Posted on 02/22/2005 7:00:01 PM PST by Golden Eagle
The U.S. government is close to completing its investigation into Lenovo Group Ltd.'s $1.7 billion acquisition of IBM Corp.'s computer division, sources close to the matter said. The companies are negotiating with federal regulators to foreclose any national security concerns over their deal, which could be approved as early as this week, a source said. Under its deadline to review the deal, the Committee on Foreign Investments in the United States, a multiagency panel that reviews acquisitions of U.S. businesses by foreign companies, must decide by mid-March whether to approve the transaction.
Sources close to Armonk, N.Y.-based IBM and Beijing-based Lenovo said the companies are seeking to allay CFIUS concerns centering on research and development activities at IBM facilities in Research Triangle Park in Raleigh, N.C. Lenovo is majority-owned by Legend Group Holdings Co., which is controlled by the Chinese government.
(Excerpt) Read more at thedeal.com ...
I expected as much from Clinton, but not Bush.
Ping
This article doesn't say, but once it was kicked into a formal investigation I believe the President does have to make the final decision. Unfortunately, IBM's lobbyists seem to be winning the battle.
I'd like to see the sale go to a US company or group of investors, if they're intent on selling a $10 Billion dollar/year company for $2 Billion, but the story is IBM turned down other offers because their future vision is one of even greater cooperation with these Chinese government fronts.
Tech security / business ping
could be approved as early as this week
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Sure, its revenue is quite high, but IBM's pc division has consistently LOST money recently.
Let's hope Bush will stand up to block the deal. If he doesn't, he runs the risk of looking hypocritical by recently requesting the EU limit their trade with China on security grounds, while approving this one despite objections voiced by Republican Congressmen over similar concerns.
This is far from a done deal, and even if approved, don't expect my concerns to magically disappear. This could be something we regret for a very long time, especially if it's a watershed event where more Chinese fronts start buying more US icons.
They are not buying an icon, they are buying a piece of the IBM pie. And a pretty small piece at that from recent sales data. As far as security concerns, were not talking supercomputer stealth technology here. Most of the components that go into a majority of PC's sold in this country are already built by the ChiComms. That's not to say that I agree with helping them out in any way though, just make some more valid arguments.
Actually, the just recently available profit reports for 2004 showed IBM PC with a profit, although that news has been greatly suppressed recently. However here's one story on Business Week:
It's a perfect time for the Chinese to enter the market in such a huge way, with the uncertainty at HP after the Fiorina firing, and we also have an increasing demand for PC's worldwide right now:
The lone possible bright spot, if the deal is approved, is that many large corporate customers may turn their nose on the new IBM/China partnership. From Merrill Lynch:
And reports from Dell:
Although a small piece of the pie, it is the part of the pie ordinary Americans have most tangible contact with.
I mean, the word 'IBM' rings a picture of a PC first in anyone's mind, and to sell away that picture, in my opinion, is the beginning of the end for IBM.
Not only has the IBM PC division been turning a profit recently (see the post I just added with a link to Business Week), the Chinese are using PC's to build supercomputers, in fact they use the Linux software that has recently been strengthened by IBM's contributions to the "free" software to build a supercomputer that registered in the top 10 in the world, a Chinese first.
Instead of criticising me for supposedly not knowing what I'm talking about, how about pulling the wool off your eyes instead?
I hope so, I'm sickened by all the US corporations shacking up with the communist Chinese government. But this one seems to take the cake.
http://www.freerepublic.com/focus/f-news/1300424/posts
IBM sought a China partnership, not just a sale
In July 2003, Sam Palmisano, the chief executive of IBM, traveled to Beijing to explore the sale of the company's personal computer business. But he did not start by making the usual visit with executives of IBM's preferred partner, Lenovo, China's largest personal computer maker. Instead, Palmisano first engaged in a bit of old-fashioned courtship. Before formally approaching Lenovo, he sought permission from the parents, by meeting privately with a senior Chinese government official in charge of economic and technology policy.
IBM was not merely looking to sell its PC business, Palmisano told the official, but had bigger aspirations of creating a global enterprise, with IBM contributing technology, management, marketing and distribution.
The idea, Palmisano explained, would be to build a modern and truly international Chinese-owned corporation. The move, he added, would demonstrate China's desire to take that next step toward economic maturity by investing abroad instead of merely serving as a manufacturing hub for the rest of the world.
There were other interested bidders, including one from an American buyout firm whose offer remained on the table until the end. And the Lenovo deal could have fallen apart. But apparently the Chinese option was the only one seriously pursued by IBM.
As I stated at the end of my post, I do not think this sale is a good thing in that it helps the ChiComms. This is something I oppose in principle.
So, is IBM selling China high encryption algorithms? are they selling them a means to build weapons that the EU is planning on selling to them? I don't think so. And that was my point. If I had the time, and a couple of million dollars, I could build a supercomputer myself with a good beowulf cluster of IBM Power PC's. And I'm just an average citizen. They are not selling them anything they couldn't achieve or haven't achieved on their own technologically. Another fact is that much of their PC sales is bulstered by their sales of the IBM Thinkpad, a laptop, which as far as I know will not be part of this package. I believe the reason for that is the fact that it uses some very strong hardware based encryption on their hard drives. So, IBM is not selling this country's security out with this deal. The President wouldn't be selling this country's security out with this deal. It is just basically wrong that an American Icon would even consider selling a very high profile part of their business to the ChiComms. That is what has got my goat, and probably yours too. But, instead of just saying that, you have delved into attempting to make this out to be more than what it is. At most it would be an attack upon our economy, albeit a small one. At the least it is a form of capitulation to the ChiComms for future business by both IBM and the Administration.
Ok, GE, I read the article you linked to. It makes no reference to IBM's contribution to Linux, an Operating System built by a Finish, and mostly optimized and upgraded by the open source community. Yes it is true that IBM has made contributions to the Linux Kernel, but nothing that could be construed as a security breach. Especially in light of the fact that anyone on Earth can have access to even the most recent kernel. Their are highly secure versions of the kernel, but these are not due to encryption but to configuration and therefore again do not fall under any security concerns. So, one more time. If you are against this business deal, I agree with you, but come up with a more valid argument.
This deal is purely an economic one for IBM. It is getting in bed with the Communists to make them richer and thus more apt to purchase IBM products in the future. Ask Bill Gates about getting in bed with the ChiComms. He used to sell loads of Windows distributions, but that dried up as soon as the ChiComms locked him out and pirated his software to the tune of 90% of users using an illicit version of Windows. Now the Chinese are publicizing a crackdown on pirated software that is nothing more than a PR stunt. The ChiComms want to get their grubby little hands on American technology to copy it and undersell us, not to build any kind of lasting business relationships. Good luck IBM, hope the dry bottom of the plunge doesn't hurt too much.
IBM is the originator of the "PC", and their quality of engineering and breakthrough design is legendary. That's why they have since their beginning been the premier PC company, that as everyone knows was able to successfully charge premier prices. It's not Chinese junk, it's the best engineered PC's with the highest R&D budget and greatest number of patents.
Combined with China's main PC company, it gives China not only the IBM name (for a while), but gives them the 3rd largest PC company in the world. And with HP's troubles, who currently sit at number 2, they could quickly be overtaken.
What IBM is essentially trying to do, is not only give the Chinese the highest quality PC engineers and manufacturing facilities in the world, but put them on the threshold of taking over the industry. And this is the Chinese government we're talking about, not a group of investors, but a communist controlled entity.
Their is a huge difference between outright handing over of American Missle technology and the PC division of IBM of which most components are already built in China.
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