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US Government May Not Approve Sale of IBM PC Unit

samzenpus posted more than 9 years ago | from the not-at-any-price dept.

Hardware 358

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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358 comments

FIRST POST!! (-1, Redundant)

Anonymous Coward | more than 9 years ago | (#11466315)

FIRST POST!!

Re:FIRST POST!! (-1, Offtopic)

Anonymous Coward | more than 9 years ago | (#11466322)

You are a stupid twit. Why is there such an obsession with getting the first post anyway?

Dell a better target (1)

ehack (115197) | more than 9 years ago | (#11466349)

Congrats for being the first. Now, for the funny bit.

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.

Hidden Agenda ? (0, Flamebait)

TM22721 (91757) | more than 9 years ago | (#11466320)

The real story is that the government has millions of IBMs bought in the past two years that are now just so much scrap due to lack of support.

I know that at my own company, heads are rolling over having standardized on IBM (from Dell) and now laptop problems are going unfixed due to 'attitude' problems from support vendors.

Re:Hidden Agenda ? (0)

Anonymous Coward | more than 9 years ago | (#11466340)

No one ever got fired for choosing IBM. heh heh

PC competition for the I-Mini MAC? (-1, Offtopic)

Anonymous Coward | more than 9 years ago | (#11466374)

When MAC announced their "I-Mini", it caught my eye. Wanting to buy/build a small computer for my already cramped breakfast bar, I started pricing out similar hardware. The results startled me. Most of the configurations I found were more than the humble US$499 of the "I-Mini". To match price I had to configure with a much bigger shuttle-style case.

My question is this. What PCs are currently on the market to compete with this? When my wife asks for the "cute little MAC", what real computer can I buy instead?

Re:PC competition for the I-Mini MAC? (0)

Anonymous Coward | more than 9 years ago | (#11466447)

Do you have to post this crap everywhere?

And mods stop smoking the crack, tyvm.

Re:PC competition for the I-Mini MAC? (1)

Jarlsberg (643324) | more than 9 years ago | (#11466479)

This is insightful? It isn't even on topic. And the anon posted this very message in a mini mac thread a few days back. ;)

Re:Hidden Agenda ? (4, Insightful)

shanen (462549) | more than 9 years ago | (#11466377)

Well, you obviously have something against IBM, but your "facts" are totally bogus. The lack of evidential links is obvious enough.

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.

Re:Hidden Agenda ? (0)

Anonymous Coward | more than 9 years ago | (#11466403)

uhm, i think he meant they switched away from Dell to IBM as a supplier, not that Dell was selling Thinkpads.

Re:Hidden Agenda ? (2)

af_robot (553885) | more than 9 years ago | (#11466400)

For your information:
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 you have with ThinkPads?!

Re:Hidden Agenda ? (0)

Anonymous Coward | more than 9 years ago | (#11466445)

Btw: How many "laptop problems" did you have with ThinkPads?!

I'm an IBM employee, and like the Thinkpad, but the T30 has been pretty poor in my experience - mine, and many of my coworkers, have been back for repair more than once. I don't think they make them as well as they did.

Re:Hidden Agenda ? (1)

Eric Giguere (42863) | more than 9 years ago | (#11466410)

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 ? (4, Informative)

B747SP (179471) | more than 9 years ago | (#11466420)

The real story is that the government has millions of IBMs bought in the past two years that are now just so much scrap due to lack of support.

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.

Re:Hidden Agenda ? (3, Informative)

af_robot (553885) | more than 9 years ago | (#11466485)

Now these failures aren't one or two machines. These are all machines. They all fail that way.

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.

Re:Hidden Agenda ? (0)

Anonymous Coward | more than 9 years ago | (#11466827)

You wouldn't be selling some competing brand of computers by any chance? I have had nothing but good experiences with IBM laptops, starting with a 600E. They just keep on working, and can be sold for good value even after a few years.

IBM - Cell and Power (0)

Anonymous Coward | more than 9 years ago | (#11466430)

IBM needs a buyer for it PC division because it intends to pursue their own architecture, that is their new Cell technology and Power line.

So they want to sell it now while it's still hot. Not later when they will actually compete with the old PC-architecture.

