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U.S. Approves IBM/Lenovo Sale
MartinB writes with the "Committee on Foreign Investment in the United States (CFIUS) review result: unanimous approval for the sale to go ahead, with no further external approvals needed. No compromises were required over the location of Lenovo facilities in sensitive research areas, nor were limits put on Lenovo's ability to sell PCs to U.S. agencies."
Happy times are here again.
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The Committee on Foreign Investment in the United States (CFIUS) approved the sale of Slashdot to Elbonian investors. New color schemes will be in earth tones. "Yes, different colors of mud!", stated one of the eventual new managers of the enterprise.
A feeling of having made the same mistake before: Deja Foobar
The x86 is done.
As I understand it, this sale is more of a few-years lease.
Orgnisations with bucket loads of money get a decision they want. Film at 11.
Beep beep.
THis was only on the "security" issues...
In truth, most all of the materials are now made in China, Taiwan, Korea, Malaysia, etc.
So in such light PC and component manufacturering really doesn't pose a "security" risk. Which is what this was ALL about.
The jobs aren't there to begin with...so no worry over loss of jobs moving to China.
You don't have to be Carnac to guess most motherboards, CD drives, DVD drives, PSUs, cabinets and wiring is already being manufactured in the PRC.
Chances are the keyboard and mouse you used in your posting, as well as the screen you are viewing, came from there as well.
i for one welcome our new Lenoverlords!
A feeling of having made the same mistake before: Deja Foobar
I'm surprised that they even thought of stopping the deal. I've always viewed USA as a country that tries very hard to support businesses.
Um... "Sound business decisions" in a business sense are all about making money. If this "decision" puts money in the fatcat's pockets then it sounds like a "sound business decision" for him.
In the larger market sense it may or may not be a good thing, but that certainly depends on your POV. However, I disagree with the prevailing sentiment here that all mergers are inherently evil and motivated by monopolistic greed. Sometimes the logistical considerations are such that a merger can benefit everyone.
What will become of the beloved Thinkpads? Will Lenovo continue to maintain the same level of quality that IBM has?
More interestingly, I'd be interested to see if IBM started producing affordable powerpc laptops and desktops running Linux. It seems Microsoft can no longer wield the Windows tax against IBM.
The article is ~ 5 minutes old, and there's 10+ anti-china/america sold out posts already.
China and Taiwan ~already~ mass-produce the vast majority of systems components, their final assembly was pretty much the only remaining domestic manufacturing process. Also, IBM is being VERY wise in this regard, cashing in a unit that has very little future projected revenue growth and miniscule profit margins, and will gain the capital for some future expansion. PCs are a commodity business, and with the exception of Dell are probably a loss-leader for most companies now (e.g. IBM, HP/Compaq).
This is a wise business move by IBM, and it was wise for the US gov't to involve themselves in the sale. The technology is 20+ years old, the industry is commoditised, and its all open-standards based... there is no strategic threat here.
John Maynard Keynes: "When the facts change, I change my mind. What do you do?"
Does this deal leave IBM free to persue building a new PC based on Cell Processor and/or PowerPC technology, instead of the increasingly less efficient x86? If so, selling off the trailing edge x86 business would just be a smart business move, wouldn't it?
I've abandoned my search for truth; now I'm just looking for some useful delusions.
IBM is faced with the same dillema HP faces.
The only way to make money in the PC biz is by selling directly to consumers, bypassing the supply chain of stores, merchants, etc. But this conflicts with, among other things, IBM's consulting business which relies upon dealing with people, building relationships, rubbing backs, etc., etc.
HP faces a similar problem. The only way for them to make money in the PC biz is to sell directly to consumers. But this conflicts with their need for pushing printers and printer supplies which requires using the supply chain.
Instead HP is shedding money with their PC selling business and not doing so well in the printer biz. Good job Carly! But I digress.
Let the Chinese have the fun task of competing head on with Dell, IBM will do what they do best.
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American Manufacturing died to day after a long illness. Repeated attempts to save American jobs and secure a domestic manufacturing base in case of war were repeatedly rejected by the new American ruling class who no are no longer responsible to a once powerful American middle class. Spokesmen for the powerful said that the death of manufacturing promotes growth, despite the fact America had higher growth rates when it did manufacture things. In related news, illegal immigration and guest worker visas rose dramaticly and new tax breaks for the super wealthy were enacted. Stay tuned to official news sources like the New York Times and Fox News and don't bitch.
