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US Government May Not Approve Sale of IBM PC Unit
Posted by
samzenpus
on Tue Jan 25, 2005 06:00 AM
from the not-at-any-price dept.
from the not-at-any-price dept.
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."
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Business ought to be left alone (Score:3, Interesting)
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.
Re:Business ought to be left alone (Score:5, Insightful)
There is no connection between the first sentence and the second. In order to determine if there is any harm or not, a lot of factors need to be considered, mainly related to whether or not a company will increase what economists call "market power" and will get closer to a monopol status.
>> It's funny, the land of freedom and capitalism is taking steps that would make a communist plutocracy proud.
There is such a term in economy called "market power", which describes companies that have key resources and strategic positions on the market. In those cases, the "invisible hand" of offer and demand, that balances prices on the market, no longer works, because a firm is clearly advantaged compared to the others and in a position to get a monopoly status (Does Microsoft ring any bells?
I'm not saying that this is the case here; however, simply adjusting the balance doesn't mark this approach as communist. Depending on your position on the political spectrum, you might find this implication of government into the market more or less suitable. Still, no matter that, it is still far away from communist.
Parent
Re:Business ought to be left alone (Score:5, Insightful)
More likly Microsoft reads slashdot too and is worry about IBM having more power in the linux market in China so Bill called his friends in the White house and Justice department.
Parent
Re:MICROSOFT ought to be left alone (Score:3, Insightful)
It is funny though because I remember MS selling their source code to the Chinese government and then claiming during their anti-trust case that they couldn't reveal source code for "national security reasons".
I guess it is OK for the Chinese government to have access to the MS source cod
Re:Business ought to be left alone (Score:3, Insightful)
You're exactly right, when no-one is being harmed! There's a very good reason for the gummint to meddle in this affair though: national security. You guys (ie: America) have a lot of tight restrictions on export of technology to try to keep a lid on The Bad Guys(tm) advancing their technology too quickly and becoming more of a military threat than they might otherwise be.
Now I'll
Re:Business ought to be left alone (Score:5, Insightful)
"Made in China"
Whether or not IBM sells its PC business to Lenovo, the technical information is already in China as is the actual manufacturing. So if our "national security" concerns are about the transfer of technical knowledge then it's too little-too late. If the concern is about having our important technology manufactured by a potential adversary, then it is also too little-too late.
This looks more like meddling for the sake of flag-waving to me...
Parent
Re:Business ought to be left alone (Score:3, Interesting)
Re:Business ought to be left alone (Score:3, Insightful)
No offense, but there is nothing Insightful about this post. Exactly what "great knowledge" would China gain by buying this PC division?
These are basic PC's! There are no great government technologies hidden in the IBM PC division.
Oh, please. How is China harming the USA? Should we as Americans turn into nothing but fighters that try to destroy anyone that competes against us?
I am a former U.S. Marine I served during t
Re:Business ought to be left alone (Score:4, Insightful)
Parent
Re:Business ought to be left alone (Score:2)
Re:Business ought to be left alone (Score:2, Insightful)
Yes, until they decide to get mad at Taiwan and invade. And because they now have many of our tech resources and capabilities, they could slap us down one way or another if we decide to take the wrong side. Like saying they won't hold anymore of our debt, which could lead to our dollar spiraling downward and worth less than a peso.
Not to mention all of the human rights issues that China has (or lack thereof more specifically). They should never h
Re:Business ought to be left alone (Score:5, Insightful)
Parent
Re:Business ought to be left alone (Score:3, Insightful)
It really irritates me when people try to pretend like the Chinese, Libyans, Syrians, etc are suddenly beyond reproach because the US has committed some actions like theirs.
So yes, the US has human rights violations and yes, the US has invaded a sovereign nation for a lie. But that does not remove the stain of such actions on any other nation that has committed them.
Re:Business ought to be left alone (Score:3, Interesting)
The point of my post is that every time *anyone* (even some random Joe on slashdot) criticizes China as dangerous someone rushes in and says "the US is more dangerous". I'm saying that the tactic is misleading, the point irrelevant. The "morality" of the US has *nothing* to do with the "morality" of China.
Re:Business ought to be left alone (Score:5, Interesting)
You are one of those two shotgun toting psychopaths. You've already shot at least one person to prove a point (but nobody liked that guy anyway) and your colleague has done likewise a few times as well. People in the room are very worried about you.
Do you:
a) Become repentant of your sins and mend your ways and then tell the other psycho to do likewise?
b) Blow the guy's head off, before he shoots you or somebody you like?
c) Talk to him quietly while waving your gun around to stop other people in the room getting ideas? I mean, if the two of you team up you could eat all the other people in the room and not go hungry, right? Yeah, let's eat them.