And selling to a foreign company, like one from China, is really good move. An incentive for "others" to put a spoke in IBM's wheel?

Business ought to be left alone (3, Interesting)

Dancin_Santa (265275) | more than 9 years ago | (#11466323)

There is very little good that come out of government meddling in the affairs of private companies when no one is being harmed. IBM wants to sell, Lenovo wants to buy. No harm, no foul.

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 (5, Insightful)

vladd_rom (809133) | more than 9 years ago | (#11466343)

>> IBM wants to sell, Lenovo wants to buy. No harm, no foul.

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? :) ). In those cases, the government is expected and does regulate economic activity in order to re-balance the market.

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.

Re:Business ought to be left alone (5, Insightful)

AvidLinuxUser (573832) | more than 9 years ago | (#11466365)

Oh, they (government) really stopped Microsoft.

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.

Re:Business ought to be left alone (2, Insightful)

B747SP (179471) | more than 9 years ago | (#11466359)

There is very little good that come out of government meddling in the affairs of private companies when no one is being harmed

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 admit that it only takes a bit of industrial espionage to take the lid off a lot of secrets, but that doesn't mean you should hand the blueprints for everything over, no questions asked.

I, for one, would be a damn sight happier if y'all would stop pissing about with nail files in carry-on luggage and concentrate on stuff, like this, that actuallymatters.

Re:Business ought to be left alone (3, Insightful)

DNS-and-BIND (461968) | more than 9 years ago | (#11466384)

Nah, the Chinese didn't grease the right people. These big government deals are all about graft, and who gets it. In the Jiang Zemin/Clinton era, times were happy...the Chinese paid, and the U.S. responded with whatever they wanted...satellite technology, nuclear secrets, influence in elections. However, the new administration of Hu Jintao evidently forgot to pay off the right people, and now the whole deal is in jeopardy. Play ball, people!

Re:Business ought to be left alone (1)

shanen (462549) | more than 9 years ago | (#11466405)

Actually, now that you mention it, my recollection is that IBM doesn't donate any money to political parties. I can imagine how that might bother certain politicians...

Re:Business ought to be left alone (1)

cheekyboy (598084) | more than 9 years ago | (#11466666)

CHina buys $500billion + in US T bills which really prevents USA from going bonkers bankcrupt, so they are damn well helping out well, so whats the deal? That USA is stuck in a stale mate?

Re:Business ought to be left alone (0)

Anonymous Coward | more than 9 years ago | (#11466385)

you are a truly great troll.

Re:Business ought to be left alone (2, Insightful)

eclectro (227083) | more than 9 years ago | (#11466386)

The Chinese are not the Red Menace they are made out to be.

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 have gotten Most Favored Nation (MFN) status because of this.

Make no mistake, the Red Menace could prove to be alive and well someday.

Re:Business ought to be left alone (4, Insightful)

dunkelfalke (91624) | more than 9 years ago | (#11466440)

well, usa has been the only country getting mad at others and invade in the last years.

Re:Business ought to be left alone (1)

Ricwot (632038) | more than 9 years ago | (#11466751)

Depends on how recent, not so long ago we had the Falkland wars between Britain and Argentina, China and Tibet wasn't that long ago, but looking at the differences between America and Britain, and China, America and Britain were aggrevated, whereas Tibet was a peaceful non threatening country, and we must also not forget that the war on terror was offered support (which was refused) by Nato, which means that most of the world's democratic power was behind it.

Re:Business ought to be left alone (1)

dunkelfalke (91624) | more than 9 years ago | (#11466790)

two wrongs don't make a right.

(but three lefts do, according to someone's signature)

Re:Business ought to be left alone (3, Insightful)

mark (495) | more than 9 years ago | (#11466610)

Human Rights record?? Can you say "guantanamo bay"?

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, white and blue.

Re:Business ought to be left alone (0)

Anonymous Coward | more than 9 years ago | (#11466679)

Hey !!
Communisme only killed 100+ Millions !!
Lets give it a chance one more time!!!

Re:Business ought to be left alone (3, Interesting)

Anonymous Coward | more than 9 years ago | (#11466787)

Grrrrr, I really hope you're trolling but I'll bite.

