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Home >> Business
UPDATED: 15:10, March 07, 2005
Three risks in acquiring IBM PC sector: Lenovo Chairman
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Deputy to the National People's Congress of China and the Chairman of the Lenovo Group Liu Chuanzhi said he is confident to turn the loss-making IBM PC sector to profits.

The US government has intervened in the deal by investigation due to concern for state security, which has indeed brought about some impact to the deal. But the final result will not be seen until two or three months later, said Liu.

The IBM PC sector has seen deficit for three consecutive years, with annual loss ranging from US$ 100 to 200 mln. The huge cost it bears for the parent company is the principal reason for such deficit. But Liu appeared confident for settling this problem. He thought the problem will be resolved once the acquisition is completed for it will not need to bear the huge cost for the parent company any more. In addition, cost for purchasing and human resources will go down too after the deal.

Liu acknowledged frankly there exist three risks for the prospect of profit making, a major concern for people outside Lenovo. The old customers of IBM will probably not buy Lenovo's products; employees may leave the companies due to change of shareholder; friction may occur between the two sides. "But two and a half of the risks have been overcome", said Liu. None of the IBM employee Lenovo wants to keep has left so far, because they look forward to have new room for growth. In addition, Lenovo has quite good performance in management, and the both sides are harmonious in operation.

By People's Daily Online

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