MeasureFor the men and women 01 Hewtett·PlICkard/FEBAUARY 1979

Reducing energy use (pages 2-6)• Reporting to shareholders (pages 8-11)• New Action Factory (pages 12-13)• From the president's desk (page 15)

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It has been more than five years since the Arab oil embargo brought America's cheap­energy joyride to an abrupt halt. Hewlett-Packard's energy consumption has risen only sevenpercent during that time, even though plant space has doubled. An outstanding accomplishment,say the HP energy experts. But they also insist there's much more to be done to squeeze out thatlast measure ofenergy efficiency.

When Mike Fondiller of the Corpo­rate Construction department took on theresponsibility for coordinating HP's en­ergy conservation effort, he thought­understandably-that he should start byfinding out how energy was being used ina typical HP division, and establish somestandards.

What he found, instead, is that there isno "typical" HP division. They're all dif­ferent, at least in terms of energy use.They differ in the types of manufacturingand lab facilities they have, the age anddesign of their heating and air-condi­tioning systems, the extent of their wastetreatment, use of night shifts, and anynumber of other factors. Setting usefulguidelines for conservation turned out tobe a complex task.

Mike also found, however, that all HPdivisions were applying considerable ef­fort and ingenuity to conserving energy.Corporate emphasis seemed to be neededand, in some cases, higher capital budgetsto make changes in existing systems.

Since heating, air-conditioning andlighting account for 75 percent of theenergy used in most plants (production

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requirements take about 25 percent), facil­ities engineers and managers are the cen­tral figures in this effort. We asked themwhat measures they were taking to saveon fuel and electricity, and there weremany common threads in their answers.There were also some out-of-the-ordinarymethods being tried or proposed. But theywere all using considerably less energyper square foot of plant space than thepre-1974 company average.

All plants have widened the comfortrange, wherever possible, for heating andcooling inside air. For an office or produc­tion area the range is typically from 65

Air-conditioning maintenance supervisor AIClark of Microwave Semiconductor Division tellshow heat is recovered and recirculated through

heat exchangers and other innovations in thedivision's new San Jose (California) plant. "With

IC labs, energy conservation is more difficultbecause we have to exhaust such a high

volume of air," he explains.

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Where dOwe gofrom here?

to 78 degrees Fahrenheit (18 to 25Celsius)-that is, no cooling takes placeuntil the temperature exceeds a not-ex­actly-sweltering 78, and no heating above65. Employees may have to compensateby wearing warmer or cooler clothing,but those are fairly comfortable extremesnow that comfort is no longer the onlyconsideration.

Most have also taken a good look attheir lighting and found they could dowith less. Light levels of 70 to 100 foot­candles are considered good these days-even less in aisles and corridors­whereas 120 to 150 was the standard whenenergy was cheap. In some plants almosta third of the overhead lighting has beendisconnected altogether, without affectingoperations, and energy-saving lamps andballasts are now available to replace theconventional fluorescent tubes.

Pinching kilowattsOther remedies for fuelishness are less

obvious-and often rather expensive toimplement. In older buildings the heatingand ventilating systems were never in­tended to be energy efficient, and costlyengineering changes are sometimes re­quired to make them so. Such projectsmust compete for priority with a greatmany other items on the capital equip­ment budgets.

Those projects that are tackled firstare generally the ones with the shortest"payback" time. Why install a solar en­ergy system, for example, which mightsave enough to recover the investment in,say; twenty years, when there are plentyof IC?ss glamorous energy-saving measuresthat could pay for themselves in two orthree years? In Loveland, a chilled watersystem for some of the clean rooms cost$11,000 but is expected to save $3,200 a

year on the plant's utility bills. Modifica­tions to fans and temperature controlscame even higher-$38,000-but the in­vestment is being recovered at the rate of$14,000 a year.

The savings show up on monthly re­ports received in Palo Alto and compiledby Mike Fondiller. On the basis of suchstatistics as kilowatt-hours per squarefoot, Mike is able to rank the savers andthe wasters among HP divisions. Varia­tions in facilities make such judgementsdifficult, but he hopes to fine-tune thedata to yield more information and helphim pinpoint problem areas. "I believewe can reduce our energy consumption byanother 15 percent," he says. "We couldbe saving another two to three milliondollars a year."

One problem frequently mentioned isthe difficulty of convincing people therereally is an energy crisis-rather surpris­ing in view of all that's been written aboutit, and the forecasts of shortages and"brownouts" we may face in the comingdecades. "People would be willing to suf­fer a little discomfort if they were con­vinced there was a crisis," says DonStebbins, Cupertino facilities manager."We don't get much cooperation some­times." Bruce Beletti, a maintenancetechnician in Don's department, sayspeople even accuse him of putting com­puters ahead of people when regulatingthe air conditioning.