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 foreign wars of occupation isn't it YOUR govenrment that needs to be slapped down?

Human rights? So the USA has such a good history of this, signed up to the Geneva convention - oh, what's that it's not - and infact in contravention of it in practice in many places - Guantanimo is an illegal ethical and moral disgrace for example, let alone what's been going on in Abu Grade and other places where it seems there is/was an institutionalised systematic policy of abuse.

How about this for a chiller - the USA tops the world for child prostitution. Yup, nice wholesome christians that you are, is Bush going to try and impose those values on the rest of the world too - along with his current agenda of promoting short term greed over protecting the environment for future generations?

Why is it also that the USA effectivley has more votes in institutions like the WTO and the IMF than everyone else put together. Is it right that the richest people in the world get to dictate global finances, which they always do in their favour. I thought the WTO and IMF were there to help developing nations, not as a way for the USA/G8 to rip them off. This is an example of that - "You must accept our free market conditions on your own economies, but we'll do whatever we like".

The reason that the dollar is spiraling downward has nothing to do with the rest of the world or China (which infact is still helping to prop up the dollar through trade - probably why they've got MFN, you can trade with them and profit lots from the cheapness of those human rights abuses), the fault lies entirley with the USA administration. It's the one that's running your economy down the toilet, but then Bush's out of office in another 4 years so he's squeezing for every last drop he and his friends can make. Perhaps you should sort out your trade deficit and borrowning so you wouldn't have to foist debt off onto developing nations by selling them your currency.

The other reasons the dollar is dying is simple, there is now a sensible alternative, the Euro and so people have a choice - good it's a free market :-)

The USA isn't well liked in the world because of it's terrible foreign policies and as the USA has used the dollar as a way to impose unfair trading and debts on other countries is it any wonder that places are now sending them back and saying no thanks, we'll give the Euro a go. Isn't that what Iraq did shortly before being invaded. Other places that did that - Iran and North Korea - where is top of the impending invasion list? So what do you have to do to be a member of the axis of evil? That's also why the USA administration hates the French so much - it's been mostly their diplomacy that affected these changes to monatary policy.

I could go on and on and on but you get the picture - wake up, stop looking at the world thru Bush tinted goggles and take an objective view and I think you'd be suprised at what is really going on in the world.

Make no mistake, the Stars and Stripes meanace is alive and well today and something needs to be done ASAP.

Re:Business ought to be left alone (1)

Kerstyun (832278) | more than 9 years ago | (#11466835)

Guantanimo is an illegal ethical and moral disgrace for example, let alone what's been going on in Abu Grade and other places where it seems there is/was an institutionalised systematic policy of abuse.
And them russky gulags was like holiday camps, right? Not to mention what them chinks is doing in Tibet & to all them christian & democratic dissidents at home. Is it only me as remember's Chianaman Square?

Freakin heathen commies, you make me sick.

China is a bunch of ... (0)

Anonymous Coward | more than 9 years ago | (#11466394)

China is a bunch of elite politicians and military leaders that "own" the bulk of the businesses. It's at LEAST as corrupt as any other government on the planet. I highly doubt that a takeover of IBM could be deemed completely harmless. China has a long history of copying without penalty. They freely duplicate what isn't theirs, and they lie, cheat, and steal their way to promote competition. They're the first ones to cry foul when cheated, stolen, or lied to though.

The Chinese are not very pleasant to deal with. If I were an IBM exec OR the US Gov't, I would sell the PC division to Lenovo, but I'd be VERY careful about access to other parts of IBM. I'd go through everything with a fine-tooth comb.

Re:Business ought to be left alone (1)

MarkSyms (167054) | more than 9 years ago | (#11466409)

IBM has the ultimate end-game anyway. If the US gov blocks the sale then IBM is better off just closing the devision and laying off all the staff. Given that they have been losing a billion dollars a year on that division for a number of years.

Re:Business ought to be left alone (0)

Anonymous Coward | more than 9 years ago | (#11466469)

It's funny, the land of freedom and capitalism is taking steps that would make a communist plutocracy proud.

That statement is completely over the top. The US is not a "communist plutocracy" its a "caplitalist plutocracy".

