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US Government May Not Approve Sale of IBM PC Unit
andy1307 writes "Xinhua, among others, quotes a Bloomberg report saying the Committee on Foreign Investments in the United States, or CFIUS, might block the sale of IBM's PC unit to Lenovo over national security concerns. CFIUS is made up of 11 U.S. agencies, including the Department of Justice, the Department of Homeland Security, and is chaired by the Treasury Department. They are concerned Lenovo employees might be used to conduct industrial espionage. The Bloomberg story said members of CFIUS were focusing their attention on an IBM facility in North Carolina of the United States. The same article says IBM hasn't produced its own PCs for several years and that the bulk of its production is done by manufacturing partners, largely in China. In the past, CFIUS has blocked the sale of Global crossing to Hutchison Whampoa because it would have meant Chinese control of the undersea cable communication network."
There is very little good that come out of government meddling in the affairs of private companies when no one is being harmed. IBM wants to sell, Lenovo wants to buy. No harm, no foul.
The Chinese are not the Red Menace they are made out to be. If anything, they are about as far from Red as you can get. More a yellowish-tan... But they are capitalists through and through.
It's funny, the land of freedom and capitalism is taking steps that would make a communist plutocracy proud.
I encountered this IBM facility almost two decades ago by accident, when making a wrong turn. It had some innocent looking name like "ibm education center" or similarly meaningless and harmless sounding name, and was huge, all of it spread far back from the highway. With the security vans and cameras and other things all around, it did not look at all like what the sign might suggest. Also, from the moment we made the turn into their lot, to the time we exited and for awhile down the highway, one of their dark security vans followed us everywhere we drove. It gave the impression in many ways of...something "more interesting" going on there. And this was around 89.
First of all the : " unnamed sources "familiar with the matter" Might be wrong and just trying to stir some trouble. Lets wait until the "final" decision shall we
Secondly The US government need its INTEL upgraded , serioulsy , every computer parts ever made this days have some components made in China. ( welcome to the reality )
They already make the IBM computer there
The US actually today make no ( as in zilch , zero , nada ) computer part whatso ever on its own
All there going to end up doing is look like fool for no obvious reason and going to hurt one of there own company and maybee bring them into bankrupty
And could even close the enormous Chinese market to all the others from the US
I am a REAL American from Canada , not a wanna-be from the country , self called "last remaining superpower" "of America
Computers are all made in China anyway! We don't build cars in America, we don't grow food in America, we don't even do tech support in America, we don't make steel in America, we don't make clothes in America and we're busy moving all our jobs that pay well overseas! When exactly did this kind of behavior become a "national security problem?" instead of good business? I mean I know all those people who used to make textiles in the South all just went right out and got themselves a degree after the mills closed - what, you say they weren't smart enough to do that?
Then WHAT THE HELL is left for them to do when all those jobs are gone except cook meth in their trailers? Or become religious terrorists?
Vote Quimby!
sticking your finger in the leaking dike or singling out a grain of sand from the beach. It's already too late. We have exported a majority of our technology to China already, which of course is being copied, therefore, saving China billions in R and D. America's greed has sold itself out.
Before you flame me, yes, I am a patriotic American, however, I am not blind to what is happening. America is going down the path of Rome. Just give us more bread and circuses. Football is more important than academics. Money is more important than ethics.
Computers, at least at the PC level, are a commodity good that are produced with very narrow cost to sales price margins. This makes them very similar to toasters, coffemakers, small refrigerators, etc. IBM wants to sell its PC unit because it can no longer compete or doesn't want to continue expending the energy and resources it takes to compete. This competition arises from the fact that there are any number of other producers in the market turning out computers which are almost indistiguishable from the ones IBM is producing. Some of these other producers are in China. So, it appears that this ruling would stop IBM from selling to a Chinese firm a capabilty other Chinese firms already possess and which is causing the market pressures that pushed IBM to consider the sale in first place.
Where in all of that is a national security concern?
Bureaucracy loves company.
There is nothing in the PeeCee division of IBM that might harm the USA that China doesn't already have.
Sell them* the Panama Canal, no-problemo! Let IBM get a foot in the door in China? For anyone who has bothered to read the details of the deal, IBM will make out like a bandit and USA will be in a better position to spy on the Chinese!
*Surprised it's not being called Wampo-Canal by now.
Are they worried about Lenovo employees(presumably Chinese) spying on the companies they sell laptops too? for e.g., if a laptop from a defense contractor is sent to a Lenovo facility for servicing, are they afraid the Lenovo employees might get some information they shouldn't be getting? Aren't IBM laptops serviced by third parties anyway? Where exactly is the potential for industrial espionage?
Hardly #2, but the USA is nevertheless waking up to the fact that China is catching up technologically at a much faster rate than anybody had expected. Soon enough the Chinese will have reached a point where they can threaten the USA militarily using Chinese developed technology based on technological transfer from Russia, W-Europe and the USA it self. Greedy corporations outourced work to China and with they exported the technology China needed to develop better and better military hardware. This sort of a panic reaction is simply a belated reckonition of this development. Expect the Chinese to field Submarines, Tanks and a Stealth aircraft capable of competing with the F-35 within the next 20 years or so and its surface fleet will become a serious challenge to the USN in the Pacific.
Only to idiots, are orders laws.
-- Henning von Tresckow
They could have put $13billion into Euros 12 months ago, with the dollar dropping 20% they could have made a hell lot more, but its more fun to run a company than watch a spread sheet.
But what else is IBM going to do with $13b? Make an OLED factory? they already have access to large amounts of cash, its not like they CANT FIND $13b, they can.
Liberty freedom are no1, not dicks in suits.
A) Talks about China censorship in relation to Google
B) Doesn't think that the government may have another reason besides the obvious clap-trap for blocking the sale
With everything going on in the news, does anyone believe they would block the sale of IBM over something as trivial as industrial espionage? Many of you have pointed out the plethora of other companies that are based overseas, but yet fail to see that something else maybe behind the "rumored" blocked sale of IBM to Lenovo. Take of the blinders and take a look around.
Bullshit. I had a Thinkpad 350X manufactured sometime in the early 90's that finally, *finally* died in 2002. IBM PCs are scrap as soon as they leave the factory? Yeah, I don't think so.
Condemnant quod non intellegunt.
China can always threaten to stop buying up US debt.
And do you know what the effect of that would be on China? It's a complicated subject but one of the reasons China keeps such large currency reserves is so they can protect their currency against speculation. China has something around $500 billion in US currency right now. This large reserve helps them maintain their currency's peg to the dollar. Its more complicated than this, but essentially they are taking dollars out of circulation thus increasing demand for dollars (less supply -> price increases). This makes a dollar "worth" more, relative to the Renminbi, and makes Chinas exported goods more attractive.
Without a large currency reserve, speculators would be tempted to bet on the currency and China could be forced to float their currency which would cause an instant recession, probably worldwide. Think speculators couldn't do this? George Soros became famous for making $1 billion in a single day by betting on the devaluation of the British pound and forcing the Bank of England to float their currency. In fact speculation is how the 1997 Asian Financial Crisis started. The Thai government had a speculation attack on their currency and were forced to float it, resulting in immediate devaluation and a region-wide financial crisis.
It's not that easy for China to just stop buying dollars. The media tends to paint it as a one sided deal but China is just as dependant on the US, if not more so. Without the US buying all those goods, China's economy goes in the toilet.