P.S. doesn't China have at least 4 different dialects and regional cuisines?
I've abandoned my search for truth; now I'm just looking for some useful delusions.
Windows isn't really done, but this was my thought when IBM put their pc business up for sale. Back in the day, it was this group because of pressure from Microsoft that would put up internal ibm roadblocks to their own OS/2. I imagine they initially weren't that friendly to Linux, either. Dumping this low-margin business though has the added benefit of letting IBM focus on their hardware and services. If IBM wants to sell Linux, OS/400, Windows, etc, there's not much msft can do about it legally or otherwise now.
Yeah, they probably don't actually use MSG in all the restaurants over there. You will probably notice the food looks a bit more rustic than the local Ho-Lee Chow or a can of La Choy.
The BBC has been carrying a number of analysis articles on China, where the economy is booming and where it isn't. Still shooting for 7% growth this year and they'll probably make it, while the rest of the world scrambles to sell them raw materials. Notice mining and steel companies are suddenly hot items?
A feeling of having made the same mistake before: Deja Foobar
So IBM developed the PC and brought the current rendition to market. Fortunately for us and for all PC users they allowed their designs to be copied (clones anyone) thus putting apple forever in the dark. Since they did this, market forces have determined that IBM should no longer be in the PC business. Frankly, who cares? There are thousdands of other businesses that makes PCs now. The only reason I would care is if Lenovo gets the IP that encompasses the PC they may try to charge royalties for anyone using their IP to make a producat (go frivalous patents!).
I am d3matt
So, does this mean that IBM is finally out from under the Microsoft joint-development agreement, that dates back to the days of the original PC and PC-XT?
Chip H.
However, I also disagree that share price should be taken as the only metric of company success. Any single metric that becomes too dominant will imbalance things and have ultimately negative consequences. In this specific case, I think it's part of the general hollowing out of American industry and strengthening of Chinese industry--which mostly reminds me of what happened in America before the Civil War. The South became a militarily-strong, industrially-weak debtor.
From the more narrow perspective of IBM, my main concern is that this deal could weaken IBM's "empathy" for customers in lower-margin businesses. Unfortunately, the way the numbers work, most companies are average or below by any specific metric, which in this case means that most of IBM's corporate customers are involved in relatively low-margin businesses. IBM won't share that situation with them after this.
One more thing in the "other values" category. For example, one of IBM's other non-share-price values is "supporting diversity" by deliberately hiring many kinds of people. Well, I think that "supporting commodity computers" is also a value that was worth supporting and something that benefits a lot of people, even if the profits are slim. However, in IBM's specific case, all of the high-margin businesses depend on computers, so there's a strong and direct benefit from that support...
Freedom = (Meaningful - Coerced) Choice != (Speech | Beer^2), and sad sock puppets' bad mods avail them naught.
I don't understand the negative reaction. Production is no longer in the US, but that is not where the money is. IBM realised that they could make a lot of money (and, incidentally, create a lot of relatively high paid, relatively pleasant jobs) by abstracting further up the value chain, to supply services and consultants. It matters not a fig to most companies who provides their computers, but many large companies cannot operate without IBM services. So we have a company that no provides high skilled, high payed jobs to the US workforce instead of low payed, low skilled manufacturing jobs.
Yes, but for generations the USA business support was dressed up in attacks on Communism. IBM is a symbol of American business (the "B" stands for "Business") - selling their PC biz to a Chinese company is a little strange, in that light. But it really just shows how "Communism" and "Capitalism" are just the ways to describe how governments do business, which would be an unacceptable mix in a pure version of either system.
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make install -not war
The IBM/Lenovo sale is IBM's strategy to sell past China's protectionist trade barriers. It's gotten wide support because it's probably unique in requiring the Chinese company to move some operations to the US, to allow IBM to use them to reach the Chinese market with the rest of their products and services. It's kind of odd how your pro-globalism post bashes people suspicious of IBM sending essential industry to China, but doesn't complain about those Chinese protectionist barriers. Is your "globalism" really just a cover for a culture war you prefer to actual free global trade?
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make install -not war
"We Delivery"
I thought that IBM laptops were already being built in China. So any informal "technology transfer" would have already been going on. This is just selling them the business side of the operation. What, you're worried that they'll learn secrets American shady accounting practices and stock manipulation? Where the hell are they gonna outsource all their jobs to to pump up their stock?!!!!