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Erik Thoms, facilities engineering manager atHPSA in Geneva, shows how the large boileron the left was replaced by the small unitand heat exchanger in the background, using95 percent less fuel to do the same job.Phenomenal savings have been realized byrecovering heat from the building's computersand improving the flow and regulation of air­conditioning, according to Erik, and solar heatis used for domestic hot water. At Swiss fuelprices, the cost of transforming HP's Europeanheadquarters into an energy-efficient buildinghas paid for itself in three years.

Computer systems do place demandson air conditioners because of the heatthey generate and the need for reasonablyconstant temperatures-particularly discdrives with their close tolerances. Keep­ing them cool can be a problem in a com­pany that's constantly moving thingsaround while also trying to save energy.According to Don, the movement ofcomputers into the new building 47 wasdelayed until the air-conditioning prob­lems could be solved. "Putting in roomsand filling them with computers raiseshavoc with air-conditioning systems," heexplains. In another building his crew de­signed and installed small independentcooling units in some computer rooms inorder to avoid running the building's largechiller for those rooms alone.

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Russel David of Data Systems Division checks the operation of twocross-connected air compressors. After changing to a pressure­sensing system, the second machine is no longer left idling whenonly one is needed. Through the diligence and ingenuity of HP'sbuilding maintenance crews, such small modifications in theoperation of existing equipment are adding up to big savings.

To keep tabs on the peaks and valleysof this profile, a demand monitor wasconnected to an HP recorder, and Joe hascompiled an accurate history of energyuse over more than a year's time. "Therehave been occasions," he says, "when wehave either delayed or avoided turning onequipment so we wouldn't exceed ourdemand for the month." One exotic pro­posal under consideration would makeuse of the division's 200,000-gallon un­derground reservoir for chilled-waterstorage, an attractive proposal becausesome of the load could be shifted to off­peak hours.

A strict energy code was also enactedin Massachusetts last year. Joe reviewedthe plant's lighting and found that 7000lamps could be disconnected. The savingsof 120,000 kilowatt hours per monthbrought the division into compliance, butJoe didn't stop there. As parts of the divi­sion's older structure were renovated,hundreds of energy-saving fixtures wereinstalled in place of older types. A planto cross-connect the heating, ventilatingand air-conditioning systems between thenew and old buildings is also being studied.It would make maximum use of thenewer, more efficient equipment for bothbuildings.

Environmental considerations, thoughthey're also important, often work atcross purposes with energy conservation.Air scrubbers and wastewater treatmentsystems use a lot of energy, and govern­ment safety requirements that prescribe acertain volume of ventilation under labo­ratory hoods result in the removal of a lotof conditioned air from buildings.

On the other hand, the two-yeardrought in the western U.S. broughtabout many water-conservation measuresthat also save energy. Drip irrigation sys­tems, more native landscaping, and suchsimple water-saving techniques as shut­ting off rinse tanks when not needed-allresulted in lower energy bills as well aswater and sewer savings. In the Palo AltoManufacturing Division, Sherm Davisreports that cooling water for the die­casting machines was not only put in aclosed loop, but was run through a heatexchanger to heat domestic hot water,conserving both precious commodities atonce.

Waltham Division's Joe Cerniglia re­ports that electric rates are particularlyhigh in Massachusetts, and a proposedrate structure weighted heavily on usageduring peak times could ultimately in­crease the cost by 30 or 40 percent, de­pending on what he calls the "demandprofile" for the plant.

Some trade-ofts

The older Cupertino buildings aremuch less thrifty than the new ones. Butair-conditioning equipment has been mod­ified to make use of outside air to coolbuildings that have a lot of heat from elec­tronic equipment-instead of using thechillers to cool the warm return air. Whenheat is needed, more of the return air canbe used. Air flows are also modified withthe changes of season now, and a smallboiler installed especially for the LSIcleanroom equipment allows a largeboiler to be shut down during warmweather.

When Marcel Cohen of HP Labs be­came facilities engineering manager forthe Deer Creek laboratory more than ayear ago, he also inherited a facility thatwasn't designed for efficiency. After care­fully studying the original design, he wasable to invest $19,000 in modificationsthat will save twice that amount in the firstyear. Ducting was rerouted so that half ofthe major systems can be shut off at nightand on weekends, letting the other halfserve all the critical cleanroom areas. Thechanges also increased the comfort ofmany employees, since the best way toconserve with the old system was to main­tain a very cold building.

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Cooling water from the huge die-casting ma­chines in this modern Manufacturing Divisionfacility is used to heat domestic hot water forthe entire site. New air-conditioning systemswere also installed in some of the older build­ings, and even with much added space andproduction capacity, the division's energyuse is at 1973 levels.

