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NYT: IBM PC Division Sold To Advance China's Goals
theodp writes "Back in 2005, Wharton's Michael Useem speculated that IBM's sale of its PC Division to Lenovo was more about ingratiating Big Blue with the Chinese government than getting top dollar for the assets. 'Government relationships are key in China,' Useem explained. Now, a NY Times article on outgoing IBM CEO Samuel J. Palmisano seems to confirm that Useem's analysis was spot-on. From the NYT article: 'In 2004, I.B.M. sold its PC business to Lenovo of China. Mr. Palmisano says he deflected overtures from Dell and private equity firms, preferring the sale to a company in China for strategic reasons: the Chinese government wants its corporations to expand globally, and by aiding that national goal, I.B.M. enhanced its stature in the lucrative Chinese market, where the government still steers business.'"
For once, a CEO thought beyond the next quarterly report. Be careful what you complain about.
So. You suggest to complain about neither China, nor CEOs, nor about IBM. You're taking the fun away from my daily engineer's life !
Religous speak to God. Insane are spoken to by God. When all shut up, one can finally hear Shostakovich in peace
There's a book by Roger L. Martin called Fixing The Game which argues that the problem with large businesses today is that they are focused on the expectation market--maximizing shareholder value--as opposed to the real market--making good products and increasing customer satisfaction. For example, Enron was so focused on shareholder value that they manipulated revenues to increase stock price, while Apple was so focused on products that Steve Jobs was infamously dismissive the importance of his company's shareholders and joked that the one thing that kept him up at night was shareholder meetings.
They're implying that IBM took less money for it's asset to curry favor with the chinese. That would only make sense if IBM got more money then the difference between the two payments over time as a result of that good will.
Has that happened? I don't know... I think American business might have been too brash in it's oriental investments. Most of them seem to be backfiring in alarming ways. We seem to have taught our chinese business contacts just well enough to start competing with us directly where before our technological edge made that impossible.
In any case, it seems like many of the US multinationals have woken up to the issue. We'll see what happens.
I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
Palmisano was not well liked within IBM. He was after all the guy who told IBM's US employees they could take a job in the third-world at third-world wages or stay in the US and get sacked. For this Palmisano will be forever despised.
http://www.infoworld.com/d/the-industry-standard/ibms-palmisano-techs-slumdog-millionaire-257
Sure, the business press has wet dreams about Palmisano and Gerstner who picked him as his successor:
http://www.forbes.com/2011/01/03/forbes-india-person-of-the-year-sam-palisan-ibm.html
But the truth was really quite ugly. You won't read this in Forbes, but you will read it in - of all places - the reader feedback at Amazon:
It is strangely ironic that, after doing his best to suppress all negative communication within IBM, it should be the reader feedback on amazon.com that alerts Gerstner to what the world at large really thinks of him.
In the last five years, Gerstner has reaped a profit of [$$$] million in the sale of awarded stock options. These stock options were awarded while he held the joint positions of IBM CEO and chairman. During that period, IBM spent [$$$] billion buying back its own stock to drive the price up so that executives could cash out at handsome profits. This is money that could have been spent on developing new products, attracting new talent and honoring promises made to employees and retirees.
Where did all that money come from?
Not from profit growth, which remained flat at about 2 percent per year when you strip out the retirees' pension fund surplus "vapor profits."
It came from selling off large chunks of the company and its assets, laying off tens of thousands of employees and slashing pension and health care benefits for employees and retirees. In 2002 alone, IBM has quietly cut 15,000 jobs. Health benefits, which were promised "free for life," now cost retirees a substantial amount of their pensions. Only one minuscule cost-of-living increase has been awarded pension recipients in the past 11 years.
The greed doesn't stop there. Now, Lou had not only been retained as chairman of the board, he has been awarded a 10-year consulting contract, with fully paid expenses at his previous salary of $2 million a year. These expenses have been conservatively estimated to be $100,000 annually.
Save IBM? More like turning it into just another money grubbing corporation while lining his pockets. I would love to see a rebuttal book. God help us all if Lou's management methods become benchmarks for future corporate leaders.
http://www.amazon.com/Elephants-Dance-Inside-Historic-Turnaround/product-reviews/0060523794/ref=dp_top_cm_cr_acr_txt/185-5256096-7601530?ie=UTF8&showViewpoints=1
I think that, at this point, China is fascist, not communist.
WTH are you talking about? GM is perhaps the biggest of the China success stories.
