Box 3, Folder 45 – General Speeches
March 13, 1974, Acceptance Speech upon being presented the Medal of Honor by the Electronic Industries Association
3/13/74, Typewritten text of Packard’s speech
Packard says he has read the history of the EIA which President Jim Adduci sent to him and noted that it was founded in 1924. Packard recalls he was 12 years old then and had been reading many books on electricity and science. He tells of building a radio: “I hooked up a vacuum tube, a variable condenser, a coil, a grid leak, an A battery, a B battery, and a set of heaPackardhones, and I can still remember the excitement for me and my family as each of us took a turn listening to the first broadcast from that little set. It was a program that was originating from Station WHO in Des Moines, Iowa – more than 600 miles away from our home in Pueblo, Colorado.”
Packard says that the U.S. has had, “by any measure,” a commanding lead in technology over the work in other countries. And he adds that EIA “deserves a great deal of credit for this.
“Tonight,” Packard says, “I would also like to say a few words about another major contributor to the progress of electronics in America – our great universities.”
“In [a recent] speech I proposed that executives in business and industry be more careful in the way they allocate company money to universities. My point was that by giving unrestricted grants, companies could be supporting some of the anti-business activity that has been occurring at some of our major universities.”
“With that thought in mind, then, I would like to recount some of the ways the electronics industry has benefitted [sic] from – in fact, to a large degree, owes its very existence to – American universities. In doing so, I hope you will agree with me that our industry, in particular, has an obligation to these universities that should continue to be recognized in substance.
“In the 1930s, a small group of professors laid the groundwork for the vast and productive educational program in electronics engineering that has served as a foundation for the leadership in science and engineering technology that our industry enjoys today. Included in this group were Professor Terman at Stanford, Professor Everett at Ohio State, Professor Armstrong at Columbia, and professor Chaffee at Harvard. These men, along with a number other equally prominent professors, wrote the textbooks which became the bibles of electronics engineering in the years that followed. Many of these same men also did important research in those early days: Professor Terman on theory in detectors and in feedback; Professor Everett on vacuum tube amplifiers; and Professor Armstrong on frequency modulation, for example.”
“By the end of the 1930s the combination of university and industrial research had brought us the klystron, knowledge about the propogation of radio waves in the ionosphere, and microwave technology. In total, this decade of research provided the technical base for the tremendous research and development accomplishments during the years of World War II.”
During the war Packard says “…electronic research laboratories were established at MIT and Harvard. Following the war Stanford, Cal Tech, John Hopkins and many other universities joined them as centers of electronic research here in America. These institutions, with their strong electronics engineering departments, have been a vital factor in the success of our industry. Their laboratories have kept us at the forefront of technology. Their graduates have become our scientists and engineers – unexcelled anywhere in the world. And, they have made a great contribution to the free enterprise business environment in America. Around them, in Palo Alto, in Pasadena, in Boston – in scores of places across the country – one finds a cluster of electronics business enterprises. In fact, it is fair to say that these electronics-oriented universities and colleges have been the birthplaces of a very large number of the firms in our industry.
“Much university research of particular interest to us is supported by large foundations or the government — largely Defense Department funds in the electronics area. However, short-sighted policies imposed by the Congress, changing priorities in the allocation of federal funds, and other factors, are placing severe pressures on the budgets of these schools. They need, and deserve, help in the areas I am talking about – particularly help from the electronics industry.
“We need to remember that these universities and colleges have been strong partners of ours over the 50 years of progress in electronics that we are celebrating here tonight. I believe that we as an industry should do more to assure that they will continue to be strong partners of ours in the future.
“Thank you again for this Medal of Honor. It has been a great privilege for me to be with you tonight.”
3/13/74, Earlier draft of speech mostly handwritten by Packard
3/13/74, Copy of the printed program for the dinner
3/13/74, Printed guest list for the dinner
3/13/74, Printed invitation to the dinner
4/30.73, Letter to Packard from Jim Adduci, President EIA, discussing details for the dinner and award presentation
5/8/73, Copy of letter from Packard to Jim Adduci, thanking him for his note
1/23/74, Letter to Packard from Jim Adduci with more details for the dinner
2/5/74, Copy of letter from Packard to Adduci saying he will be prepared to say a few words at the dinner, and asking Adduci to let him know if he has any special suggestions
2/25/74, Letter to Packard from Jim Adduci sending him a copy of the book entitled EIA: The First Fifty Years
3/6/74, Letter to Packard from Mayo J. Thompson, Federal Trade Commissioner saying he regrets he will not be able to come to the dinner
3/19/74, Copy of letter from Packard to George Konkol, Chairman of the Board of EIA, saying it was an honor to be a part of the dinner
3/15/74, Letter to Packard from Don Wilson, President, P. R. Mallory and Co., sending congratulations
3/20/74, Letter to Packard from Jim Adduci thanking him for participating and complimenting him on his remarks
3/27/74, letter to Packard from George Konkol, Senior VP, GTE Sylvania, thanking him for participating in their dinner
6/7/74, Letter to Packard from W. L. Everitt, Dean Emeritus, University of Illinois, congratulating him for the honor he received at the EIA dinner. `He reminisces about working with the other professors Packard mentioned and about meeting Packard in 1945. He also says he was sorry to see Packard turn down the job of Secretary of Defense ‘because I greatly admired your performance as Deputy Secretary.’
