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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."
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
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.
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.
2 years and no mod points. Join reddit. Because openness is good.
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.
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
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
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