I know that this view of the world is really screwed up, but if you look at world events, I think that this is the world that our leaders see.
Parent
Re:Business ought to be left alone (Score:3, Insightful)
I didn't think so.
Of course, at least the people held in guantanamo bay - against their will and without any legal proof of wrongdoing - are still alive. Unlike the (conservative, peer-reviewed estimate of) 100,000 dead people caused directly by the invasion of iraq - the vast majority of whom had done nothing wrong.
You Americans and your blatant hypocrisy make me want to puke.
The biggest menace in the world at the moment is not just red; it's red, whit
Re:Business ought to be left alone (Score:3, Insightful)
Speaking as an American... Many of us hold the same opinion as the rest of the world. We don't all approve of the war in Iraq. We don't all approve of Bush. Hell, a lot of us are absolutely disgusted with what's going on. Unfortunately, it's not like we can do much. Protest? Those don't do much. Rebellion? Yeah, that'll work... We're not all hypocritical; just some of us.
Re:Business ought to be left alone (Score:3, Insightful)
Re:Business ought to be left alone (Score:3, Interesting)
The moderators must be smoking crack - insightful indeed? Closer to the mark is insanly paranoid and raving mad about a insubstantial red menace... Oh, your from the USA, I guess that's been drilled into you from birth so you can be excused a little. Fortunatley many Americans are able to draw their own conclusions rather than spouting the nonesense they've been force fed - take a look some of them post on slashdot.
When the USA instigates illegal fore
So it begins (Score:4, Insightful)
#2? (Score:5, Interesting)
Parent
Laissez-Faire? (Score:5, Insightful)
I thought the US were supposed to be the laissez-faire free marketeers of the world?
If China was blocking US participation in their markets on these grounds, I've little doubt the US would be taking the matter to the WTO (and winning).
Re:Laissez-Faire? (Score:4, Insightful)
a. They are good at buying politicians(*Cough* Clinton *cough*) and
b. They are a major(if not the foremost) consumer of American debt. Dubya can't run his tax cut and spend government without them, so the US doesn't really make any challenges to them in the WTO.
Parent
Re:Laissez-Faire? (Score:2)
This is not about China blocking sales of US products into China, but about the US blocking sales of a US product (in this case a brand, intangable, but still a product) to China.
Ie it is a case of the US government putting up a non-tarrif barrier against US exports.
You missed a reason for the US not taking China to the WTO -- the US is one of the two top offenders against WTO rules in spirit and in letter, and so from it's glass house
We will see what China has to say about this (Score:5, Insightful)
Cheney may have said that deficits don't matter, but sooner or later, he will learn that giving the largest dictatorship on Earth a large voice in your government is a bad idea. (Esp. when you are supposed to be promoting "freedom" and "democracy")
Re:We will see what China has to say about this (Score:3, Insightful)
Wouldn't it be something that the Chinese would like to avoid at all costs..a tax hike for the largest consumer market for their products will be like a tariff on their exports.
Re:We will see what China has to say about this (Score:3, Insightful)
Could this scenario happen? It could, if the government officials keep the country running like this for a while, and do not screw it with political unstability, and we would be able to see some new rules set by China. I'm not sayi
Re:We will see what China has to say about this (Score:4, Insightful)
The US could devalue (could?!?) its currency, effectively shrinking the value of those IOUs (I mean bonds). In an extreme case, it could simply not pay and tell them to sod off; Russia and Argentina have done this before and got away with it.
Parent
Long Term cost of devaluation (Score:5, Insightful)
As a result, US Debt is considered 0-risk. It is the ONLY debt instrument in the world that is considered zero risk. Even other government debt has a small implicit risk premium in it.
Right now, the US raises money at no risk premium. If the US defaulted or increased the money supply (which would cause massive inflation and force the markets to devalue its currency... devaluation as policy requires a peg, normally to the dollar), the would cause the US to start paying a risk premium.
All of a sudden, you would have 10%-15% inflation from oversupply of money, and the US risk premium going up to 5%, for example, and now government bonds pay 15%-20%... How much do you think that your mortgage needs to be now? 25%, 30%?
Basically, the US CAN get out of its mess with massive printing of money, but the results would be catastrophic.
HOWEVER, your comment about the bank is 100% on, and I believe it is the current financial strategy. Continue to buy products from China for "worthless" sheets of paper (paying 4%-4.25% interest), then slowly increase the money supply and inflation to 4.5% or 5%, and inflate your way out of the mess. All of a sudden, the money is devaluing faster than your interest payments, tax revenues go up, and debt repayment is less painful.