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Koh Loke Seng writes from Singa­pore to tell us his maintenance crew nowoperates only one of the building's twochillers and one cooling tower at a time,with good results. They also disconnected879 four-tube light fixtures, and foundthey significantly reduced the coolingload as well as the lighting.

Nor should we neglect the salesoffices, which have an impact due to theirlarge automobile fleets as well as theirbuildings. In the Eastern Sales Regionalone, according to ESR's Al Thoburn,over 500 cars are carefully maintained byHP mechanics for optimum performance.

All of these people need our help, andour acceptance of certain measures notonly as desirable for the cost savings, butnecessary to our survival. There really isan energy crisis, and where we go fromhere may depend on how firmly we be­lieve in it. 0

and date back to a miners' strike in 1974.But timers and other controls are gradu­ally being installed for more efficient op­eration, he reports.

In the Stanford plant some savings arerealized by turning artificial lights off al­together in areas with skylights, accord­ing to Jack Reynolds. Temperatures havebeen lowered on domestic hot water sys­tems, and many automatic controls havebeen installed.

From Loveland (Colorado) we learnthat the HP plant there won honorablemention in an energy-conservationawards program sponsored by a Denverassociation of Federal Government execu­tives. The plant is also one of several thatare experimenting with computer systemsfor monitoring and control.

Pulling togetherSuch responses from facilities people

around the company are encouraging, al­though many express the feeling theycould be doing more. Mike Farrell ofSouth Queensferry (Scotland) Divisiontells us that most of the division's savingshave been achieved manually thus far,

It's not unusual in winter to have onebuilding requiring heat and another on thesame site requiring cooling, depending onthe type of facility. Lots of people andequipment may generate too much heat,while cleanroom facilities may exhaustmost of theirs-and getting it from an ar­ea that has too much to another that needsit is usually impossible or impractical.

But Santa Rosa Division has a uniquecentral utility system housed in a separatebuilding, supplying each manufacturingbuilding on the site via an undergrounddistribution system. Facilities engineeringmanager Bill Hollis explains what hap­pens in the winter months: "When chilledwater isn't needed for cooling, the chilledwater supply line is converted to a heatabsorption line. By circulating waterthrough coils and absorbing the excessheat in building 2, then sending thewarmed water to heater coils in heat­deficient building 1, we can conservegreat amounts of energy. We call this a'heat trade'."

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Inenerg~ newer is better

These manufacturing buildings at theCorvallis (Oregon) Division were built to

HP's standard design, and their utilitysystems incorporate many energy-saving

innovations.

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The buildings on HP's Cupertino(California) plant site-some pur­chased and some built by HP-aresaid to use every known principal ofair-conditioning except the ammoniaabsorption method found mostly ondairy farms. Needless to say, this col­lection of mismatched systems hasnever been a model of efficiency.When building 43 was occupied in1977, however, it lowered the averageenergy cost per square foot for the en­tire site rather dramatically.

The reason is that the mechanicaland electrical systems in all of HP'snewer buildings are designed with en­ergy conservation in mind. A specialunit of the Corporate Construction de­partment, called the engineering stan­dards group, now makes most of theenergy-related decisions that used tobe left to outside consultants. Eachtime a plant or office building goes intoservice, first-hand experience is gainedon how to save fuel and electricity."Some things look good on paper,"says the department's Jim Pettegrew,"but then they don't work so well inpractice. "

Although the corporation hasadopted a single prototype building de­sign for plants in the western U.S.,every site's energy needs are unique.The Boise (Idaho) location illustratesthe range of requirements, with thefirst of its three modern buildingsbeing a "normal" manufacturing facil­ity, the second having a large amountof cleanroom space, and the third witha concentration of fabrication areas.Each has different problems of heattransfer and ventilation. But experi­ence over the past five years in Boiseand elsewhere has led the companyto adopt a few more-or-less standarddesigns.

For one thing, all new HP build­ings have variable-volume fans, amarked improvement over older sys-

tems that blew a constant volume ofair. Now the temperature can be par­tially controlled by the amount of airbeing moved (except in facilities suchas IC labs which must have a constantpressure), whereas older systems re­quire some of the chilled air to be re­heated, and use up to seven times asmuch energy.

Refrigeration units have also beenscaled down, according to Jim. Insteadof one large chiller, which might runinefficiently much of the time, a facil­ity may have two or three smaller onesthat can be shut down when they're notneeded.

