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HP's Elite Technology Team Moves to GM: Legal Action Begins

Hewlett-Packard Co.'s HP Enterprise Services in Plano, Texas

Photograph by Mike Fuentes/Bloomberg

Hewlett-Packard Co.'s HP Enterprise Services in Plano, Texas

Hewlett-Packard and General Motors, two of America’s largest companies, used to have a great relationship. Through its services arm, HP (HPQ) operated much of GM’s technology infrastructure. This freed GM (GM) to go about its business of selling cars, leaving HP to keep the computers humming. Happy days for all.

But the goodwill between the two companies has given way to what could be a mess of litigation. In mid-December, HP quietly petitioned (pdf) a Texas court to depose a pair of former executives who recently started to work at GM. The executives, Gregg Hansen and Todd MacKenzie, represent part of a group of 18 employees that HP describes as having resigned “en masse and without notice.” All of the employees worked in HP’s internal IT organization at a facility in Austin, Tex. Spokespeople from both companies declined to comment.

The fireworks between HP and GM really started in February, when GM hired Randy Mott, formerly Hewlett-Packard’s chief information officer, to run its technology operations. Mott decided to cut GM’s contracts with technology services firms such as HP and IBM (IBM) and to bring about 90 percent of the technology functions in house. In October, GM said it would hire 3,000 HP employees as part of this process.

Far from just recruiting the rank and file, GM has also hired sales, operations, and infrastructure executives away from HP over the past year. Hansen and MacKenzie were both “directors of information technology,” according to HP, which alleges that the pair recruited a number of their direct reports to join them at GM.

In its filing, HP says it “strongly suspects that something other than mere coincidence will explain the en masse departure, on the same day and to the same place, of eighteen employees working within the same organization.” The document goes on to talk about HP’s concerns over the employees leaking confidential company information.

It’s not clear what HP—which is also working to get its business in order under Chief Executive Meg Whitman and dealing with an accounting investigation tied to its 2011 acquisition of Autonomy—hopes to gain from this action. The company has already lost dozens of high-ranking employees to GM.  Will legal machinations persuade these employees to return to HP and remain happy campers? Not likely.

Vance is a technology writer for Bloomberg Businessweek in Palo Alto, Calif. He is the author of Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future (HarperCollins, May 2015). Follow him on Twitter @valleyhack.

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