Many countries played games like this, but it is normally to buy capital goods and other means of production... we've used it for consumer spending, which is why we may be in a bind.
Mild inflation is nice, but reasonable (5%) inflation) wouldn't kill us, and might be a way out of our mess.
Alex
Parent
Re:Long Term cost of devaluation (Score:3, Informative)
Currency Speculation (Score:3, Interesting)
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 increas
Why IBM need to sell (Score:5, Informative)
Personal Systems Group made $162 million off turnover of nearly $13 billion, that's a 1.2% margin. Software group made $4.5 billion from a $15 billion turnover. Hell, WebSphere MQ Series made several times the profit of the whole PC business, and that's a team of maybe 200 people. CICS made even more. From IBM's point of view, Personal Systems Group isn't worth the effort or the risk.
*http://www.ibm.com/investor/financials/quarterly/ 4q04earnings.phtml [ibm.com]
I can turn $13b into $16b easy!!! (Score:3, Interesting)
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.
When did this happen? (Score:5, Interesting)
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?
This is like (Score:5, Interesting)
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.
Topic rang an ancient bell... (Score:5, Funny)
George B.: Condi! Nice to see you. What's happening?
Condie R.: Sir, I have the report here about the new leader of China.
George B.: Great. Lay it on me.
Condie R.: Hu is the new leader of China.
George B.: That's what I want to know.
Condie R.: That's what I'm telling you.
George B.: That's what I'm asking you. Who is the new leader of China?
Condie R.: Yes.
George B.: I mean the fellow's name.
Condie R.: Hu.
George B.: The guy in China.
Condie R.: Hu.
George B.: The new leader of China.
Condie R.: Hu.
George B.: The Chinaman!
Condie R.: Hu is leading China.
George B.: Now whaddya' asking me for?
Condie R.: I'm not asking you, I'm telling you. Hu is leading China.
George B.: Well, I'm asking you. Who is leading China?
Condie R.: That's the man's name.
George B.: That's who's name?
Condie R.: Yes.
George B.: Will you or will you not tell me the name of the new leader of China?
Condie R.: Yes, sir.
George B.: Yassir? Yassir Arafat is in China? I thought he was in the Middle East.
Condie R.: That's right.
George B.: But Yassir's a leftie. Then who is in China?
Condie R.: Yes, sir.
George B.: Yassir is in China?
Condie R.: No, sir.
George B.: Then who is?
Condie R.: Yes, sir.
George B.: Yassir?
Condie R.: No, sir.
George B.: Look, Condi. I need to know the name of the new leader of China. Get me the Secretary General of the U.N. on the phone.
Condie R.: Kofi?
George B.: No, thanks.
Condie R.: You want Kofi?
George B.: No.
Condie R.: You don't want Kofi.
George B.: No. But now that you mention it, I could use a glass of milk. And then get me the U.N.
Condie R.: Yes, sir.
George B.: Not Yassir! The guy at the U.N.
Condie R.: Kofi?
George B.: Milk! Will you please make the call?
Condie R.: And call who?
George B.: Who is the guy at the U.N?
Condie R.: Hu is the guy in China.
George B.: Will you stay out of China?!
Condie R.: Yes, sir.
George B.: And stay out of the Middle East! Just get me the guy at the U.N.
Condie R.: Kofi.
George B.: All right! With cream and two sugars. Now get on the phone.
Condie R. (into phone): Rice, here.
George B.: Rice? Good idea. And a couple of egg rolls, too. Maybe we should send some to the guy in China. And the Middle East.
[With apologies to Abbott and Costello--"Who's on First?"]
Totally (Score:5, Funny)
The part I didn't get (Score:3, Interesting)
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?
Gee, can't even come up with a decent reason (Score:3, Funny)
If I were to do industrial espionage, why would I buy a PC unit? There's not much research in that. I'd go for the chip unit, the mainframe unit, or something. PC unit for espionage? Give me a fucking break. It's just assembly line, mostly, for whatever sake!
National Security Advisor failures? (Score:3, Funny)
There was a company that made rare-earth magnets in Valparaiso, Indiana. [findarticles.com] (Necessary for small strong servos in, oh... missles...) That got sold to China...
inconsistent, arbitrary law enforcement breeds contempt.
If we had a compentent National Security Council, none of this would have happened, nor would it have been allowed to be politicized.
--Mike--
Could msft be behind this? (Score:3, Insightful)
The move by IBM to somewhat re-invent the PC, starting in China, is msft's worst nightmare. A move like that could eventually make linux a serious contender against windows. Let's face it, right now linux has about 2% of the desktop market, and is largly ignored by major software developers like intuit, adobee, and autodesk.