6/26/73, Clipping from Palo Alto Times saying the EIA had announced they will award the Medal of Honor to Packard
Box 3, Folder 46 – General speeches
May 21, 1974 Presentation of Harvard Business School Club of Northern California Award to Edmund W. Littlefield, San Francisco, CA
5/21/74, Copy of the typewritten text of speech
Packard says he is pleased to have the honor of presenting this award to Ed Littlefield whom he has known for many years. “His performance as Chairman and Chief Executive Officer of Utah International has been impressive by any measure one might choose.” Packard describes the international growth of Utah International over the years and adds that “While he has been doing such an outstanding job with his business, he has taken time to participate and contribute to many civic and professional activities. He has been a trustee of Stanford and a regent of the University of San Francisco. He is Vice chairman of the Stanford research Institute and is a Director of several of this country’s most prestigious corporations, and has been active in many local and national organizations.”
“Ed Littlefield is clearly an uncommon man in the context Herbert Hoover used. Mr. Hoover pointed out that we hear a great deal about the common man, but then went on to say that when we are sick, we don’t want a common doctor – we want an uncommonly good doctor: when we be at war, we want an uncommonly good general, and particularly in these times if we are in trouble, we need an uncommonly good lawyer.
“Tonight we are here to honor an uncommon business leader.
“It is my honor to present to Ed, on behalf of the Harvard Business school Club of Northern California, the Club’s Annual Award –
“The Chair of the ‘Business Statesman of the Year.’”
Box 3, Folder 47 – General Speeches
July 27, 1974, The Lakeside Talk, The Bohemian Grove, CA
7/27/74, Copy of the typewritten text of Packard’s speech
Packard speaks to the members of “Bohemia” as they wind up their annual two week get together. He says “The world we return to tomorrow appears, in many ways, to be changed from the world we returned to a year ago. Who would have predicted last summer that the prime interest rate would go to 12%. Who would have believed it if they were told they would have to wait in line an hour or more for gasoline before the next winter had passed –that Egypt and Syria would attack Israel before the end of the year, and this would result in an Arab oil embargo against the U.S….And that there would be a rapprochement of the United States with Egypt and Syria.”
“We are at a very crucial crossroads in the course of history. Our nation, and we as citizens, have before us just as great an opportunity to influence the course of the world as we have had at any time during the past three decades.
Packard says the events in the Middle-East of the past year, and particularly the last week [referring to the Arab/Israeli war] show that “…the United States is still by far the most influential nation in the world today.
“There are still some people in this country,” he says, “ who believe the United Nations can be the dominant institution for world leadership. The UN has a useful function. It provides a forum for debate; it can perform many services, and it should be nurtured and supported as a mechanism to deal with the minor problems among the nations of the world; and to help with the major problems.
“The outcome of the major problems and the major conflicts among the nations can be determined only by the two super powers—the United States and the Soviet Union.
Packard talks about the people of this country “…who are troubled about this responsibility. They would prefer to shrink away from it….
“They believe we can withdraw our military forces from Europe and Asia. They believe we can raise barriers along our borders and retreat from our involvement around the world so as to better devote our energy and resources to our problems here at home.
“Perhaps we could do that. Perhaps we should do that. However it is my belief that we neither could nor should back away from the opportunity which we, as a nation, have to exert a positive influence on the world.”
If we don’t live up to this opportunity the Soviet Union will, he emphasizes. “I submit to you,” he says, “this will be a better world if the United States remains the most powerful, most influential nation—a better world for all nations and all people—than it will be if the Soviet Union becomes the most powerful and most influential nation.”
“World leadership comes from a large number of factors. Some can be measured in objective ways. Others are subjective and cannot be evaluated with any precision. Objective factors include m8litary strength and economic strength, both of which are essential pillars of U.S. leadership—present and future. It is our military strength and our economic strength which have thrust upon us the principle burden of keeping the peace, supporting the world monetary system, providing the largest market for the products of other nations, producing the food for the nations which are hungry, leading the world in scientific innovation—and a long list of other things on which other nations depend, to a greater or a lesser degree, for their security, their prosperity and their progress”
“Great hopes had been expressed in the Charter of the United Nations back in 1947, but the grim realities of Soviet communistic expansionary aims soon forced a polarization of the world. We entered the era of the cold war.
Packard lists the several alliances which the U.S. entered into: NATO in Europe, CENTO in the Middle East, and SEATO in Southeast Asia
“We had hoped these alliances of the countries of the free world would provide the mechanism for us to share the burden of world leadership with our allies—and they have done to some extent. We had some material and moral support in Korea, much less in Vietnam.
Packard says these alliances have been eroded over time and “We are now on a more pragmatic course, and this course is based on a better understanding of what we, as a nation, can and cannot do”
The first objective of this present course, “the Nixon Doctrine, ” he says is “the preservation of peace in the world—above all to maintain our military strength so a confrontation with the Soviet Union need not escalate to a nuclear war”
“An objective of our current foreign policy is to help provide a climate for economic progress, not only for our friends but also for the People’s Republic of China and the Soviet Union. That is what détente is all about.
“The Nixon Doctrine is designed to substitute negotiation for armed conflict, to offer partnership—rather than charity—to all nations around the world. This policy to be successful must be built on a foundation of strength. Economic strength and military strength.
