off on Wall Street.

Ms. Whitman might not unwind much of Mr. Apotheker’s strategy of moving Hewlett-Packard toward becoming more of a software services company in the mold of I.B.M. or SAP. Although H.P.’s board is comfortable with the strategy laid out last month by Mr. Apotheker, its members questioned about his ability to communicate that strategy within the company and to outsiders, especially investors.

Although Ms. Whitman lacks experience running a complex technology company that sells to consumers as well as corporate customers. the company’s board considers her communications skills and understanding of customers to be her strongest qualifications for the job, according to a person with knowledge of discussions among directors, but who is not authorized to speak for the board.

Ms. Whitman, who ran eBay as it grew from a start-up to a major online retailer, left the company just as growth began to stall. She unsuccessfully ran for governor of California and was hired in March by Kleiner Perkins Caufield Byers, a venture capital firm, as a strategic adviser. She has been a member of the H.P. board since January.

One of the other directors who had been recently appointed to the board and who was considered an ally of Mr. Apotheker resigned from the board earlier this month. The company did not announce it, but reported it on Page 93 of a filing to the Securities and Exchange Commission that on September 8, Dominique Senequier, chief executive officer of AXA Private Equity, stepped down because of “other professional commitments.”

She only joined the board in January, with four other new members including Ms. Whitman. At the time, some corporate governance groups criticized the board appointments as an attempt by Mr. Apotheker to add allies to the board.

The company said in it filing that Ms. Senequier is expected to continue to serve as a director of H.P. until its next annual meeting of stockholders, in March.

H.P.’s board has for some time wondered whether businesses like PCs should even coexist alongside those like large-scale corporate computing. Mr. Apotheker’s response was to take the company into higher-value software and services.

Mr. Apotheker’s goals for H.P. were clear from the start, but in almost a year his strategy never quite took shape. He was named to head H.P. on Sept. 30, and the next day declared that software was the “glue” that held H.P. together, a comment that surprised observers because it suggested that H.P. might start to resemble SAP. In the most recent quarter, software accounted for just 2 percent of Hewlett-Packard’s total revenue.

Mr. Apotheker made a series of announcements last month that had the board’s blessing, but surprised and upset investors. He said H.P. was paying $11.7 billion in cash for Autonomy, a British software company. a deal that analysts immediately branded as overpriced. He announced the discontinuation of its TouchPad tablet that had been introduced only weeks before. He also said the company was considering the possible sale or spinoff of H.P.’s mainstay PC business. The stock lost about a quarter of its value on the news.

This article has been revised to reflect the following correction:

Correction: September 22, 2011

An earlier version of the capsule summary for this article misstated Ms. Whitman’s given name as Angela. As the article and picture caption correctly note, it is Meg.

Article source: http://www.nytimes.com/2011/09/23/technology/whitman-expected-to-be-named-at-hp.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Percentage of Americans Living in Poverty Rises to Highest Level Since 1993

September 14, 2011 by Leave a Comment

And in new signs of distress among the middle class, median household incomes fell last year to levels last seen in 1997.

Economists pointed to a telling statistic: It was the first time since the Great Depression that median household income, adjusted for inflation, had not risen over such a long period, said Lawrence Katz, an economics professor at Harvard.

“This is truly a lost decade,” Mr. Katz said. “We think of America as a place where every generation is doing better, but we’re looking at a period when the median family is in worse shape than it was in the late 1990s.”

The bureau’s findings were worse than many economists expected, and brought into sharp relief the toll the past decade — including the painful declines of the financial crisis and recession —had taken on Americans at the middle and lower parts of the income ladder. It is also fresh evidence that the disappointing economic recovery has done nothing for the country’s poorest citizens.

The report said the percentage of Americans living below the poverty line last year, 15.1 percent, was the highest level since 1993. (The poverty line in 2010 for a family of four was $22,314.)

The report comes as President Obama gears up to try to pass a jobs bill, and analysts said the bleak numbers could help him make his case for urgency. But they could also be used against him by Republican opponents seeking to highlight economic shortcomings on his watch.

“This is one more piece of bad news on the economy,” said Ron Haskins, a director of the Center on Children and Families at the Brookings Institution. “This will be another cross to bear by the administration.”

The past decade was also marked by a growing gap between the very top and very bottom of the income ladder. Median household income for the bottom tenth of the income spectrum fell by 12 percent from a peak in 1999, while the top 90th percentile dropped by just 1.5 percent. Overall, median household income adjusted for inflation declined by 2.3 percent in 2010 from the previous year, to $49,445. That was 7 percent less than the peak of $53,252 in 1999. Part of the income decline over time is because of the smaller size of the American family.

This year is not likely to be any better, economists said. Stimulus money has largely ended, and state and local governments have made deep cuts to staff and to budgets for social programs, both likely to move economically fragile families closer to poverty.

Minorities were hit hardest. Blacks experienced the highest poverty rate, at 27 percent, up from 25 percent in 2009, and Hispanics rose to 26 percent from 25 percent. For whites, 9.9 percent lived in poverty, up from 9.4 percent in 2009. Asians were unchanged at 12.1 percent.

An analysis by the Brookings Institution estimated that at the current rate, the recession will have added nearly 10 million people to the ranks of the poor by the middle of the decade.

Joblessness was the main culprit pushing more Americans into poverty, economists said.

