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BUSINESS TIME

Carly Fiorina and Donald Trump are both right: They’re both pretty terrible at business

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Finally, some common ground.
By Alice Truong

Deputy editor

This article is more than 2 years old.

Carly Fiorina made a big splash at the second Republican presidential debate, but she didn’t escape a lengthy fracas with GOP frontrunner Donald Trump, who attacked her record as the CEO of Hewlett-Packard. Fiorina, in turn, struck back at Trump’s many debt-laden businesses.

The thing is, they’re both right: Fiorina and Trump both have incredibly spotty records as business executives.

Here’s a quick sampling of their business track records:

Fiorina

  • Fiorina touted HP’s quadrupled revenue growth under her tenure, but as Trump correctly pointed out, that growth came from the disastrous $24 billion acquisition of Compaq, a move that resulted in massive losses and layoffs. From 1999 to 2005, HP shed 30,000 jobs under Fiorina.
  • The merger coincided with a massive decline in PC sales, and HP’s stock halved after the company repeatedly missed earnings targets. The stock rose again after she was fired.
  • While she was president of Lucent Technologies, the company boosted revenue by loaning money to “sketchy” customers, according to Fortune. When the dotcom boom burst, Lucent’s shares fell below $1, and it ended up merging with Alcatel.

Trump

  • Fiorina was quick to bring up Trump’s failures, noting his businesses had filed for bankruptcy four times: in 1991, 1992, 2004, and 2009. “Why should we trust you to run the finances of this nation any differently than you managed the finances of your casinos?” she asked. (Trump has maintained that he was merely taking advantage of the US’s bankruptcy laws.)
  • His second business to declare bankruptcy was Plaza Hotel, which had $550 million in debt. As part of the restructuring, he gave up his 49% stake, though stayed on as CEO without taking a salary.
  • Trump Hotels, his third business to file for bankruptcy, racked up $1.8 billion in debt.
  • After missing a $53 million bond interest payment, Trump Entertainment Resorts declared bankruptcy in 2009. Afterwards, Trump resigned as chairman.

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