While this case may result is little good due to government meddling, business ought NOT be left alone. Its because of business being able to do what it likes that we have huge environmental degredation, that people across the world make luxury goods for a few cents an hour, and that the majority of wealth is concentrated in an elite few.

Business is on the rampage and every evironmental/social system on the planet is in decline because of it.

So it begins (4, Insightful)

scapermoya (769847) | more than 9 years ago | (#11466329)

The last-ditch efforts of a superpower that will hate being #2 when when China gets its act together in the next generation or two.

Re:So it begins (0)

Anonymous Coward | more than 9 years ago | (#11466456)

If there's any hidden agenda here, it's China's. The country has a long history of getting sneaky access to technology, for purposes of 1) intimidating other countries or 2) beating down their own people.

Suppose the Chinese government begins using IBM technology to monitor their own people 24 hours a day and keep lists of dissidents. Suddenly the cry would be "Why did the US allow this to happen?"

Re:So it begins (0)

Anonymous Coward | more than 9 years ago | (#11466491)

You misspelled 'USA' as 'China'

FYI

Re:So it begins (0, Flamebait)

CmdrGravy (645153) | more than 9 years ago | (#11466633)

It's a good job no other large countries ever behaved like that isn't it. Gosh, imagine sneaking around to access technology and then using it to build rockets or missiles and using them to threaten the world. Wouldn't that be dreadful.

Re:So it begins (1)

Skye16 (685048) | more than 9 years ago | (#11466470)

Probably one of the best things that could happen, though. Maybe then people will realize that resting on your laurels is always a bad idea in the long run.

Re:So it begins (0)

Anonymous Coward | more than 9 years ago | (#11466580)

The question is - can Europe set up to the plate as well?

#2? (4, Interesting)

Savage-Rabbit (308260) | more than 9 years ago | (#11466640)

Hardly #2, but the USA is nevertheless waking up to the fact that China is catching up technologically at a much faster rate than anybody had expected. Soon enough the Chinese will have reached a point where they can threaten the USA militarily using Chinese developed technology based on technological transfer from Russia, W-Europe and the USA it self. Greedy corporations outourced work to China and with they exported the technology China needed to develop better and better military hardware. This sort of a panic reaction is simply a belated reckonition of this development. Expect the Chinese to field Submarines, Tanks and a Stealth aircraft capable of competing with the F-35 within the next 20 years or so and its surface fleet will become a serious challenge to the USN in the Pacific.

PC competition for the I-Mini MAC? (-1, Offtopic)

Anonymous Coward | more than 9 years ago | (#11466331)

When MAC announced their "I-Mini", it caught my eye. Wanting to buy/build a small computer for my already cramped breakfast bar, I started pricing out similar hardware. The results startled me. Most of the configurations I found were more than the humble US$499 of the "I-Mini". To match price I had to configure with a much bigger shuttle-style case.

My question is this. What PCs are currently on the market to compete with this? When my wife asks for the "cute little MAC", what real computer can I buy instead?

Re:PC competition for the I-Mini MAC? (0)

Anonymous Coward | more than 9 years ago | (#11466360)

what real computer can I buy instead?

Face it, you're just jealous of Mac users who can afford to buy them.

The facility in North Carolina is really strange (1, Interesting)

Anonymous Coward | more than 9 years ago | (#11466334)

I encountered this IBM facility almost two decades ago by accident, when making a wrong turn. It had some innocent looking name like "ibm education center" or similarly meaningless and harmless sounding name, and was huge, all of it spread far back from the highway. With the security vans and cameras and other things all around, it did not look at all like what the sign might suggest. Also, from the moment we made the turn into their lot, to the time we exited and for awhile down the highway, one of their dark security vans followed us everywhere we drove. It gave the impression in many ways of...something "more interesting" going on there. And this was around 89.

Re:The facility in North Carolina is really strang (1, Informative)

Anonymous Coward | more than 9 years ago | (#11466344)

It's where they send misbehaving employees. I've been there and it's really not so bad. Lots of free drinks and rah rah team building exercises. It's kind of the last chance stop before they boot you out of the company.