Water used to cool equipment suchas die-casting and plastic molding ma­chines is now put in a closed loop, andcirculated through a cooling towerrather than a chiller. Undergroundchilled-water storage has also been thesubject of a great deal of study, and thefirst such system in the company isplanned for the new addition to theSunnyvale (California) site. Its princi­pal advantage is that chillers can be runduring off-peak hours when rates arelower, as well as making some use ofthe cooler night air. That water canthen be used for cooling during theday. As in other plant expansion proj­ects, the Sunnyvale construction pre­sents an opportunity to tie in the olderbuilding as well, and make the entirefacility more energy-efficient.

Sometime in the future, automatic

monitoring and control of utility sys­tems will also be standardized, usingHP data acquisition and computingequipment. It's an area that's beingstudied, according to Jim. Where timeclocks and manual controls arepresently used, the ultimate systemwill have a network of sensors and acomputing controller programmedwith all the parameters for efficientoperation.

Lighting equipment in newer build­ings consumes 2 watts of power persquare foot, compared with a pre-1974standard of 4 watts, according to LloydMuegge, also a member of the stan­dards group. In addition, much of theheat from the newer types of fixturesescapes above the ceiling instead ofbeing radiated into the room, and iscarried out by exhaust fans. Anotherobjective is to make the circuitry flexi­ble enough that a division can tailor itslighting to its own requirements, andturn off what isn't needed.

Although conserving the world'sdwindling supply of fuel is importantin its own right, corporations must alsobase their decisions related to energyon sound business practices. Jim Pet­tegrew, studying a computer printout,finds that a heat recovery coil beingconsidered for use in a fume exhaustsystem will pay for itself in 4.9 years."Now I have to decide if the thing willreally last fi ve years," he says. 0

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Harold Buttnerdies at age 86

Harold Buttner, long a friend ofHewlett-Packard and a member of itsboard of directors from 1957 to 1970, diedon January 12. He was 86. His interestin HP and involvement as directoremeritus continued until his death in aBridgeport, Connecticut hospital.

Harold came to know Bill Hewlett andDave Packard very early in their partner­ship. His position at International Tele­phone and Telegraph Corporation, fromwhich he retired as vice president ofR&D, provided many invaluable contactsand associations. It was, however, for hispersonal warmth and wit and energy thathis many friends in the company will re­member Harold Buttner. His passing wassudden and peaceful.

Bill Hewlett doing wellafter heart attack

Bill Hewlett has returned to Palo Altofor a period of convalescence following aheart attack that hospitalized him in SunValley, Idaho, on January 19. At presstime he was reported in very good spiritsand hopeful of a rapid recovery.

The attack occurred during a banquetin Sun Valley, his winter home. Bill hadflown to Sun Valley from Palo Alto thatafternoon after attending a meeting of theboard of directors. Bill retired from full­time management last May, but remainsas a director and chairman of the Execu­tive Committee.

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Reporting toHPshareholders:

Beyond the bottom line...

Getting the Hewlett-Packard annual report into the hands of shareholders, including some16,000 who are HP employees, takes the combined effort of a number of people at Corporateheadquarters in Palo Alto and every accounting department throughout the world.

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The man with the final word on HP's financial numbers is Vice President and TreasurerEd van Bronkhorst (center), pausing here to talk with New York City securities analystRobert Christensen after HP's meeting for financial analysts in Cupertino last month.

As some 16,000 HP employee­shareholders settle down to read thisyear's annual report mailed on January12, they're on the receiving end of acompany-wide effort to put significantfinancial and operating data into theirhands. Along with more than 10,000 otherHP shareholders, they'll have a sizableamount of reading matter to absorb.

The annual report is the glossiest ofthe financial documents that Hewlett­Packard and other U.S. corporations arerequired to issue in order to satisfy thatcountry's governmental reporting require­ments. Behind its urbane appearance liessome feverish behind-the-scenes activityby a number of Corporate departments.

Primary monitor of annual report con­tents is the Securities and Exchange Com­mission, an agency of the U.S. govern­ment. In recent years the SEC has askedpublicly held companies to provide anincreasing amount of information. Thegoal is to let shareholders judge how acompany is running its business so theycan make intelligent investment decisions.

According to Vice President and Trea­surer Ed van Bronkhorst, the accountingprofession had allowed practices to existthat confused or misled the publicshareholder and led to tighter controls byboth the SEC and the profession's ownFinancial Accounting Standards Board.

As the chief financial officer ofHewlett-Packard, van Bronkhorst has thefinal sign-off on the accuracy and com­pleteness of the numbers furnished by thecompany. He has been involved with HP'sfinancial reporting to the outside since1957, when co-founders Dave Packardand Bill Hewlett first sold 10 percent oftheir stock to the public and the companybecame subject to SEC regulations.