Packard provides a chronological review of recent events in the Middle East:
1969 – “Nasser was waging a war of attrition against Israel along the Suez Canal”
January 1970 – “Israel responded by sending its air force deep into Egypt, striking with impunity…only five miles from Cairo.”
August 1970 – U.S. helps “to the extent of achieving the cease-fire …on the Suez front.”
July 1972 – Sadat in Egypt “expelled some 20,000 Soviet military personnel, giving as the reason the Soviets would not give back him with the forces needed to attack Israel.”
October 6, 1973 – “Egypt and Syria launched a well-planned, well-coordinated attack against Israel…achieving almost complete tactical surprise.”
Packard tells how a U.S. resupply effort, paralleled by a similar effort by the Soviets to resupply Egypt…enabled the tide to be turned in favor of Israel, and was an impressive demonstration of our military strength. We had the best weapons available when they were needed, and the ability to deliver them where they were needed.
“There are many in the Congress and other leaders across this land who believe we should reduce our world-wide military forces. They do not believe we need a Navy to control the seas. They do not believe we should spend the money necessary to assure that we have weapons superior to those of the Soviet Union and of any other possible antagonist.
“I ask you to think what might have happened if the only response we had last October was the resort to our nuclear weapons against the Soviet Union.”
“Secretary Kissinger’s brilliant diplomatic success in the weeks that followed would not have been possible, had the U.S. been unable to deliver to Israel more and better weapons in the critical period from October 10th to October 20th than the Soviet Union could deliver to Egypt and Syria.
“At no time did this confrontation between the two super powers involve any threat, nor the slightest probability of a resort to nuclear weapons. We had other options to meet the need.”
“If the United States adopted a course of unilateral nuclear disarmament at the same time the Soviet Union continued their present buildup of nuclear forces, we could reach the point where there would be a significant difference between the damage the United States would suffer and that which the Soviet Union would suffer in an all-out nuclear exchange.
“If actions by either the Soviet Union or the United States made a significant change in the present, rough, balance of nuclear forces, the situation would become less stable and the danger of a nuclear holocaust for the world would be increased.
“With the present level of forces there is no possible advantage that either we or the Soviet Union could achieve in resorting to nuclear weapons. We must, therefore, be prepared to handle every conflict in the future that escalates to warfare with conventional non-nuclear weapons.
“The United States will be able to do this for ourselves and for our friends and allies if we maintain our defense budget at about the present level. We cannot do so at lower levels of military spending.,
“We must continue a dialogue with the Soviet Union about nuclear forces and we should eventually achieve an understanding which will allow each of us to safely reduce the level of our forces.”
Packard takes a moment to mention the subject of economic strength. “Our economic strength is equally important to our military strength as a foundation for continuous U.S. world leadership. I chose not to spend much time on this area because I am quite sure there are more experts in this audience on economic affairs than on military affairs, and I thought I might be on safer ground talking about military problems.
“In closing, I want to express a note of concern. I hope you have concluded by now that I am very optimistic about the great opportunity which lies ahead for the United States to lead the world forward to a long era of peace and prosperity. As I look back to 1968 and compare the world in that year with the world in 1974, I believe we have made great progress along this road. I would have much less hope for peace and prosperity in this world of ours if our country fails to continue to live up to its responsibility of international leadership.
“It takes a great deal of faith on my part to believe the Congress in session now, and the new Congress which will be elected next fall, will have the wisdom to understand that we cannot turn this country back to a policy of isolationism. We must, whatever the decision on the impeachment, move forward and live up to our responsibility of leadership. There is no country in this world except the United States that can assure the survival and the success of liberty.”
Box 3, Folder 48 – General Speeches
November 7-9, 1974, A Time For Unity, Second Europe-America Conference, Hamburg, Germany
11/7-9/74, Text of Packard’s speech at the Conference
Packard speaks at the opening of the Second Europe-America Conference “which,” he says, “has been called to carry forward the discussions and continue the progress which came from the conference in Amsterdam in March of 1973.”
[See Packard speech March 26, 1973]
Packard mentions developments that have taken place since the first conference, developments that “have made the problems of the Atlantic Community more serious:“ inflation, recession, oil/energy crisis, food shortages.
And he mentions some areas where progress has been made: international monetary system, the North Atlantic Treaty, first conference on the Law of the Sea held, discussions on the energy problem.
Packard thinks the U. S. Congress will continue “pressures for troop reductions [in Europe], but…there is a good probability that arbitrary action will be avoided.
“Negotiations with the Soviet Union on strategic arms control are continuing with an apparent resolve on both sides to make progress. The issues in SALT are exceedingly complex – and slow progress, rather than a major breakthrough, is all that can be expected.”
Packard sees continued East-West negotiations, but they will be “slow and will require patience.”
He hopes the Mid-East War, which took place in October 1973, “will be discussed in some depth at this conference. The quantum jump in the price of oil – with its implications on the overall energy question, international balance of payments, and monetary affairs – is not the only issue of great import which came from that conflict and which must be marked for urgent attention.”
“I am convinced that the magnitude and international interdependence of the serious problems we must resolve in the near future are such that they can not be solved by the individual western nations acting independently with a nationalistic approach. If there ever was a time that demanded the strength of unity in the affairs of Western Europe, Canada, America and Japan, that time is today. We can not falter now.”