One of the outings during the 2 week "education" training was a trip to see the Tarheels play. Not being a big fan, I sat it out back in the dormitory. Unfortunately, that showed my "lack of team spirit" and counted against me in my final evaluation.

I don't work for Blue anymore, but back in the late 70's it was a pretty great place to be.

What is the difference (1)

biophysics (798365) | more than 9 years ago | (#11466339)

between this sale and outsourcing?

Re:What is the difference (2, Funny)

jerichohol (821580) | more than 9 years ago | (#11466380)

This is a sale of a loss making business so you dont have to take the blame.

Outsourcing is where you let someone else do the dirty work but you take the blame.

So yes there is a difference.

BTW if you own IBM PC's instead of learning Hindi, Mandarin is the way to go

Re:What is the difference (1)

TheKidWho (705796) | more than 9 years ago | (#11466427)

Well for one, according the the agreement, Lenovo is going to be relocating its headquarters to America. That is one of the fears, that the employees are going to be in America and will somehow conduct espionage.

Laissez-Faire? (5, Insightful)

JulianOolian (683769) | more than 9 years ago | (#11466341)

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? (0)

Kick the Donkey (681009) | more than 9 years ago | (#11466351)

Yeah.... That's republicans for you. There're all about freedom and less government, till it comes to things they personaly don't like. I bet the thought of China getting ahold of some small part of IBM is just making some of those WASPs cringe....

Re:Laissez-Faire? (3, Insightful)

antifoidulus (807088) | more than 9 years ago | (#11466354)

China does this type of stuff to US products in China all the time. They have a ton of "non-tarriff" barriers. The reason the US has yet to make a major challenge to them in the WTO is that:
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.

Re:Laissez-Faire? (1, Informative)

TheKidWho (705796) | more than 9 years ago | (#11466399)

Wrong, the American people are the largest buyers of American Debt, not the chinese government.

Re:Laissez-Faire? (0)

Anonymous Coward | more than 9 years ago | (#11466419)

Ch1n4 0wnz U5A.

Don't kid yourself.

Re:Laissez-Faire? (0)

Anonymous Coward | more than 9 years ago | (#11466612)

Wrong, the largest buyers of American debt are to be found in Asia and particularly in Japan and China. There are however fears they are loosing apetite for American debt. because of the declining value of the dollar and doubts over repayment.
In the near future it will probably get a lot harder for the US to find money to fill the financial gaps in the budgets.

Re:Laissez-Faire? (1)

R.Caley (126968) | more than 9 years ago | (#11466408)

China does this type of stuff to US products in China all the time.

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 can only really afford to throw stones at the EU, who are the other big offender.

Re:Laissez-Faire? (0)

Anonymous Coward | more than 9 years ago | (#11466362)

> I thought the US were supposed to be the laissez-faire free marketeers of the world?

Since when?

Like any other government mixing power politics and economics, free markets are welcome by US as long as they are benefical in short term, for US.

Re:Laissez-Faire? (0)

Anonymous Coward | more than 9 years ago | (#11466370)

How about the WTO banned requirement that all software/IT infrastructure be partly sourced in China.

Boy did the US create a stink about that.

Re:Laissez-Faire? (0)

Anonymous Coward | more than 9 years ago | (#11466477)

Yeah, the US is very Laissez-Faire with peoples rights too.

We will see what China has to say about this (4, Insightful)

antifoidulus (807088) | more than 9 years ago | (#11466342)

China can always threaten to stop buying up US debt. That would mean a large spike in interest rates in order to make buying US debt more attractive to investors. It would probably also mean a tax hike, something that Dubya would like to avoid at all costs.
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 (1)

TheKidWho (705796) | more than 9 years ago | (#11466396)

The largest buyer of US debt is the American people, not china.

Re:We will see what China has to say about this (0)

Anonymous Coward | more than 9 years ago | (#11466435)

Ok. You say it again. Then I say it again.

Ch1n4 0wnz U5A.