The first annual report for 1957 wassmaller and considerably less sophisti­cated than the current four-color, 40-pageversion but it included the same two basic

types of material. The opening sectiontold the story of HP in the company's ownwords through a management letter toshareholders and illustrated theme copy.At the back was the section about whichthe SEC has had a good deal to say in theintervening years-financial statementsand notes on accounting procedures in1957 took four pages compared with 16 in1978. Among the SEC additions since1957 are a management discussion andanalysis of the consolidated summary ofearnings, and a 5-year comparison ofsuch "bottom line" statistics. (HP in­cludes 10 years.)

Changing regulations for subject matterrequired in the company's annual report and

other formal communications with share­holders is the concern of Corporate Secretary

and General Counsel Jack Brigham (right).At left is Craig Nordlund of the General Legal

department, who is HP's in-house legalexpert on shareholder reporting and related

financial matters.

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In order that HP can "tell it like it is",someone has to pay close attention towhat the SEC considers the "it" of ap­propriate information for shareholders.Since the Commission's changing regu­lations cover more territory each year, thestaff under Corporate Secretary and Gen­eral Counsel Jack Brigham reads a lot offine type to determine the proper contentsof the annual report and the more detailedlO-K form which must also be filed atyear-end. (Interim quarterly reports fol­low the same strict rules.)

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reporting toshareholders

Last year, for example, the SEC re­quired that companies supply informationon what it would cost to replace all fixedassets. Replacement accounting was al­most meaningless in relation to HP, whichhas fairly new facilities carried on thebooks at about what it would cost to re­place them, and an inventory which turnsover relatively fast. But a lot of HP peopleworldwide spent time pulling the propernumbers together.

This year the new SEC focus was onreporting financial information by prod­uct "segments" instead of lines of busi­ness. (HP has broken down its businessinto four major categories for a number ofyears, but some competitors have beenusing umbrella terms such as "elec­tronics" to cover all activities.) Anothernew requirement (Footnote 11) was finan­cial information by geographic area.

Making sure that accounting data forthe annual report is accurate is the re­sponsibility of Corporate Controller JerryCarlson. This year HP entities throughoutthe world were in direct contact withthe company's new auditors, PriceWaterhouse, who were working on theirfirst HP annual report. The outside au­ditors must be completely satisfied withthe numbers before associating them­selves with the statements-PriceWaterhouse would share in any liabilityfor error.

The consolidated numbers pulled to­gether by the Financial Reporting groupunder Tom Kulp represent a massiveyear-end effort by HP accounting depart­ments around the world. They must com­plete schedules in the "closing package"provided by Corporate covering variousintracompany transactions as well as 11categories of information required by theSEC. Also involved are production andsales departments which take an inven-

tory to supply numbers for the scheduleon "Property, Plant and EquipmentSummary".

Getting the numbers from the field toCorporate headquarters in Palo Alto wasgreatly speeded up for 79 HP entities thisyear by new COMSYS "masks" for in­putting data into simulated schedules on aterminal-an idea originated by the SouthQueensferry Division and developed byFinancial Reporting for companywide usein 1978.

The annual meeting of HP sharehold­ers traditionally is held on the last Tues­day in February, which sets in motion thepreparation by the Corporate Secretary'soffice and General Legal of another for­mal communication to shareholders: theproxy statement. A modest printed pam­phlet, it contains information about themeeting and company officers and direc­tors. This year the SEC for the first timerequired a five-year biographical sketchon each of the directors and a breakdownof certain non-audit services performedby Price Waterhouse. The list of man­agement remuneration disclosures wasalso expanded.

Equally as important as the content ofthe proxy statement is the timing. TheNew York Stock Exchange asks that theproxy be mailed to shareholders of record(as of January 3 this year) 30 days beforethe meeting along with a meeting notice.The annual report, which is mailed sepa­rately, must be timed to reach shareholdersfor their information at least as soon as theproxy material-since a vote is involved.

Also calculating backward from thedate of the shareholder meeting is MerleMass in Corporate Public Relations, whocoordinates the editorial side and overallproduction of the high-visibility annualreport.

After the theme was approved last July,interviews began for the news featuretreatment used in this year's annual reportcopy. By October the narrative was justabout completed and photography got un­derway. Final pictures representative ofthe company and its products were selectedfrom shooting done by photographer PeterKrupp of the Corvallis Division. The col­umns of financial material put together byFinancial Reporting started going to thetypographer in early December, about thetime that top management was draftingthe letter to shareholders based on finalyear-end earnings.

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Year-end consolidated numbers which go into the annual report are pulled together fromall HP entities by the Financial Reporting group under Tom Kulp (left) for Controller JerryCarlson (right).