“We have today before us serious challenges which produce an atmosphere of great urgency. But we must, and I am sure we will, continue to address these challenges with a continuing allegiance to our common ideals and our common heritage.”
Packard sees a private, unofficial conference such as this one, “as an essential prelude to make the appropriate governmental action possible, through the development of a constructive public opinion….It is easier here than in an official meeting to bring into the open new and fresh points of view which are essential if we are to deal wisely with the complex issues of a changing world.
“Old dogmas seem to have a greater persistence inside a government, and we are now at a very critical time when at least some of the thinking which has guided international affairs for the past several decades needs to be re-examined and changed to meet the challenges of the future.”
“Détente with the Soviet Union and opening communications with the Peoples Republic of China will provide a better understanding of the common interests shared by the Western World and the Socialist World, as well as the real differences between them.”
“Both the magnitude of our common problems and the atmosphere of urgency underlie the importance of making progress toward the goals of the European Movement and the essential need to maintain and strengthen the unity of purpose of the Atlantic Community, and indeed to expand that unity of purpose to include Japan.
“To be realistic, it is not likely that a single large breakthrough can be made to solve all of the problems that block a complete political union within Europe in the near future – though, of course, that goal should not be abandoned.
Packard expresses the hope that the conference will focus on “current pressing problems, because unless they can be solved in ways which will enable us to move ahead together, competitive national interests will surely take over and set us back from the course we have been following for so long.
“Toward that end,” he says, “I would now like to make a few observations about several of the issues we should be discussing at this conference. I do not want to pre-empt the experts on these particular subjects since the issues are complex and not everyone will agree with my views; but I do want to get some of these matters on the table and in doing so, I will try to point out some specific aspects of these issues which should be discussed.”
Saying that inflation is on the minds of all the countries of the Atlantic Community as wee as in Japan, Packard stresses the it is an international problem and cannot be solved by any on country taking domestic action alone. He gives an example drawn from experience in the United States:
“When President Nixon took office in 1969 substantial reductions were made in the defense budget based largely on the withdrawal of forces from Vietnam, but also based on a lower worldwide military posture. These actions slowed down the economy and increased unemployment, particularly in the aerospace and other defense related industries. By did-1971, inflationary forces in the U. S. were leveling off at around 4% and many thought the rate of inflation might go lower. The balance of payments situation was, however, getting worse and this triggered the action in august of 1971 to devalue the dollar.
“The dollar devaluation action was taken to get the United States balance of payments situation under control. It was the commonly held view that the dollar devaluation would have little effect on the domestic economy. In fact, the dollar devaluation was a significant inflationary action.
At one stroke, it increased the price of nearly all goods and materials imported into the United States and lowered the price of U.S. goods exported to the major world markets, thus greatly increasing the demand for U.S. materials and products.
“In 1971 devaluation alone might not have caused a substantial increase in inflation, but it was followed in the fall of 1971 and the spring and summer of 1972 by an increase in federal spending, implemented by executive action, to bolster the economy for the election year of 1972.
“These two actions, devaluation and increased federal spending , heated the economy to the extent that inflation in the U.S. was seriously out of hand by the spring of 1973.
“Wage and price controls were imposed and here was a classic example of the inability of wage and price controls to be effective in the domestic market when the international market remained free. If a product was unprofitable because its price was controlled at home, it could be sold at a higher price abroad. Shortages developed because efforts were diverted to more attractive parts of the market.” He gives an example of baling wire rising from $9 a roll to $35 a roll in about two years.
“We must find ways to deal with inflation on an international level. I hope we can make some recommendations in this area as a result of this conference.”
Packard recalls that at the first Europe-America Conference in Amsterdam [See Packard speech March 26, 1973], “It was agreed that a strong military posture must be maintained on both sides of the Atlantic, and that there was a continuing need for a substantial presence of U.S. troops on the European continent.
“There was,” he continues, “considerable discussion on the role of nuclear and conventional armaments. This was directed largely at the question of whether stronger conventional forces might provide better options for both deterring armed conflict and for controlling the conflict should deterrence fail.”
Packard feels there has been some progress in this area since that time, the most encouraging development being “the fact that the U.S. was able to use its military power to support Israel in a way to achieve a favorable outcome in the Mid-East without endangering world peace or bringing into jeopardy the détente with the soviet Union.”
He sees, however, two “very troublesome” things about the 1973 Mid-East war:
“1. Why did Israel and U.S. Intelligence fail to predict the war.”
“2. What would have happened if the U.S. re-supply effort for Israel had failed and Egypt and Syria had prevailed.
On the first point, Packard says that although the U.S. and Israel knew the military strength of Egypt and Syria, they did not know the intent of the Arabs or of the Soviets. “They did not believe there would be a soviet supported attack against Israel in this new era of detent [sic]. There is a lesson for NATO here that must not be overlooked.
“On the second point Israel survived because the United States was able to deliver more and better weapons from the U.S. mainland in that critical period after October 10 than the Soviets could deliver by sea and by air to Egypt and Syria – and the U.S. had very little help from its NATO friends. Would NATO have been able to save Israel without conventional weapons from the U.S. even if NATO had been able to agree that it was in their interest to do so? Are NATO forces available only to respond to a direct military attack on NATO member countries? Have the European NATO members strengthened their position with the Arab world by their posture last fall?
“These are very serious questions about the security of Western Europe which have been brought into public light. They are more political than military and the issues need to be considered very carefully for guidance in the future. I hope they will be discussed in more detail at this Conference.”