"GM sold about 1.83 million vehicles in China last year [versus] 2.07 million cars and trucks in the U.S. But GM, already the leader in China with 13.4% of the market, is still gaining share. GM's market share was 11.3% in 2008."
http://money.cnn.com/2010/01/12/news/companies/gm_us_china_salesrace/index.htm
Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
Communism depends heavily on the people picking up the slack being within striking distance of the slackers.
paintball
Fiscal policy is one way to direct growth in the economy. Infrastructure projects, especially, provide the most bang for the buck in terms of value for money. The only problem is that infrastructure tend to require maintenance which means future funding is in essence commited. Social programs are also useful to ensure what is most fairly termed as equality of opportunity, to help alieviate the inherent unfairness of wealth distribution. It is not fair, as a matter of fact, to deny opportunity of advancement due to ones situation at birth. This is why we spend money on things like education so that we have a more inclusive society where advancement is based on merit, and not solely on whether you have the means to pay for advancement.
Monetary policy is another way to direct growth although it tends to result in bubbles when the interest rates are very low levels to spur investments mainly fueled by debt. When money is essentially cheap, banks and investers tend to do stupid things with all this surplus cash flowing around - like making mortgages to people who they know can't afford it (and then selling the mortgages off at a profit to relieve themselves of any risk), or private equity making leveraged buyouts incurring a large debt on the target company which brings on unsustainable interest payments when the money markets dry up.
Back to fiscal policy, the problem with the US is not that it is spending too much (compared to other advanced economies). It is mosty because public spending in the US is notoriously poor value. For example, the US spends ~8% of GDP on just Medicare and Medicaid, covering only a small proportion of the population. In total the US spends nearly 16% of GDP on heathcare. The UK for example, spends only 8% on its healthcare system that covers everybody, at all ages.
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My reading of history convinces me that most bad government results from too much government. - Thomas Jefferson
Don't believe everything you read on the internet. - Abraham Lincoln.
Ah, this old piece of copypasta. I've seen this one before. It's been circulating on conservative blogs for years, and sometimes even making its way to a news site. There is a small problem though: It's utterly false. Nothing but a piece of self-serving propaganda written to tell a target audience exactly what they want to hear: Communism makes people so lazy they'll starve, while a free market fixes all. The story actually originated in a publication called 'The Free Market' in 1985.
For one thing, it fails the common-sense test. In a colony on the edge of starvation, so you really think people are going to just laze around and not bother raising crops just because someone else might get to share them too? People are not that stupid, and most of them dislike starving to death. Like all really good pieces of propaganda, it is half true. The Plymouth colony was indeed founded on an initial seven-year collective-property system - that was a standard practice at the time, a simple practical way to deal with the extreme supply shortages in a new colony. After all, you can't run a farm if the owner of the plough refuses to let another use it, and you can't hope to build individual houses for every colonist before winter sets in and kills everyone. It was usual to share all non-trivial property long enough to get everyone settled in, houses built, tools made and industry established. Similarily, there was an initial food shortage. The mistake is in attributing the latter to the former. The actual reason was rather less interesting: European farmers, most of them not even very experienced, with unfamiliar crops and weather far worse than anticipated.
Look at the numbers. The great die-off was in the winter of 1620-1621, during which 45 died from a population of 102. That is the event of which your account speaks. Yet the ship only arrived in december 1620 - if, as you claim, the problems were caused by the use of a temporary collective ownership leading to a lack of hard work than the effects should not have been felt until the following harvest, rather then immediatly upon arrival. Unless you wish to suggest that people were standing around in the snow refusing to build housing because they wouldn't fully own it afterwards, which strikes me as unrealistic.
And of later events? Wikipedia has some figures on the growth of the colony:
December 1620, 99
April 1621, 50 (The first winter of which we spoke)
November 1621, 85
July 1623, 180
May 1627, 156
As you can see, once that first winter passed the colony florished - growth was rapid, and no food shortage around. In fact, this was a florishing economy: In november 1921, almost exactly one year after the arrival of the Mayflower, the Fortune arrived with more settlers - and departed with a trade goods exported to pay off the investors who funded the settlement. Doesn't sound like a communist nightmare to me.
The final damning line comes from your own testament: "The failure of the experiment of communal service, which was tried for several years." Several years. Yet the colony was already passed the intitial winter deaths and running successful exports after only a single year from the arrival of the mayflower - which means that, by the account you use, that great success was achieved *before* the abolition of collective ownership!
So while socialism may not have been the perfect solution for Plymouth, it wasn't an utter disaster either. It worked, for a time, well enough to get them established, growing and exporting.