Msft is certainly not above abusing the USA legal, or political system, in order to maintain msft's market position.
The dangerous IBM PC unit (Score:3, Funny)
Frankly, I don't see how a 25-year-old 8088-based computer would present much of a threat of industrial espionage.
Well, if they added the second 5 1/4" drive and 110 baud acoustic-coupler modem, maybe.
Dell a better target (Score:2)
Maybe it would be easier for LeNovo to purchase Dell or HP, they have all their Turing human-equivalent english speakers (sales, support) located in India, and Lenovo does manufacturing anyway in China.
Re:Hidden Agenda ? (Score:5, Insightful)
IBM support is not going anywhere. It's profitable and has a very high reputation. The main concern on the IBM side is whether or not Lenovo will stay with IBM after the transition period.
Dell does not sell IBM ThinkPad computers. The only thing I can imagine you are talking about is some kind of really screwy deal where Dell salesmen are playing some kind of marketing middleman game. Of course, in that case, I can quite well understand why it would be in Dell's interest to foul things up as long they thought they could blame it on someone else. That would also explain the rolling heads, come to think of it.
Parent
Re:Hidden Agenda ? (Score:3)
IBM DO NOT repair its PC's - all service duties lays on IBM business partners. If your company wants to get IBM business partner status to sell IBM's PC/Servers then your should have your own service center.
IBM only provides service centers with spare parts and repair informations/trainings.
All currently produced IBM PCs will be repaired in IBM Business Partnes service centers for a long time - IBM currenty offering service pack for 3+ years.
Btw: How many "laptop problems" did
Re:Hidden Agenda ? (Score:2)
heads are rolling over having standardized on IBM (from Dell)
Does it really have anything to do with service? We've been switching from ThinkPads to Dells mostly because you can get the equivalent Dell laptop for (say) $500 cheaper. You sure it's not just the up-front cost (as opposed to after-market service) that's driving things?
Eric
View your HTTP headers using this page [ericgiguere.com]
Re:Hidden Agenda ? (Score:4, Informative)
With respect, those millions of IBM PCs were scrap the moment they left the factory.
Every time I say something bad about IBM PCs on slashdot, an IBM employee with mod points mods me down as a Troll. I don't understand why, but hey, I'll try again...
I'm responsible for a fleet of around 100 personal computers - some desktops, most laptops. In years past, there was a corporate rule that said "Must Buy IBM" (they gave us a 'free' teaching lab worth of computers, we sold out, something, something)... So a significant magority of that fleet of computers are IBM PCs. P3-500, P3-650 and early P4 desktops, and a lot of 600E, 600X, and T21 laptops.
All of the IBM equipment, without exception, has failed at three years of age, plus or minus two months. The desktops have two failure modes: either the power supply just dies, or the brittle plastic bracket that holds the power switch inside the case breaks and falls off. You can generally jury-rig a solution for the brittle plastic, but the power supplys are made from unobtanium - exactly the physical opposite of an otherwise identical power supply that Gateway and many others used - and so you simply can't replace a power supply short of paying IBM prices for spares.
The 600 series stinkpads have a single failure mode: The battery charging circuit fails at precisely three years of age. If that damned blinking orange "I'm not working" light doesn't drive you mad, the fact that your laptop is now a desktop will!
The T21 laptops have two failure modes: either someone farts in the general direction of the grossly under-engineered screens and they either break, or just go a terrible pink colour, -or- the mini-PCI slot fails, and you lose modem and ethernet. Motherboard replacement.
Now these failures aren't one or two machines. These are all machines. They all fail that way.
Now you can't tell me that these failures aren't in the product by design.
By comparison, I have old P1, P2, and P3 gateway and Dell machines lying around everywhere, and those damn things just won't die!!!! I still have one old P1-60 gateway box with about 120Mb RAM in it running FreeBSD, MySQL, Apache and stuff, and with an uptime of about 2 years. It won't go away!!!
Nah man, this IBM stuff... it has the technical potential to be good stuff, but whilever they keep designing that shit to fail at three years of age, I'll not ever buy it.
Parent
Re:Hidden Agenda ? (Score:4, Informative)
Well, I don't believe you. We have an IBM service center in our company I can judge personally how many failures were caused by IBM's "bad design".
IBM PCs had only ONE critical problem - leaking capacitors on desktop motherboards, but it is not IBM fault - many vendors also had that problem.
btw: In some cases IBM service centers can repair your failed PC's under ECA even if it is out of a warranty. Leaked capacitors usually fixed under ECA.
Parent
Re:Hidden Agenda ? (Score:3, Insightful)
Re:Hidden Agenda ? (Score:3, Interesting)