“Energy and Oil
Packard says the West already had an energy problem, but the Arab embargo made it a major crisis. “Growth in the use of energy was encouraged by governmental policies and actions…, but it was also our long standing commitment to unlimited exponential growth that prevailed at almost all levels in the societies of the U.S., Europe and Japan that accounted for the relentless increases year after year in energy use.
“The oil embargo of last winter and the arbitrary price increase by the OPEC group has presented the U.S., Europe and Japan with the most serious economic problem since the depression of the 1930s.
“For a number of perfectly obvious reasons the western world can not afford to be hostage to the Arab world in either the supply of oil or in the price.
“There are some things we can not do to break this stalemate. We can not afford to take over Arab oil by force. We can not force a reduction in the price of oil. It is their oil and they will charge whatever they think they can get away with.
“On the other hand, there may be some possibility we can convince them it is in their interests to work with us on a reasonable basis. That is what we are now trying to do, and we must continue this course with patience and persistence.”
Packard says stockpiling and sharing arrangements are under discussion, although “There is disagreement as to whether this should be done with government-to-government agreements or through private arrangements, or both. This is a subject we might discuss here at this conference.
“In the long run, the only safe course is to reduce the dependence of our economies on Arab oil. To do so will require some drastic changes in thinking about how we use energy as well as new efforts to increase the supply.”
“The most important step that has to be taken with great vigor is conservation. The per capita use of oil in the U.S. is three times the per capita use in Europe.”
“I do not believe we can add much to a resolution of the oil crisis and the energy crisis at this Conference by a discussion of the details of the problem or all the options for alleviation. We might, however, profit from a discussion of better international mechanisms to address the issues—formal structures or organizations—the role of further meetings and conferences, and in particular how this group might contribute in a constructive way.
“There are corresponding problems of food and other issues which this Conference can usefully discuss. Let me emphasize again—I believe we can be most helpful in advancing our cause by addressing some of these current large and urgent problems. To the extent they can be solved by common policies and actions, our bonds of unity will be strengthened—to the extent solutions are sought by individual nationalistic approaches, our carefully nurtured bonds of unity may be shattered beyond repair.
“This Conference can serve to strengthen the bonds of unity and that must be our goal.”
11/7/74, Page 2 [page 1 missing] of the Conference program
2/12/74, Letter to Packard from Eugene Rostow talking about scheduling of the Europe-America Conference June 7-9, 1974
2/20/74, Copy of a letter from Packard to Eugene Rostow saying he will try to hold the dates available
4/2/74, Letter to Packard from Eugene Rostow saying the Conference will be held June 27-29, 1974. He says it will be more private (about 50 people) and informal than the first conference in Amsterdam. He says they have made a point of inviting some of the “skeptics and ”doubters.”
5/17/74, Copy of a letter to Rostow from Packard sending a $2,000 check toward expenses of the Conference
5/28/74, Copy of a memo from Rostow to all participants in the Conference giving the place for the Conference as the Egern Hotel, near Munich
6/7/74, Copy of a telegram from Packard to Rostow saying he will not be able to attend the Conference
6/12/74, Copy of a telegram to Packard from Rostow saying the Conference has been postponed to November 7-9
6/20/74, Copy of a memo from Rostow to members of the American and Canadian participants saying the Conference has been rescheduled to Nov.7-9, 1974
10/1/74, Copy of a memo from Rostow to members of the American Delegation to the Conference saying it will be held in Hamburg and asking they confirm attendance
10/7/74, Copy of a memo from Richard Wallace to members of the American Delegation to the Conference saying that David Packard has agreed to be “the U.S. repporteur” for the meeting, and giving more logistical details
10/14/74, Letter to Packard from Robert Ellsworth, Assistant Secretary of Defense, giving some talking points and background for Packard’s use.
10/17/74, Letter to Packard from Rostow enclosing copies of two articles he recently wrote which he thought may suggest leads. Referring to a general feeling of stress and pressure of events in the world, he ends with “If we don’t lead, lead well, and lead soon, the tide may indeed become overwhelming.
10/18/74, Letter to Packard from Robert Ellsworth enclosing an article on American-European relations he thought would be of help to Packard as he prepared his remarks for the Conference in Hamburg
10/23/74, Copy of a letter to Packard as well as other people from Percival F. Brundage of the Atlantic Council asking if he could make a contribution this year
10/30/74, Copy of a letter from Packard replying to Brundage that he is not in position to be helpful during the remainder of this year, but will send $5,000 next year
11/7/74, Letter to Packard from Percival Brundage thanking him for the pledge of $5,000
10/29/74, Copy of a letter from Packard to Rostow enclosing a draft of remarks he plans to give at Hamburg and asking for comments
10/29/74, Copy of a letter from Packard to Henry H. Fowler, enclosing a draft of the address he plans to give at Hamburg
11/1/74, Copy of a letter from Packard to Robert van Schendel sending a copy of the remarks he intends to give at Hamburg
11/12/74, Copy of a memo from Rostow to members of the American delegation to the Conference enclosing a copy (attached) of his closing statement at the Hamburg meeting
10/28/74, Letter to Packard from Dr. Albert Wohlstetter, saying he will not be able to attend the meeting in Hamburg, and discussing possible meetings with people in Washington
11/13/74, Copy of a letter from Packard to Professor Wohlstetter thanking him for articles sent and saying that he thought the Hamburg meeting was “somewhat of a disappointment”
11/13/74, Copy of a letter from Packard to Robert F. Ellsworth telling him he “did not miss very much. Packard says “I do not believe there is much likelihood that our NATO friends could take an active part in the Middle East situation, but I think they might at least be talked into giving us a little more indirect support by way of use of bases for staging, etc.”
