IBM Sells PC Business
To Red China Concern
America Losing Economic War To Red China

By Kentroversy
Is the reader aware that the Red China company Lenovo has purchased the IBM Personal Computer division for $1.75 billion dollars in cash and stock equity? It is no wonder why they wanted to keep this corporate takeover relatively quiet. Yet another American company has been taken over by a corporation from Red China -- a corporation that is partly owned and controlled by the Chinese government. This story, which has MAJOR implications to the continuing technology transfers from the USA to Red China, has not been given much exposure in the controlled and heavily-censored American mainstream news media.
Red China has nearly defeated America by economic means, and not a single shot has ever been fired. Those in the know keep hearing about Red China's standing military of 200 million strong -- which is approximately two-thirds of the total population of the USA. China is kicking American ass -- and they are doing it by purely economic means. No armies have been deployed, and if our nation continues down the current road we are presently on -- Red China will completely defeat America by means of what I might call 'economic strangulation.'
It is beginning to appear that America is being destroyed from within ON PURPOSE -- and if this IS indeed the case -- then those in Washington, DC who are helping this to happen either through myopic monetary and trade policy or through their own failure to act to protect American national security -- are committing treason and should be immediately arrested and taken into custody.
In an article for Information Week, the following was mentioned about the national security concerns and the potential transfer of sensitive technology from the USA to Red China that could have occurred because of this corporate takeover:
"While IBM and Lenovo officials can now look forward to making Lenovo a global PC giant, the deal wasn't without its hitches. Some U.S. lawmakers expressed concerns that it would result in the transfer of sensitive technology to a communist-led country that some consider a political and economic rival to the United States. Nonetheless, the Committee on Foreign Investments in the United States, which is attached to the Treasury Department, gave the deal the green light in March after reviewing its national-security implications. At the time, a source close to the deal said IBM and Lenovo had to make some 'minor modifications' to the agreement to win federal approval. For instance, Lenovo employees working at IBM's manufacturing and design facility in Raleigh, N.C., must be housed in a separate building on the campus," the source said.
As the above quote points out -- this transaction was approved in spite of obvious national-security implications. While it may not result in the transfer of sensitive military technology -- there are economic implications here -- as the IBM personal computer division is a multi-billion dollar company unto its own. While the IBM-Lenovo co-headquarters will be located in both the USA and in Red China -- the profits of still another large global American corporation will be forever taken off-shore and away from America.
Here are some of the details of this corporate takeover:
* Creates third largest PC business with $12 billion combined annual sales (2003 fiscal year).
* With IBM buyout, Lenovo quadruples their annual sales on 11.9 million units sold.
* New marketplace encompassing 160 countries, for a true global reach.
* IBM will now outsource all PC's to Lenovo, with IBM handling customer credit side of business.
* IBM takes an 18.9 percent ownership stake in Lenovo.
* Founded in 1984, Lenovo brought the PC to Red China, and since 1997, has been leading PC brand in Red China and Asia.
* Lenovo had $3 billion dollars in sales in 2003, and IBM had sales of $9 billion of sales in that same year.
As the reader can tell by the list above, the Lenovo transaction is an extremely unusual situation. It is quite literally, a small fish devouring a larger fish, as IBM is three-times the size of Lenovo, in terms of sales volume alone. A company with $3 billion dollars in sales is usually purchased by the company with $9 billion dollars in sales -- and not the other way around. Here, the smaller company bought the larger company -- and this raises some red-flags -- leading me to wonder what is really going on here? "We were simply finding a boss for ourselves," said Mary Ma, Lenovo's Chief Financial Officer.
Why is ANYONE in the United States allowing a Red China corporation to purchase an American company three-times larger than itself? The article in WIRED magazine called this an "unprecedented union of [Red] China's biggest information technology company and an American institution..." and also points out that the acquisition moves Lenovo from the world's ninth-largest personal computer manufacturer, to the third -- behind Dell and Hewlett-Packard, respectively. This is the spot previously held by IBM, which as a company isn't gaining nearly as much as Lenovo -- a foothold in the American technology sector.
