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September 06, 2001 - Image 8

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The Michigan Daily, 2001-09-06

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8A - The Michigan Daily - Thursday, September 6, 2001 BUSINESS
Ford files countersuit in case alleging discrimination

4

DETROIT (AP) - Ford Motor Co. yesterday
filed a countersuit against an employee who in a
lawsuit against the automaker alleges reverse
discrimination.
In its complaint, Ford says John Kovacs vio-
lated his signed employment agreement by
removing and disclosing confidential company
documents.
Kovacs, who is white, is suing Ford in Wayne
County Circuit Court, charging that he was
passed over for promotions in favor of women
and minority candidates.
He was suspended April 9 from his manage-
ment position in the Ford Motor Credit human

resources department after his lawyer, James
Fett, sent a letter on his behalf to chairman
William Clay Ford Jr. asking him to end the
company's diversity hiring measures.
Attached to the letter were several internal
documents including minutes of confidential
human resources committee meetings and lists
of employees being considered for promotions
or transfers.
Ford is not asking for monetary damages in
its countersuit or for Kovacs to be fired. Kovacs
has been transferred to the company library.
"We're asking the court to require him to
return all materials to his employer and to

restrain him as well as his attorneys or represen-
tatives from using the confidential and propri-
etary information in any way," said Ford
attorney Norman Lippitt.
But Kovacs' lawyer says his client, as a
human resources manager, had access to the
documents and the right to distribute them
within the context of his lawsuit.
"You have the privilege as a civil rights com-
plainant to gather evidence of discrimination,"
Fett said. "This is Bill Ford's way of shooting
the messenger."
Lippitt cited a 1998 federal appeals case,
Kemcke v. Monsanto, where the panel of judges

ruled that an employee loses that privilege if
documents are received improperly or stolen.
In that case, the plaintiff was fired when he
refused to return documents he believed showed
a pattern of age discrimination against him and
other employees.
Fett, however, says his client did not steal the
documents.
"If he had really done what they said, would-
n't they have fired him already?" Fett said.
Ford spokeswoman Anne Gattari said Kovacs
was not fired "because we did not want to
deprive him of making a living."
Kovacs was not immediately available for

comment, and Fett said he had not spoken with
him yesterday. But, Fett said: "He's not going to
be intimidated by this (countersuit). He sees it{
for what it is, a public relations ploy."
Ford already faces two class action lawsuits
and one individual suit filed by current and for-
mer employees who say they were denied pro-
motions or were terminated because of their age
or for being white males.
In July, Ford said it would discontinue its 18-
month old system of evaluating approximately
18,000 managers.
Under the Performance Management Process
employees were graded A, B, or C.

I

HP-Compaq merger faces stiff opposition
from shareholders; stock prices fall again

I

The Los Angeles Times ,
Shareholders of Hewlett-Packard Co. and takeover
target Compaq Computer Corp. are so displeased
with the planned acquisition that they might take the
extreme step of rejecting the deal, investors and
observers said yesterday.
Stock in both companies fell for the second day
since the deal was announced, with HP declining 66
cents yesterday to $18.21 and Compaq dropping 67
cents to $10.41.
HP has now lost 22 percent of its value since
announcing it would buy rival computer maker Com-
paq for $25 billion in HP stock. Compaq's shares are
off more than 16 percent. The proposed deal is now
worth less than $20 billion.
"Most people who are against the deal are voting
with their feet" by selling their shares, said HP
investor Thomas Rath of Safeco Asset Management
Co. in Seattle. "We don't like what it does to the busi-
ness mix."
Compaq is already unprofitable in the PC business
and the company is losing ground to market leader
Dell Computer. Analysts also complain that it could
take two years of cost-cutting and reorganization
before HP shows any benefit from the deal.

The HP-Compaq deal does not have a minimum
price, or "collar," where either party can walk away if
the shares continue to fall. The terms call for each
Compaq share to be exchanged for 0.6325 shares of
HP.
But if either company changes its mind about the
merger they must pay the other $675 million.
"There is an outside possibility that unless both
companies are able to articulate the story better and
convince the investment community," a majority of
shares will be voted against the transaction, said chief
investment officer David Katz of Matix Asset Advisors
in New York. That company owns 960,000 Compaq
shares and 444,000 HP shares and opposes the deal.
Ordinarily, even shareholders who don't like the
terms of an acquisition vote to approve it, especially
when no other deal is on the table.
Five years ago, Kansas City Power & Light Co.
shareholders rejected the company's plan for a friend-
ly merger with UtiliCorp United Inc.
And last year, Crown Central Petroleum sharehold-
ers rejected a proposed takeover of Crown by Rose-
more Inc., though a higher offer was in the wings.
After a deal is announced, some long-term
investors sell to arbitrageurs, who take the small risk

that the deal won't close and generally root for the
takeover.
And a stock price drop after a planned merger's
announcement may be only partially due to disagree-
ments on the deal's benefits. The rest of the decline
may be due to investors digesting the outlook by the
two managements that led them to approve the union,
said Stanford University law professor Joseph Grund-
fest.
If a takeover does fall apart, typically only the first
piece of the stock decline is reversible, Grundfest
said.
But a continuing decline in market value can be
too big to ignore.
That happened last year when HP was in talks to
acquire the consulting business of PricewaterhouseC-
oopers for more than $17 billion. HP shares sank so
much on news of the discussions that HP walked
away. The two companies hope to close the deal in
the first half of next year. By then investors may view
the unpopular merger as their last and best hope.
HP Chief Executive Carly Fiorina spoke at an
investor conference in Boston on Wednesday and will
continue making the rounds to shore up support for
buying Compaq.

Financial services feeling effects of slowdown

Newsday
Two thousand here. Four thousand
there. People in financial services aren't
just dropping like flies - but like
whole squadrons. Look at the compa-
nies that have announced - or
increased the number of - job cuts
recently: American Express, 5,000; J.P.
Morgan/Chase, 8,000; Citigroup,
4,700. That doesn't count the dribs and
drabs of layoffs and buyouts at small
companies.
But the consoling news is that the
unemployment rate is still low - and
that-people are still getting jobs. That's

what you need to focus on - that and
all the resources available to help, not
on all that competition for jobs.
This according to Kate Wendleton,
president of the New York City-based
job-search group the Five O'Clock
Club (www.fiveoclockclub.com). The
number of financial services types in
her groups, both virtual and face-to-
face, may have increased 30 percent
this year, but on average, they're get-
ting jobs in 10 weeks, many with raises
to boot. Still, people are pretty "pan-
icky," she says.
Rick Carpenter of East Northport,
N.Y., got his walking papers in June'

from Citibank, where he was a vice
president of strategy for Latin America.
He sees the many job-listing Web sites
as the "passive" route. "I went into
warfare mode," he says of the more
active approach, networking. "I even
got my 80-year-old aunt to network for
me at a function with a bank chief
operating officer."
A good networking resource, of
course, is your professional associa-
tion. And it's never too late to join. The
number of attendees at the Financial
Women's Association of New York's
summer networking dinner doubled
from last year to 100, says Betsy Wer-

ley, president. The group
(www.fwa.org) has about 80 pending
prospects for membership, many of
them out of work or worried by the
possibility, all looking "to build a net-
work in a hurry," she says.
Membership is increasing, too, in the 4
Financial Executives Networking Group
(www.thefeng.org), which sends regular
job-lead e-mails to its constituents - all
in the finance, accounting, controller
areas - who make $100,000 and up.
The New York City chapter is looking
for a larger conference room, to accom-
modate the 30 or so people showing up
at meetings.

4

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