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Talking with the business press is part of the daily job forthe Corporate Public Relations department under man­ager Dave Kirby (left), pictured with business editor JimMitchell of the San Jose Mercury One major projectof the P. R. department is overall production of theannual report.

A final press check of one section of the annualreport occupies the full attention of art directorTom Martin (left) and Merle Mass (center) ofCorporate Public Relations. With them isproduction manager Tom Park of PeninsulaLithograph Co. in Menlo Park, in charge ofrunning 100,000 copies on the web pressshown in the background.

stock (something of a judgment call)reaches all interested parties at the sametime. Peter Nelson of Corporate PublicRelations works closely with top man­agement to make certain that announce­ments about earnings and dividends areflashed simultaneously to the New YorkStock Exchange and to newspapers andmagazines via a specialized news service.

By far the most detailed informationfor shareholders is contained in the annualreport: the publication that a lot of HPpeople throughout the world have strainedto put together. 0

"I don't care if the caller is a majorstockholder or a prominent analyst, they'renot entitled to information more than anyother shareholder," says van. Absolutefairness in keeping shareholders informedhas been HP policy even before the dis­closure rules became so strict.

Nor do HP employees in general re­ceive privileged information before it ap­pears in the public press-they wouldthen become "insiders" according to theSEC and subject to penalties if they dealtin company stock on the basis of suchknowledge.

These days it requires some precisefootwork to make certain that news with apotential impact on the market value of

To insure absolute accuracy, peoplefrom three key departments-Treasury,Controller, Public Relations-remainedavailable to read each batch of correctedproofs until the final pasteup could beprepared for the printer's camera byJanuary 5. On January 9 and 10 the pressrun of lOO,OOO-plus copies was completedon schedule to make the critical mailingdate for the annual report. Extra copiesare used throughout the year for recruitingpurposes and to fill requests from thoseinterested in the company.

Some particularly sharp-eyed readersof the annual report are the financialanalysts who advise large banking housesand other institutions about investments.HP management holds two meetings forthem each year, and Ed van Bronkhorst isalso contacted individually by severalhundred analysts. He scrupulously avoidsgiving them "insider" tips that could inany way affect the price of HP stock. Asan added precaution, he doesn't talk toanyone during the "blackout" period afterthe close of a quarter and the release ofnumbers to the public.

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HPandHerman Mille~ Inc.:

With the introduction of the HP 300computer system late last year, the HPworld of employees, suppliers, customersand competitors was simultaneously ex­posed to an ultra-modern work stationcalled Action Office. Both HP 300s andAction Offices appeared together in salesdemo rooms, were linked in various pub­licity and sales promotion releases, andwere featured most prominently as stafffacilities at the Cupertino site of GeneralSystems Division.

To observers they clearly seemed tohave been made for each other­materials, designs, colors and functionsall worIQng as one to provide a handsomeenvironment for the revolutionary prod­ucts of the new computer age. Togetherthey seemed to say that the computer is nolonger a mysterious giant working awayin the hidden recesses of large organiza­tions, but rather is a highly functional andfriendly device that almost anyone canuse almost anywhere there's work to bedone.

In fact, the HP computer system andthe Action office were designed quite in­dependently of each other. Action Officeis a trademarked product line of the Her­man Miller, Inc. organization of Zeeland,Michigan. Its appearance about ten yearsago coincided with a wave of interest in"open office" planning. Developed byRobert Propst for Herman Miller, ActionOffice became the prototype and recog­nized leader in open-planning systems.It's a highly flexible system which createswork and storage areas through the use ofmodular units suspended from panels;floors are left clear and uncluttered ofmost furniture except for chairs andstand-alone units such as computers. Ofcourse, HP and many other firms havehad "open" offices for years, but haveused conventional office furniture placedinside low partitions.

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The marketing and developmentpeople at General Systems Divisionbegan looking at the new open-planningsystems soon after starting work on theHP 300, then known as "Amigo." DaveCrockett, the program manager forAmigo, said they early recognized theneed to come up with a setting that wouldemphasize and enhance the product'sgeneral business orientation and solvesome customer problems.

GSD's relationship with Herman Millerhas been very productive for both partiesbecause both look on it as an opportunityto experiment and learn. In particular, HPhas taken a strong interest in helping todevelop a production and materials handlingsystem tentatively titled Action Factory.

Jim Peachey, manufacturing managerfor the Amigo line, is not yet prepared toacclaim Action Factory a success until hehas had the opportunity to prove it withsome studies that remain to be completed.

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However, he said, "It works for us, andit's a friendly environment for product in­tegration. This doesn't mean to say it willwork for others, but as far as we are con­cerned, it is no longer experimental."

