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UK’s Ed Milliband calls for clamp-down on ‘predatory corporate practices’ – Hewlett-Packard implicated in news media

Issue #1119 – The UK’s BBC aired a news item this lunchtime, as a follow-up to yesterday’s speech by UK Leader of the Opposition, Ed Miliband, not only echoing some of the principles written in the previous TCPglobal article, , but actually playing a clip from an interview with the current boss of the UK’s Autonomy Corporation and making specific reference to ‘American company Hewlett-Packard’.

Well, “blow me down with a feather”! Just as I was wrapping up that previous article, this news item came on the BBC radio quoting Ed Miliband as calling for a new capitalist system that would “… reward hard workers and producers in business and not asset-stripping ‘predators’”. I listened intently while trying to continue wrapping up the article and was amazed at what I heard.

His argument is that there is a good capitalism and a bad capitalism, with some companies being producers while others are predators.

Ed MilibandEd Miliband

Ed Miliband – “Let me tell you what the 21st Century choice is. Are you on the side of the wealth-creators or the asset-strippers? The producers or the predators? Producers train, invest, invent and sell. Things Britain does brilliantly. Predators are just interested in the fast buck, taking what they can out of the business. This isn’t about one industry that’s good and another that isn’t, or one firm always destined to be a predator and another to be a producer, it’s about different ways of doing business – ways that the rules of our economy can favour or discourage. Look at what a private equity firm did to Southern Care Homes.”

Mr Miliband thinks that predators should be taxed more than producers.

Here are just a few sound-bites from the radio discussion:

Will Hutton – Chair of the Big Innovation Centre at the Work Foundation indicates that he agrees with Ed Miliband but does not like the term ‘predator’.

“Companies get themselves into monopoly situations; they rig markets; they don’t innovate; they run out of steam; and they sometimes use their political influence to sustain their position.”

Businesses he has spoken to in the last 24 hours indicate “… that businesses need to be held to higher standards, that long-termism and stewarding your people, committing yourselves to innovation is actually the best business model to have.”

Dr Mike Lynch OBEDr Mike Lynch OBE

Dr Michael Lynch OBE – Chief Executive of Autonomy Corporation was quoted from a news broadcast this morning, “You can’t help but like the idealism in the speech but the reality is that it’s not like a Saturday morning cowboy matinee where they’ve got the guys in the black hats and the white hats – and how do you tell them apart?”

Will Hutton – “I know Mike Lynch quite well … he didn’t want his company, Autonomy, to be taken over by Hewlett-Packard recently … and he’s got a very good price for his company. He thinks that … actually the rules by which British companies are themselves the subject of predators, like Hewlett-Packard, from overseas, are far too easy going.”

“It’s not really saying that one company is ‘bad’, a predator …”

Miles Templeman – Director General of the Institute of Directors refuted much of what Will Hutton said but agrees “… with Will about standards and innovation and what makes great companies but to try and distinguish those that are seen to be bad … and predators … is nonsense really, you just can’t do it. The market place will distinguish, customers will choose companies that ‘do the right things, have a good reputation’. The idea of asset-stripping is just silly.”

Will Hutton – “We’ve got to lift our game … it was bad capitalism that got us into this mess and it will be good capitalism that gets us out. I think that word, predator, has made a lot of the business community resile [shrink back; recoil] but actually underneath it, I think, does lie a message which I think it is worth the business community engaging with.”

There is a whole lot more, including several responses from members of the public [listeners] – listen to the whole item Predators/Producers radio discussion (with music interludes edited out!).

A listener says – “Without morals and values, we’ve got nothing! We realised that values, morals and service was the real top end of what people want”

So, Hewlett-Packard is implicated, with the suggestion that it is a predator. It would be my view that Hewlett-Packard is a strong producer, perhaps with predatory inclinations. Much of the distinction is down to the individual at the helm at the time but it is certainly true that Hewlett-Packard has acquired many companies over the years and it does seem that there have been elements of predatory behaviour, particularly in the case of EDS.

What I firmly believe now is that Hewlett-Packard has to get back to basics, back to the values and morals it was created with and show the world that it is “stewarding its people”, training and committing to innovation.

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