Don't kid yourself.

where are you sources? (1)

cheekyboy (598084) | more than 9 years ago | (#11466753)

Dude, TheKidWho (knows nothing)

http://mwhodges.home.att.net/reserves.htm
http: //mwhodges.home.att.net/debt.htm

Foreigners now own more and more of America - - about "$8 trillion of U.S. financial assets, including 13% of all stocks and 24% of corporate bonds", according to Bridgewater Associates. According to the Federal Government Debt Report, they also own 40% of Treasury bonds & bills. Additionally, they own real estate and factories.

Even your own silly US DOLLAR is not owned by the govt, but by the federal reserver PRIVATE CORPORATION which is composed of 12 central banks, mostly foreign.

Your sweet ride is over.

Re:We will see what China has to say about this (0)

Anonymous Coward | more than 9 years ago | (#11466416)

You know that, and I know that, but how often do we trace the problems encountered today to the mismanagement and economic fallacies of former administrations? Politics is a religion in itself where simple definitions and observations are twisted to become a means to an end.

Re:We will see what China has to say about this (2, Insightful)

andy1307 (656570) | more than 9 years ago | (#11466459)

It would probably also mean a tax hike, something that Dubya would like to avoid at all costs.

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 (2, Insightful)

2Bits (167227) | more than 9 years ago | (#11466471)

Well, if I were the head of China's government, I would do nothing, and let the market settle it. And I would keep buying US debt, until I own more than 50% of the US debt, and I would be able to do more remote control of the US government (or at least, influence it to my favor).

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 saying it's good or bad (although I do hope this would happen very soon), but that'll be interesting to see.

Whether the US like it or not, China is going to play the rules in the US's court now. Although the chinese companies are still very small, compared to the american/european/japanese ones, but we had seen this kind of situations change in about 10-15 years time. So, when the chinese companies grow big enough, they'll look to acquire some oversea asset (for any purpose, even just for diversification).

Whether you like it or not, this is capitalism. I'm crossing my fingers.

Re:We will see what China has to say about this (1)

jfp51 (64421) | more than 9 years ago | (#11466486)

Quick comment, debt is not equity, it does not give you any control per se, although having a large part of someone's debt obviously makes them listen to you ;)

Re:We will see what China has to say about this (0)

Anonymous Coward | more than 9 years ago | (#11466834)

Owning a bunch of US debt assumes the US can't just print more money. They can. The gold standard is gone, and while that fact has helped the USA and the dollar short term, in the long term it's meant much less fiscal discipline -- for the USA and for countries like Argentina. Currency is a contract. Most these days are contracts for pretty pieces of paper only, though.
me

Re:We will see what China has to say about this (1)

gordo3000 (785698) | more than 9 years ago | (#11466672)

you do realize that China doesn't buy US debt because they are trying to be our friends or are somehow similar to western germany as america was coming off the gold standard??

China buys american debt as one of its many ways of keeping its currency down(covert to dollar then buy our debt,note you can keep your real investment value about the same or with small growth from interest on debt you don't get when holding cash). It is in China's favor to continue to hold its currency down as they have been doing for a long time. It has been pegged to float around the same rate for longer than I can remember and this is beleived to be one of the reasons so many jobs are exported to China.

If China were to dumb US debt, it could be a little problematic for its own economic plans. A spike in the US interest rate would draw a great deal of money into our country and we would see the dollar INCREASE in value. This would cause major problems for China as it would have to either buy up its own currency to hold hte exchange rate steady with the US dollar thereby losing its competitive advantage with several other countries or it could revalue its currency.

Anyways, if these doomsday prediction of China gaining control over the US by owning enough of its debt ever came to pass, the US always has one major trump card, we can at any time invalidate all those US treasury bonds and they become nothing more than scraps of paper. Yes, I know its extreme, but its pretty much on par with the idea that China would gain a say in our government that way.

Copyright Laws (1)

Azadre (632442) | more than 9 years ago | (#11466352)

I think this is in place so China can not use the information gained from the IBM takeover to flood the US markets. China still is communist and they work hard to get their products in American hands, even if that means stealing the technology from someone else. Just my two cents.

Re:Copyright Laws (2, Insightful)

Bobvanvliet (569014) | more than 9 years ago | (#11466462)

And getting affordable products with IBM quality (that were always produced over there anyway) from an increasingly capitalist country is a bad thing how exactly?

