{"id":1852,"date":"2010-09-15T18:53:07","date_gmt":"2010-09-15T22:53:07","guid":{"rendered":"http:\/\/www.credittrends.com\/blog\/?p=1852"},"modified":"2010-09-15T18:53:07","modified_gmt":"2010-09-15T22:53:07","slug":"ibm-ceo-sam-palmisano-should-look-at-facts-first","status":"publish","type":"post","link":"https:\/\/www.credittrends.com\/blog\/2010\/09\/15\/ibm-ceo-sam-palmisano-should-look-at-facts-first\/","title":{"rendered":"IBM – CEO Sam Palmisano Should Look at Facts First"},"content":{"rendered":"

IBM (IBM<\/a>) CEO Sam Palmisano should measure his words prior to speaking badly of others.<\/p>\n

In an interview<\/a> with the Wall Street Journal, Palmisano said that during former CEO Mark Hurd\u2019s five-year tenure, Hewlett-Packard\u00a0(HPQ<\/a>) was hurt by sharp cuts in its R&D budget, and that the company was declining in relevance.
\nMeanwhile, over its past five years, spending on R&D at IBM is flat while capital spending has declined by 21%. In addition, the firm has exaggerated its free cash flows due to pension underfunding and other activities, both of which we have written about in the past.<\/p>\n

In the chart below, showing the past 5 years R&D spending, the lines between IBM and HPQ do not look much different. Also, one should not distinguish between purchased and in-house R&D in cases such as HPQ which have been successful acquirers.<\/p>\n

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