Action Factory is a total system thatstarts with the truck that delivers materi­als to the plant, and includes special cartsthat hold special trays for moving materi­als from station to station, and compactwork stations where everything is in reachand open to view.

General Systems is interested in Ac­tion Factory for its own use. Amongthose contributing to its developmenthave been Bob Schaeffer and TonyNapolitan as well as Jim Peachey. Her­man Miller, of course, will market thesystem-and probably quite soon. Itlooks like another winner. 0

Jim Peachey, manufacturing manager for HP300s, demonstrates the flexibility and modularity

of the so-called "C-frame" boxes used tomove trays of materials such as the circuit

boards shown here. A cart can carry as manyas four suspended boxes. For work purposes,

the boxes are unloaded and suspended on theframe of the next work station.

A story OfAction

and Suspense

Action Factory is the latest concept to bringHerman Miller Inc. and HP into collaboration.The goal is to provide a totally modular systemfor materials handling and product integrationin an open and friendly work environment. Theopen-frame approach, shown here at GeneralSystems Division in Cupertino, was developedat HP. Ruthie McDaniel at left and Lucille Blan­chard in the foreground said they enjoy theopenness and ease of working within their areas.

Dave Crockett, manager of the HP 300 computer line for General Systems Division,discusses the factors that led to the selection of Herman Miller's Action Office as anenvironment for displaying and promoting the sale of HP 300 computer systems. Actionoffice provides for economical use of floor space because it uses flexible, modular panelsto enclose space and to suspend most furnishings such as working surfaces, files andstorage cabinets. The highly engineered office system with its "task" lighting and built-inwiring approach creates a very compatible setting for HP's new business computerproducts.

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Recruiting's new team ...

HPNews

Restructuring of TechnologyResearch CenterPALO ALTO-Two new labdirectors have been named in arestructuring of the TechnologyResearch Center of HP Labs. Thechange brings the total number oflabs to eight, organized in threecenters.

John Moll is director of theIntegrated Circuit Laboratory,which will comprise the former ICLab plus a portion of the DeviceTechnology Department.

Pat Castro is director of thenewly formed Integrated CircuitProcessing Laboratory. She hasserved as operations manager ofthe IC Lab since its formation.

Bob Archer continues as direc­tor of the Solid State Laboratory.

Moscow games orderMOSCOW- V/0 "TechsnabExport," a Soviet foreign tradeorganization, has ordered nearly$900,000 worth of Hewlett­Packard instruments and systemsfor chemical analysis to be usedin the drug screening of athletes atthe 1980 Summer Olympic Gamesin Moscow.

Big HP 3000 orderCUPERTINO-Hewlett-Packardhas received a multimillion dollarcontract to supply businesscomputer systems to AutomaticData Processing, Inc. (ADP),Clifton, N.J., the world's largestindependent computing servicescompany.

HP anticipates that it will deliverapproximately $25 million worth ofHP 3000 Series business computersystems to ADP. Deliveries willbegin in the first half of 1979.

Puette heads ComputerService DivisionCUPERTINO-Bob Puette,formerly Data Systems Divisionmarketing manager, has beennamed general manager of theComputer Service Division,reporting to Computer SystemsGroup marketing manager DougChance. He replaces Tom Lauhon,who has joined the staff ofComputer Systems Group, report­ing to vice president and generalmanager Paul Ely.

Second Paris-area salesofficeORSAY-HP France has opened anew branch office near Paris. Thesite is Evry, 25 miles from HPheadquarters at Orsay. Staffedinitially by 60 people, it willprovide strengthened coverage inthe Paris area for the sale ofinstruments, desktop computersand computer systems.

RegUlar dividendPALO ALTO-At its meeting onJanuary 19, the Hewlett-Packardboard of directors declared aregular quarterly cash dividend onthe company's common stock. Thedividend, 15 cents a share, is pay­able April 13, 1979, to stock­holders of record March 28, 1979.

As of October 31, 1978, the endof the company's fiscal year, therewere 29 million shares of commonstock outstanding.

14

Not-so-calm center of the 1979 company-widerecruiting "storm" is represented by this view ofthe college recruiting team in the CorporateProfessional Employment office at Palo Alto.All those new faces and paperwork represent anew high in activity described in John Young'sletter on the opposite page. Identifiable fromleft are: Doug Stone, Jim Gilfeather, LisaShemwell and Jere Carroll. Their biggest jobcurrently is the Spring drive which will place256 recruiting teams from all divisions on 174campuses, resulting in some 12,000 campus­interview reports.

