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New Management, New Views?

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By agoldenlady
December 26, 2001

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Mike - when one looks at your last 10 posts they can see that your wife works at Lowes. Are you questioning the current management at HD because you are thinking of investing or she is thinking of jumping ship. Or could it be you are trying to run up your Lowes stock?

The picture of Nardelli's management style has become much more clear than it was a year ago when he took over. Now that the "grieving" process surrounding Arthur's departure is over, (and due to the emotional character of operating HD it was like a death in the family), Nardelli is finally being recognized as the sharp, get-it-done-now, business leader that he is. One has to remember that he was handpicked by Bernie, Arthur and Ken Langome to lead this company into the next decade.

Yes, there has been a lot of anguish and some good people have chosen to leave or been "asked" to leave (at all levels). But the stock is strong and our bottom line and financials of HD are excellent.

As for employees, for the first time in HD history every employee received a $25 gift card for the holiday. Cost to HD $8million. Beats a turkey or ham, and each store has received money to have an in-store party for the employees and a guest. In a year where many companies have held raises to zero or actually gave "negative" pay adjustments and the Consumer Price Index showed only a 1.9% increase, my store just went through a review cycle with a 2.98% average increase. Not everyone received an increase, through, only those who had the performance to support it.

Is Nardelli asking for more from managers and employees? You bet. Since his tenure began we have seen a lot of changes, but many of them (like SPI) were already planned before he took the reigns. The best I can do to explain this change is to have you visualize a large expansive, fast-growing tree. In order to survive and continue to flourish it needed some serious pruning. It required a chain saw, not loppers. But the new-growth is beginning to flourish...look at the current stock price. I am an investor in HD for the long run. It is a stock that pays a good dividend and has a very strong set of financials. I am also an hourly employee who has been with HD for nearly a decade. I have seen many, many changes over the years and what is happening currently IS for the long-term benefit of HD. Is it the same company it was when I joined? No, but then again what else is the same as it was 10 years ago? Is it better or worse? It's just different. If one can adapt to the changes in HD and the overall economy, it is still a great company. If they cannot, than perhaps they should explore other opportunities.


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