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
The word is IBM is using the Lenovo connection to get into the China market. And from the whole WAPI thing, the Chinese government might just be anti-western-dominated-standards enough to support a POWER-powered desktop on the mainland.
At least that's what we're planning for the huge flag on the side of the building to greet our new Overlords.
The funniest irony of all was that the PC Division, that rathole they poured billions down which rarely if ever made a profit finally made a huge chunk of change selling itself off and as a result those employees are getting the largest bonuses in the company, on a division by division basis. Lesson learned? Fuck your business up until someone buys it at firesale prices then claim a huge a victory, rake in your pile of cash. All the other IBM divisions should learn from this.
I traveled to China recently. I'll say this: Chinese food in the USA is nothing like real Chinese food.
I particularly remember some sweet/sour chicken I got there. In the US, you get these pretty nuggets of white meat and sauce on them. In China, you get... well pretty much the whole chicken. It's like the took the whole thing (minus the feathers and major organs) and chucked it into a shredder. Spinal cord and all.
It was an odd experience.
One of the best meals I had there was Kangaroo Tail.
Lots of metrics, though the obvious one is political donations--and to the best of my knowledge IBM does not donate to political parties or encourage employees in any way to donate
IBM doesn't have a PAC, which is probably a good move since typically these organizations end up donating to both sides to hedge their bets. But it does participate extensively in lobbying, which I see as just as bad as campaign donations, and have less oversight.
However, I also disagree that share price should be taken as the only metric of company success.
I agree, since share price is more a representation of sentiments of how the company is perceived, rather than a metric of actual company health. However, the shareholders are the ones in charge, they are the ones the CEO has to please. You need to balance, running the company, and not disappointing shareholders.
In this specific case, I think it's part of the general hollowing out of American industry and strengthening of Chinese industry--which mostly reminds me of what happened in America before the Civil War.
I see it differently, the South never changed, it stayed with it's cotton fields taking advantage of its supply of cheap labor. The north changed, gave up the lower value items for the south to produce and focused on higher value industries. In the 70's and 80's electronic manufacturing moved to asia to take advantage of cheaper labor markets, and the US focused on using the cheaper goods for more value added industries such as software. As software is becoming a commodity and being outsourced, domestic companies can focus on more value added activities such as consulting.
D6 63 0D 70 89 81 BB 8E 7B 7C 5F 5D 54 EA AB 73
I hate this, now the Chinese are digesting our good companies, and we're letting them.
Debugging? Klingons do not debug. Bugs are good for building character in the user.
I agree with those who view this as a smart move by IBM. Here's why:
... but I digress.
... anyway, that's hopeless speculation. Although, economically we are similar to Rome militarily. ... but now this is just the rambling of an IT guy who majored in History.
1. They sell a branch of the company that was often losing money for cold hard cash.
2. They get 19% of a Chinese company, giving them a way past China's trade barriars. They get a headstart on everyone else providing high end technology services to a booming Chinese economy that lacks said expertese and has the means to pay for it. Meanwhile HP languishes under two divisions of PC manufacturing (HP & Compaq.) Way to go Carly
3. Did I mention that this gives IBM a way to sell products and services to the Chinese? Potentially billions to be made before the Chinese technology providers mature to IBM's level. (Note: I'm not saying that China lacks intelligent people, it's just that the US/Western world has spents decades longer training thousands more techs. It won't take them long to catchup though.)
4. If the US screws up their economy too bad IBM has a lifeline! I really hope that letting the dollar fall in value helps with the trade gap and makes it possible for US manufacturing to pick back up. I do not think that the US economy will crash in 10 or 20 years. I do worry that it will crash in 50 to 100 years. I also fear that the US will decide the best thing to do is plunder a few countries via conquest with their surplus military equipment
The Romans were so confident in their legions that they stopped inovating. After all, they conquered everyone worth conquering, right? Wrong, they got beat by wandering nomads who actually fought differently than the Romans were used to: how dare they?! Western based companies, often spear headed by American companies, have dominated the economy for fifty years now, but people are starting to play by their own rules. Will they be able to compete or will the 'barbarians' decimate their legions with unorthodox tactics. I honestly hope something in the middle happens
IBM for one welcome our new Chinese laptop overlords.
Your CPU is not doing anything else, at least do something.