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From thepresident's desk

Our professional recrultmg actIvIty, particularly themain thrust directed at college recruiting, is operating atpeak intensity during this time of year. HP recruiting teamswill visit about 50 college campuses this week, a majorfraction of the more than 200 campuses we visit in the U. S.during the January-to-March recruiting season. A littlebackground on this program will point out how critical itssuccess is to the company's future.

HP's corporate objectives point out the importance ofdeveloping new products that are contributions to our cus­tomers. To meet this goal we must attract and retain a highlytalented and innovative staff of engineers, scientists andother technology experts. Similarly, the manufacture of ad­vanced products demands an equally capable group. Thesales and support functions also are technically based. Wehave made it a point to have professionals in the field whofully understand our products and how our customers makeuse of them. To meet these broad needs for the top techni­cally trained people, as well as professionals in other areassuch as personnel and accounting, HP has mounted an in­tensive recruiting program over the years.

HP's practice has been to rely heavily on recruiting newemployees directly from college for corporate R&D anddivision R&D and manufacturing needs. It has worked verywell for us to hire new graduates, offer them advancedtraining by means of the honors-coop program, and encour­age them to grow with the company. In a typical year, halfof these new professionals come directly from college. Theother half are experienced, that is they join HP from othercompanies.

In field sales, the background required is more exten­sive, and we have not had the facilities to train new collegegraduates. Thus, most field hiring has been in the experi­enced category.

However, many changes are now underway that compli­cate the recruiting process. A growing portion of our busi­ness is in computers and requires relatively even more pro­fessionals than our traditional activities. This is because ofextensive software development in addition to the hardware,and to the comprehensive support and service our customersneed in the field. Many of these field employees, therefore,increasingly are recruited directly from colleges. We alsorequire a broader range of technical skills than before:people professionally trained in computer science, inte­grated circuits, chemistry, environmental science, mechan­ical, electrical and materials are all actively sought at BS aswell as MS and PhD levels.

In addition to those trends, we have the added complica­tion of fast growth in our company's size. When you put itall together, the scale of the program is impressive. Fiveyears ago we hired 171 college graduates and 334 experi­enced professionals. Last year, the figures were 718 fromcollege and 905 experienced. This year our targets are 1500college and 1090 experienced-a dramatic increase that willtest our best efforts.

To put this in perspective, the U.S. Engineering Man­power Commission estimates that there are at most 100,000engineering students of all levels and types. We recruit fromless than half that population, no civil or sanitary engineersfor example, so HP's college recruiting alone accounts formore than 3 percent of the total available U.S. graduates.

Other companies have similar pressures for recruitingincreases, and since the number of students is constant, theresulting competition for top graduates will be particularlyintense.

We're well organized to conduct our recruiting program.We have about 400 engineers and managers involved in theeffort at the schools-all coordinated by Corporate Person­nel. The personal contact of our technical people with thestudents is a key factor in success so our recruiting teammembers carry a very special responsibility.

The challenge comes down to this: With greatly in­creased recruiting needs and basically a fixed supply ofgraduates, we must employ a great deal of salesmanship, atthe same time screening for HP quality. Last year, each newgraduate hired by HP averaged five other offers, and it willbe even more competitive this year. It's vital that everyoneinvolved in the recruiting process give this program a highpriority to insure that we employ the talent needed in creat­ing our future.

15

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HPgoestoHOllywOOd

The appeal of "Star Wars" and otherrecent science-fiction movies can be at­tributed in large part to the magic of spe­cial effects.

But a look behind the scenes of a Hol­lywood special-effects studio reveals thatit has more to do with technology thanmagic-and, as in almost everything elsethese days, computer science is a part of it.

Nearing completion at UniversalStudios is a space adventure called "BuckRogers," a production that involved a lotof work with miniature spacecraft. An HP9845 desktop computer and 9874 portabledigitizer, both made in Fort Collins, Col­orado, contributed to the filming of themodels.

Pictured here with the HP system andone of the fighter craft for" Buck Rogers"is technical supervisor Colin Cantwell, aHollywood veteran who designed theoriginal models for" Star Wars." For thisnew epic, Colin programmed the HPcomputer system to help speed up thefilming of the models. An operator entersthe desired size, location and attitude ofthe spacecraft for a particular maneuver,and the computer draws the image as itshould appear in the final film. It thenspecifies where the miniature is to beplaced on the shooting stage and whatlens to use on the camera.

For future productions, Colin plans tohave the computer tapes read directly intothe motion control system, so that eventhe movement of the camera and space­craft can be under computer control. ToBuck Rogers fans of forty years ago, thatin itself would have been science fiction.

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MeasureEDITORGordon Brown

ASSOCIATE EDITORSDennis CresswellBetty Gerard

ART DIRECTORTom Martin

GRAPHIC ASSISTANTTeri McPheetersSue M. Perez

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