11/18/74, Letter to Packard from Eugene Rostow thanking Packard for his “generous and effective help at the Hamburg meeting.” Rostow says “It was wonderful for you to fill in for Bob Ellsworth and you saved the day” by transforming the opinions of the Europeans on some aspects of the Middle East. He concludes that Packard accomplished this “by the power of your mind and personality. He adds that when he reported on the consensus achieved at Hamburg to Joe Sisco, he said, “It’s music to my ears.” Rostow concludes his letter with, “It is a pleasure and satisfaction for me to work with you, and I hope we shall do it again. You are a hell of a fellow to have in a foxhole.”
12/16/74, Letter to Packard from Richard J. Wallace of the Atlantic Council saying that Eugene Rostow had asked him to tell Packard that they were short $1500 for the American delegation trip to Hamburg. Wallace says Rostow told him that Packard had said he would help if need be.
12/18/74, Copy of a letter from Packard to Richard Wallace saying he will send $750 in January 1975.
12/23/74, Letter to Packard from Theodore C. Achilles of the Atlantic Council, thanking him for offering the $750 and adding that he is writing because Richard Wallace just passed away.
1/2/75, Copy of a letter from Packard to Theodore Achilles sending the promised $750
1/6/75, Letter to Packard from Theodore Achilles thanking him for the $750
1/3/74, Exerpts from a transcript of a Press Conference of Dr. Henry Kissinger
Copies of background papers
1/10/74, Remarks by Secretary of Defense James R. Schlesinger to the Overseas Writer Club
2/74, America, Europe, and the Middle East by Eugene Rostow
3/22/74, America and Europe in the Perspective of the October War by Eugene V. Rostow
9/9/74, Where Are We Now, opening remarks by Eugene Rostow at the Twentieth Annual Assembly of the Atlantic Treaty Association
9/10/74, Remarks by Henry H. Fowler, Partner, Goldman, Sachs & Co. at the Fifth International Conference of the Conference Board
11/5/74, The Agenda for Atlantic Action by Eugene Rostow
1/75, The New Atlantic Challenge, book r4eview
Undated, The World Bank Since Bretton Woods by Edward Mason and Robert Asher
Undated, Draft outline of questions related to the Atlantic organizations
Undated, Typewritten notes apparently quoted from Professor Milton Friedman
Undated, Typewritten sheet titled Pearl Harbor, referring to comments by Eugene Rostow
Undated, Handwritten notes giving inflation rates in several countries
Undated 1974, Article from Chronicle [San Francisco?] quoting comments by France’s President Valery Giscard d’ Estaing warning of a general economic crisis
Box 3, Folder 49 – General Speeches
1974, Pep Talks to HP Managers
To provide some background the following comments are taken from a memo by Dave Kirby, PR Director, written to the Archive Department in 1988:
“HP had experienced a disappointing year in 1973, at least in the eyes of Packard and Bill Hewlett. Inventories, accounts receivables and other expense items exceeded appropriate levels and there was even talk among some managers of seeking outside financing – incurring some long-term debt – to get the company over its rough spots.
“It was against that background that Packard embarked on a series of ‘pep talks’ to HP managers. [The following remarks by Packard are from] unedited transcripts of those talks.
“The talks are interesting because they show an ‘unvarnished’ Packard – with his temper up, his irritability clearly in evidence, and his motivational juices flowing.
“The impact of these talks was immense and immediate. Within months, or even weeks, the company achieved a significant improvement in its operations and any thoughts of seeking outside financing were abandoned. Dave Packard had accomplished what he set out to do.” [See also speech March 17, 1975 for more on this general subject]
Early 1974, Copy of typewritten transcript of one of the “pep talks.”
Packard opens by saying that “…the thing I want to say to you today is something that you all know, but it’s so important that we’ve just got to get back and keep this in the forefront of our thinking and everything we’re doing. Our job is to generate an adequate return on our equity to finance the growth of this company as we move along. Now, you don’t do that as a direct management action, so I want to outline the specific management actions that are your responsibility and which, if done properly, will result in this end result we’re talking about.”
He says that the first responsibility managers have is to “control your profit as a percent of sales, and you have in this area, three specific ways by which this can be done. The first one is pricing….I was shocked to find some places in the company where we came out with a hell of a good product, and where people had failed to price it in order to make a profit on a current basis. They got into the same goddam trouble I used to have when I was on the Board at Varian that they were always going to make a profit manana, thinking they could get their costs down, and they never could, and they never did, and I found some of that in our company here.
“So I want to just say to you that when we talk about pricing, I expect this pricing to be done in a way in which it’s going to pay off the first year of that product and not when you think you’re going to get your learning curve down where you think it’ll go. I’ve seen this happen over and over again….[pricing] relates to the thing that I talked about earlier that getting a market share is not an objective and if you’ve got to price your products too low to generate a profit to get an adequate level of business, you’re making the wrong product, and you’ve just [got] to get that through your heads when you’re talking about pricing, and I know that most of you know this.”
