Tuesday, September 04, 2001

HP to buy Compaq for $25B in stock - Sep. 4, 2001

This is the most important sentence in the whole story:

"The companies said the merger is expected to eventually save $2.5 billion a year, and an HP spokesman said that the merger will lead to the elimination of about 15,000 jobs."

That's 15,000 more people on the unemployment line. How much do you want to bet there aren't many management types in that group? The computer/tech industry is like the auto industry in the late seventies and early eighties - dropping workers like flies, increasing automation in the manufacturing process, and merging with other companies in a desperate attempt to stay afloat. I don't blame HP or Compaq for the lost jobs, because it's an industry-wide (and economy-wide) problem. It's funny how Alan Greenspan and his cronies at the Fed believe that if they keep lowering the prime rate a quarter-point every two weeks, the economy will turn around. Sorry, Alan, I ain't buying it.


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