Last year, about 48 million people ages 18 to 64 did not work even one week out of the year, up from 45 million in 2009, said Trudi Renwick, a Census official.

“Once you’ve been out of work for a long time, it’s a very difficult road to get back,” Mr. Katz said.

Median income fell across all working-age categories, but was sharpest drop was among the young working Americans, ages 15 to 24, who experienced a decline of 9 percent.

According to the Census figures, the median annual income for a male full-time, year-round worker in 2010 — $47,715 — was virtually unchanged, in 2010 dollars, from its level in 1973, when it was $49,065, said Sheldon Danziger, professor of public policy at the University of Michigan.

Those who do not have college degrees were particularly hard hit, he said. “The median, full-time male worker has made no progress on average,” Mr. Danziger said.

This article has been revised to reflect the following correction:

Correction: September 13, 2011

An earlier version of this article gave an incorrect figure for the number of people the Census Bureau found to be in poverty in the Unites States. The number is 46.2 million people, not 56.2 million.

Article source: http://feeds.nytimes.com/click.phdo?i=4173a87f45ab05b399c5ba5c7692b664

Filed Under: Economy News Tagged With: ,

Germany Dims Nuclear Plants, but Hopes to Keep Lights On

August 30, 2011 by Leave a Comment

Nuclear plants have long generated nearly a quarter of Germany’s electricity. But after the tsunami and earthquake that sent radiation spewing from Fukushima, half a world away, the government disconnected the 8 oldest of Germany’s 17 reactors — including the two in this drab factory town — within days. Three months later, with a new plan to power the country without nuclear energy and a growing reliance on renewable energy, Parliament voted to close them permanently. There are plans to retire the remaining nine reactors by 2022.

As a result, electricity producers are scrambling to ensure an adequate supply. Customers and companies are nervous about whether their lights and assembly lines will stay up and running this winter. Economists and politicians argue over how much prices will rise.

“It’s easy to say, ‘Let’s just go for renewables,’ and I’m quite sure we can someday do without nuclear, but this is too abrupt,” said Joachim Knebel, chief scientist at Germany’s prestigious Karlsruhe Institute of Technology. He characterized the government’s shutdown decision as “emotional” and pointed out that on most days, Germany has survived this experiment only by importing electricity from neighboring France and the Czech Republic, which generate much of their power with nuclear reactors.

Then there are real concerns that the plan will jettison efforts to rein in manmade global warming, since whatever nuclear energy’s shortcomings, it is low in emissions. If Germany, the world’s fourth-largest economy, falls back on dirty coal-burning plants or uncertain supplies of natural gas from Russia, isn’t it trading a potential risk for a real one?

The world is watching Germany’s extreme energy makeover, as politicians from New York to Rome have floated their own plans to shut or shelve reactors.

The International Energy Agency, generally a fan of Germany’s green-leaning energy policy, has been critical. Laszlo Varro, head of the agency’s gas, coal and power markets division, called the plan “very, very ambitious, though it is not impossible, since Germany is rich and technically sophisticated.”

Even if Germany succeeds in producing the electricity it needs, “the nuclear moratorium is very bad news in terms of climate policy,” Mr. Varro said. “We are not far from losing that battle, and losing nuclear makes that unnecessarily difficult.”

The government counters that it is prepared to make huge investments in improving energy efficiency in homes and factories as well as in new clean power sources and transmission lines. So far, there have been no blackouts.

But Jürgen Grossmann, chief executive of the German energy giant RWE, which owns two closed reactors here in Biblis, about 40 miles south of Frankfurt, expressed skepticism. “Germany, in a very rash decision, decided to experiment on ourselves,” he said. “The politics are overruling the technical arguments.”

The Nuclear Equation

Germany’s planners believed they could forgo nuclear energy in large part because of the country’s remarkable progress in renewable energy, which now accounts for 17 percent of its electricity output, a number the government estimates will double in 10 years. On days when the offshore wind turbines spin full tilt, Germany produces more electricity from renewable sources than it uses, according to European energy monitors.

Germany has “exceeded everyone’s expectations on renewable power,” said Mr. Varro, showing that it could be cost effective and reliable.

Until it closed the reactors, Germany was Europe’s leading energy exporter.

With a total of 133 gigawatts of installed generating capacity in place at the start of this year, “there was really a huge amount of space to shut off nuclear plants,” Harry Lehmann, a director general of the German Federal Environment Agency and one of Germany’s leading policy makers on energy and environment, said of the road map he helped develop. The country needs about 90.5 gigawatts of generating capacity on hand to fill a typical national demand of about 80 gigawatts a day. So the 25 gigawatts that nuclear power contributed would not be missed — at least within its borders.

To be prudent, the plan calls for the creation of 23 gigawatts of gas- and coal-powered plants by 2020. Why? Because renewable plants don’t produce nearly to capacity if the air is calm or the sky is cloudy, and there is currently limited capacity to store or transport electricity, energy experts say.

New coal and gas plants will use the cleanest technology available and should not aggravate climate change, government officials said, because they will operate within the European carbon-trading system in which plants that exceed the allowed emissions cap have to buy carbon credits from companies whose activities are environmentally beneficial, thus evening out the environmental ledger.

Article source: http://www.nytimes.com/2011/08/30/science/earth/30germany.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,