Re:Copyright Laws (1)

Azadre (632442) | more than 9 years ago | (#11466490)

It prevents another garage based or mail-order computer company from starting up.

Why target imb? (1)

Hosting Geek (851934) | more than 9 years ago | (#11466353)

This is as stupid as saying: Anything made in china is illegal in usa.

Common its not ONLY IMB which makes stuff in china, almost everyone does.

"Might" be the US gov at work ... (2, Interesting)

Moulinneuf (844899) | more than 9 years ago | (#11466369)


First of all the : " unnamed sources "familiar with the matter" Might be wrong and just trying to stir some trouble. Lets wait until the "final" decision shall we ...

Secondly The US government need its INTEL upgraded , serioulsy , every computer parts ever made this days have some components made in China. ( welcome to the reality )

They already make the IBM computer there ... and all the other computer too. They are "only" assembled in the US.

The US actually today make no ( as in zilch , zero , nada ) computer part whatso ever on its own ...

All there going to end up doing is look like fool for no obvious reason and going to hurt one of there own company and maybee bring them into bankrupty ...

And could even close the enormous Chinese market to all the others from the US ...

INTEL has sites in USA (1)

cheekyboy (598084) | more than 9 years ago | (#11466800)

Sites within the United States are located in Chandler, Ariz.; Santa Clara, Calif.; Colorado Springs, Colo.; Hudson, Mass.; Rio Rancho, N.M.; Hillsboro, Ore.; and Dupont

http://www.intel.com/pressroom/kits/manufacturin g/ manufacturing_qa.htm

Commoditized espionage (1)

Hal XP (807364) | more than 9 years ago | (#11466391)

I can understand the fears of the US government. Like everything else, espionage is probably becoming commoditized. PC technologies -- including the Intel and AMD CPUs inside them -- are relatively low-tech as far as millenium technologies go. But link several and you have a commodity supercomputer. Terrorism has for a long time been a form of commoditized warfare. Small, treacherous attacks combine to give the impression of strength against a state with an overwhelming superiority in conventional or nuclear arms.

Why IBM need to sell (4, Informative)

Ev0lution (804501) | more than 9 years ago | (#11466407)

Bad news for IBM if it's blocked, because if you look at the full year report* it's clear why they're so keen to get rid of it.

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]

Re:Why IBM need to sell (0)

Anonymous Coward | more than 9 years ago | (#11466561)

Personal Systems Group made $162 million off turnover of nearly $13 billion, that's a 1.2% margin.

$162 million is $162 million. Who cares what the turnover is as long as it's generating a profit?

Re:Why IBM need to sell (1)

Roofus (15591) | more than 9 years ago | (#11466619)

$162 million is $162 million. Who cares what the turnover is as long as it's generating a profit?

Because that 13 Billion could be put to use for something that has greater profit margins. Imagine being able to make 3 Billion instead of 162 Million.

Re:Why IBM need to sell (1, Insightful)

Anonymous Coward | more than 9 years ago | (#11466707)

$162 million is $162 million. Who cares what the turnover is as long as it's generating a profit?

Two reasons. Risk, and return on capital.

First, risk. Looking at it simplistically, they spent nearly $13 billion to make slightly closer to $13 billion. A small increase in costs, and suddenly they're spending $14 billion to make $13 billion. And hardware costs have a history of being unpredictable - taiwan earthquake, maybe, and it's a big loss next year.

As for return, software group only needs to spend $10 billion to make $15 billion, so why spend that other $13 billion on hardware when they can spend it on something with a reasonable margin?

When did this happen? (5, Interesting)

g0hare (565322) | more than 9 years ago | (#11466411)

Computers are all made in China anyway! We don't build cars in America, we don't grow food in America, we don't even do tech support in America, we don't make steel in America, we don't make clothes in America and we're busy moving all our jobs that pay well overseas! When exactly did this kind of behavior become a "national security problem?" instead of good business? I mean I know all those people who used to make textiles in the South all just went right out and got themselves a degree after the mills closed - what, you say they weren't smart enough to do that?

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?

Re:When did this happen? (1)

TheKidWho (705796) | more than 9 years ago | (#11466464)

Hah ok, lemme sort this out for you

We do build cars in america, in fact AFAIK All cars are sold in the US domestically are required to have been built in the US.