Packard says that “…we’ve been doing this job right for the last 10 years, the last 20 years. There’s absolutely no reason why we can’t continue to do it right, so what I’m talking about is not any unusual requirement, I’ve just been talking about what has been done and what most of you fellows have been [doing], we just got off the track this last year.”
Referring to the federal price-controls that have been in effect, Packard says he expects these to end by May of 1974 and he asks “everybody to go back and look at their pricing in terms of what I’m talking about today and be prepared on the first of May to take such actions as are necessary to get us back where we ought to be.”
The second management action which influences profit as a percent of sales Packard says is “project cost control,” and he goes on to say that the record shows that “the cost of goods sold has in fact over a long period of time been kept under good control.” So, without further belaboring the point he goes on to the third management action that affects profit – “…all of those things which you bring into the general term of productivity.”
Packard says productivity includes such things as “using better methods, better equipment….It includes motivating your people. All of you, you know all of these things, and you know, generally speaking, what to do about them, and these things are extremely important.
“The other action of management that is necessary to achieve this return on assets which is absolutely essential for the future of success and even survival of this company is in the management and the conservation of this company’s assets, and this, of course, is where we fell down very badly. Accounts receivable I’ve already talked about. That’s your job; that’s not somebody else’s job, and it’s your job to see that this gets done and we just didn’t do that last year. Everybody thought that was somebody else’s business, and I even found some cases where a salesman had gone out and, in order to get a sale, told a customer hat he doesn’t have to worry about when he pays his bill. Well, I’ll tell you, that’s not going to happen very often if I find out about it again, but those are the kinds of things we just can’t tolerate, and it comes back from this idea that we got into our heads that getting a share of the business is important. A share of the business is no concern of yours whatsoever.
“Proper profit on assets, the return on assets, to pay for the things that we all want to do together is your concern. We’ve talked about inventories, and I have no doubt that we’ve got a lot of people who are working pretty hard on inventories and doing what they thought was the right thing, but it’s you fellows who have the overall responsibility to provide guidance and direction and to be sure that these things get done and the performance on inventories in 1973 is a performance we cannot afford to duplicate. Another year or two like that, and we’ll be right where Peter Drucker says all your other growth companies are going to be, and that’s just exactly what’ll happen to us.”
Another area Packard talks about is the cost of plant and equipment. “We don’t have to have,” he says, “every goddam thing we’re doing gold plated, and we can find places where we can save money and we can get the job done just as well, and we’ve asked Ralph Lee to go back and ask each one of you to go over your capital budgets again to make sure that you’ve got only those things that are necessary and only when they’re necessary and to see if we can’t trim out a little fat there, and though we’ve had some bad experiences, we got some equipment in here that didn’t work right and all kinds of problems, but if we didn’t have problems, we wouldn’t need capable people to manage this company, so that’s why we’ve got smart guys like you responsible for this job because there’s problems, and these problems have got to be solved, and they’re your problems and our problems. So I guess that’s really where I came out – that our management team failed in just about every count that I would call a measure of good measurement in 1973.”
Packard says he has not yet touched on another area – “and this is one which again you know – we had an awful lot of surprises that came up at the last of the year. Looking over the statements, we’ve got an awful lot of accruals. I always felt that whenever I was working on this job that you’re supposed to keep track of everything that was going on as currently as possible and if you didn’t know about what was going on you better find out some way to learn, and here we found around the company there are all kinds of things that people just didn’t know about and you can’t manage something if you don’t know about it. Some of these things I’m talking about have to do with our systems and procedures. I understand that, and we’re going to go back and do some work on those things, and there are no doubt some suggestions that you people will have as to where the problems are on a specific basis, but we’ve just got to do a better job of knowing where we stand.”
Packard turns to the subject of profit growth and says he wants “to review for you how the market evaluates the price of a growth stock. If you want to loan some money, you can get about 10% on your money or that’s what we have to pay if we borrow it. Now, that’s an investment where you’re absolutely sure you’re going to get your original investment back, and also in which the earnings or dividends or however you want to measure them, will be returned to you in 10 years. In other words, this simply says that the price to earnings ratio is 10 to 1, and what that means is that you will get your money back in earnings in 10 years.
“Now that’s the precise formula that people apply when they’re thinking about stocks except obviously when you’re talking about a stock. you wouldn’t [would?] expect to get some money back a little faster because there’s some uncertainty in it, and when you’re talking about the price to earnings ratio, the traditional price to earnings ratio has been lower than the current money market. For some reason the last few years it’s gone the other way, but let’s just assume that it’s going to be the same and that’s, I think, a pretty good assumption for our purpose. It just turns out that if we can generate a growth in earnings per share of 32% per year for the next 10 years, beginning with the earnings that we had in 1973 of $1.89, the stock price of the Hewlett-Packard Company at this time should be $88, which is not too far from where it is, and this is just sort of to indicate that this is really how people figure out what the price should be. In other words, we’ve had a record of growth that’s pretty good. People took a first look at our annual report and assumed that we had an increase of 32% in our earnings this year, and that’s basically the reason that the market has been supporting a price of around $80.”