The WIRED article also points out that "there's more afoot here than the sale of an American icon to Chinese owners. The purchase creates the first truly globalized -- as opposed to global -- corporation. [ ... ] It's a confluence of forces -- innovation, technology, and free markets -- that makes this moment possible. Isn't this exactly the kind of IBM Thomas Watson Sr., who in the 1930's pitched world peace through world trade,' would have wanted for the 21st century? Is this what globalization hath wrought?" [WIRED pg. 144]
Lenovo chose IBM's Steve Ward to become its' next CEO, and SONY did the same earlier in 2005, when they named Howard Stringer as their first-ever non Japanese Chairman and CEO. This is the business world under the regime of globalization -- American business executives training and mentoring their own Red Chinese counterparts as the formerly American company now works against the U.S. -- the very country to which they are supposed to harbor some allegiance.
Some might wish to think that this $12 billion dollars is only a small portion of IBM's annual sales of $96.3 billion dollars -- but this fact does not matter much when set against the 'bigger picture.' The anti-trust and the national-security personnel that examined this deal for the U.S. Government have set a dangerous precedent by approving this corporate takeover.
I expect to see further deals of this nature -- with larger amounts of shareholder equity flowing permanently out of the USA and into Red China.
The deal starts to make sense when one discovers that twenty-eight percent of Lenovo is owned by the Red China government. Could this be an act of economic war against the USA by Red China itself?
Here are some of the ways in which the Lenovo deal harms the United States:
* Red China communist government owns 28% stake in Lenovo.
* Pre-buyout 33% of IBM employees were based in the U.S. Post buyout, it fell to only 17% based in the U.S.
* IBM loses half of their employees who were formerly based in the USA, about 10,000 jobs total.
* IBM's revenue per employee falls from $1,279,400 to $684,211.
* Red China government-backed company operates in America at New York co-headquarters.
* IBM PC unit with $9 billion dollars in annual revenue in 2003 is sold for rock-bottom price of $1.8 billion dollars.
The takeover of IBM's PC manufacturing business is similar to the $3.4 billion dollar corporate takeover by SONY Corporation of Columbia Pictures Entertainment (and all subsidiaries) on November 7, 1989. Will another company, in the future, be hijacked in a similar manner? I would have to say, that yes it will happen again. America will come to suffer Red China's 'death of a thousand cuts' -- and whether we as a nation will survive is anyone's guess.
The signs and symptoms of the situation seem to indicate that we are ALREADY at war with Red China -- and the basis of this war is economic in nature. We have run up an outrageous trade deficit that is largely due to one single nation. We import all matter of cheap and inexpensive goods -- at the expense of the careers and livelihoods of millions upon millions of American citizens -- who now work at a local fast food restaurant because their factory job was relocated to Mexico or Red China.
The only solution to this mess in which we currently find ourselves is NOT to purchase goods and/or services from companies like Lenovo-IBM, WAL-MART, and others like them. There still are a few good and honest businesses left -- and it is THEY who deserve our patronage. Why continue to line the pockets of TRILLIONAIRES -- such as when one shops at WAL-MART -- when you can rest your conscience and shop at one of the few remaining honest businesses that can be found? This is a war -- and during times of immense struggle -- the idea should be to support your allies and protest your enemies by refusing to patronize their businesses. While it is certainly true that things cost more at the smaller but honest business -- however I would much rather patronize that honest business than to place my money with some business who is using the profits from my purchases to DESTROY the land that I love so much.
IBM Press Release - 'Lenovo To Acquire IBM Personal Computing Division,' December 7, 2004
Maney, Kevin - 'The New Face of IBM,' WIRED July 2005, pgs. 142-149
McDougall, Paul - IBM Completes Sale of PC Business To Lenovo,' Information Week, May 2, 2005
WIRED News Report - 'IBM Deal Gets Green Light,' March 9, 2005,1367,66841,00.html
© 2005 Kentroversy



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