OHh and we certainly do grow food in the US, thats what the entire midwest is for you nut.

As far as tech support in America, yes we do do it. What do you think IBM does? Lots and lots of tech support. Ohh and all that Tech support overseas sucks, a bot on a PC would be just as good for tech support.

Re:When did this happen? (0)

Anonymous Coward | more than 9 years ago | (#11466481)

When exactly did this kind of behavior become a "national security problem?"
Is it possible - just possible - that there are projects going on in IBM's Research Triangle Park units besides building PC's? Maybe even things you don't know about?

Then WHAT THE HELL is left for them to do when all those jobs are gone except cook meth in their trailers?
Maybe in your part of the country, that's what happens. Here in the South, we walk down the street to another company and get back to work. That's what happened last time IBM closed a unit. We have a work ethic 'round these parts.

This is like (5, Interesting)

cyberkahn (398201) | more than 9 years ago | (#11466426)

sticking your finger in the leaking dike or singling out a grain of sand from the beach. It's already too late. We have exported a majority of our technology to China already, which of course is being copied, therefore, saving China billions in R and D. America's greed has sold itself out.

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.

Security concerns over a commodity? (2, Interesting)

hussar (87373) | more than 9 years ago | (#11466428)

Computers, at least at the PC level, are a commodity good that are produced with very narrow cost to sales price margins. This makes them very similar to toasters, coffemakers, small refrigerators, etc. IBM wants to sell its PC unit because it can no longer compete or doesn't want to continue expending the energy and resources it takes to compete. This competition arises from the fact that there are any number of other producers in the market turning out computers which are almost indistiguishable from the ones IBM is producing. Some of these other producers are in China. So, it appears that this ruling would stop IBM from selling to a Chinese firm a capabilty other Chinese firms already possess and which is causing the market pressures that pushed IBM to consider the sale in first place.

Where in all of that is a national security concern?

free market is just a slogan. (2, Insightful)

fams (147858) | more than 9 years ago | (#11466432)

It will be the same to say: "Hello everybody, free market is only an idea. We don't belive in it. We just want you open your market to US.

Topic rang an ancient bell... (5, Funny)

shanen (462549) | more than 9 years ago | (#11466450)

[One of the key figures is already missing...]

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?"]

Stupid govt. DOH! (1, Interesting)

Anonymous Coward | more than 9 years ago | (#11466466)

There is nothing in the PeeCee division of IBM that might harm the USA that China doesn't already have.

Sell them* the Panama Canal, no-problemo! Let IBM get a foot in the door in China? For anyone who has bothered to read the details of the deal, IBM will make out like a bandit and USA will be in a better position to spy on the Chinese!

*Surprised it's not being called Wampo-Canal by now.

Totally (4, Funny)

t_allardyce (48447) | more than 9 years ago | (#11466467)

Frankly im outraged, I think everyone here needs to write to their congressman or something. Also I have absolutely no idea what the story is about, thats the most confusing paragraph ive ever read. IBM PC's are national secuirty risks? Blocking sales? Something about communist China? I wish the government was this concerned with oil company ownership.

Maybe now Apple (1)

cocoacow (838794) | more than 9 years ago | (#11466473)

will buy it, and turn into an even bigger player then ever before. That's what I got my fingers crossed on. Although it would be tight to have everything become PPC, the way it looks like it's going.

The part I didn't get (2, Interesting)

andy1307 (656570) | more than 9 years ago | (#11466474)

They are concerned Lenovo employees might be used to conduct industrial espionage.

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?

Re:The part I didn't get (0)

Anonymous Coward | more than 9 years ago | (#11466575)

As of now, even in IBM there are certain contracts that allow (for example) the replacement of hdds without allowing the malfunctioning ones to be sent back to IBM. This way there is no problem of spionage or whatever. It's more money payed for the contract with IBM, sure, but also more assurance for the customer.

Gee, can't even come up with a decent reason (2, Funny)

2Bits (167227) | more than 9 years ago | (#11466488)

I mean, all these smart people in all those 11 agencies, and still couldn't come up with a decent reason to block the deal?

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!
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