“In addition to the price being at $88 per share, assuming that this formula didn’t change very much from year to year, it would mean that the price of the stock would increase at the rate of about 30-35 a year. So, when people are buying stock, when advisors are advising people to buy stock in the $80 range, what they are saying is that we believe Hewlett-Packard company will continue to increase its earnings at the rate of about 30% per year and that this will continue over the long term. Now, let’s just take a look at what they would have said if they’d seen the performance of the company without the Data Products area. I told you that if we simply take the whole Data Products area out, that shows that we had a growth in earnings of 8%. On that basis, again with a price of $1.89, the market for Hewlett-Packard Company stock today should be $27, and we would expect it to grow at the rate of about $4 a year.
“Now if that’s the kind of performance you’re going to he satisfied with, you just do the job that you did in ’73 another year or two and you’ll be there, or you’ll be even worse.. Now, this is what we’re talking about. The market doesn’t give a damn about your share of the market; the only thing that counts is rate of growth of earnings if you’re going to be in a growth company. And a growth company is not growing in size; it’s growing in earnings potential, and this is the thing that is so important for all of us to understand and is so important to do something about because we’re just facing a disaster if we don’t.”
Packard says that “…we’ve got a hell of a good base of all kinds of things that are better than anybody else can do, a company that we can be proud of and performance that we can be proud of in every respect, and I don’t see any reason why we should not have as our prime objective that of maintaining the growth in our earnings at the rate of 30% per year. I think that’s a perfectly legitimate objective for us to undertake, and I am simply asking you to think about this and to go back in your area and to see what you can do to help us get there. I realize that this doesn’t mean that everybody can be at that place, but where you’ve got a product that is clearly ahead of the market, you’ve got to do these other things, and we’ve got to preserve our assets because if we do not do so, we’re going to have to go out and borrow some money or sell some stock, and this again will change the factor by which these people evaluate the appropriate price of the stock in the market. Both of them will tend to deteriorate.”
“I see no reason why we shouldn’t ask that of everybody. That is your objective on profits for 1974, and that is to make sure that our growth in earnings is at least equal to or greater than our growth in shipments. It shouldn’t be very hard to do that, and that’s the guide, because the summers you can’t achieve this 30% gain in market, if it’s only 10%, make sure your earnings increase 10% or what ever it is. It’s the growth in earnings that count, and it’s not the share of the market or it’s not the growth in your sales account.”
Packard gives a second objective for 1974: “…to recognize that you have a responsibility for the management of the assets of this company, and we can establish as a target here that we should be able to get at least $25 million out of our accounts receivable under operating conditions as of the end of the year. Now, we’ve already done a good part of that as a matter of fact….There are lots of things that affect this, not the least of which is to get your billings out when you ship something, and I find out that there have been people here who have been shipping products and not billing them for 8 or 10 days later. This does two things. Its adds whatever delay period to our turnover time and ties that month’s money up that much longer, but it does another thing. It gives a message to our customers that we don’t really care whether you pay the bill or not, and that’s no way to handle this proposition. You fellows have the opportunity, the responsibility, to do whatever has to be done in your area to make sure that our billings get out properly with shipments and that we do all those other things that are necessary to handle accounts receivable….This is a job for you fellows who have the management responsibility of the various divisions and units and significant groups of activities in this company. It is nobody else’s responsibility; it’s yours.”
And on inventory, Packard says “I think we should have a target of getting at least $25 million out of the inventory in terms of the operations as they were the end of the year.”
Concluding his comments, Packard takes a few minutes to stress that what is being asked “is not anything unreasonable because we have been doing the kind of a job that should have been done until this last year. If you take the period from1964 to 1973, we had an annual rate of growth of our sales of 19.2%. Now that wasn’t the 30% we’re talking about and in those days the market was willing to give you more than 10 years to get the price of the stock back. They may do that again, and it may be unrealistic for us to get up to this 30% I’m taking about, but we had a net sales gain of 19.2% and our net income increased 20%. In other words, we did increase our net income more rapidly than our sales over this last 10-year period…. Where we fell down is in the area of Marketing, Administration, and general expenses which went up 21.4% over this period per year compounded as contrasted with a gain in sales of only a little over 19%.”
Packard suggests that “…maybe in talking about a 30% growth, this is more than we can expect. Let me go through some calculations on a 20% growth,. If the market gives you 10 years to get your price back at a 20% growth, the price of the stock today would be $49. If they give you 12 years to get it back, the price would be $74, so that I think that if we can in fact over the long term maintain the kind of performance we have in the past that we can do the kind of a job our stockholders expect us to do, but it’s going to require a job that was not done in 1973.”
Packard brings up one more subject – cash. “Bank reconciliations are afforded a low priority,” he says, “and in some entities, such accounts have not been reconciled for several months.
“Does that sound like anything you fellows learned in business school or learned in studying business management,” he asks Is that the way to run a business—not paying a goddam bit of attention to whether or not your bank accounts are reconciled? Now you may not have any here, but if you do, I hope you’re listening.”
“So, that’s the message, gentlemen, and I’m sure we can get hold of this problem. All I ask of you is let’s forget about this share of the market nonsense. I don’t know where we got onto that, but it’s the wrong thing to be talking about. Let’s get back on the fundamental principles of management that have worked well for this company in the past [and] that are going to work well for the company in the future. This is not anything that is unreasonable for Bill and me to ask of you gentlemen.
“I’ll be glad to answer some questions.”
10/25/88, Letter from PR Director David Kirby to the HP Archives, telling of Packard’s “pep talks.”