You have to love this story.  The legendary Hummer brand may soon be based in Chengdu, under the ownership of Sichuan Tengzhong Heavy Industrial Machinery Co.  My first thought is, YAY for Chengdu.  My second thought is more along the lines of, “What a strange world seems to be emerging from this recession…”

In an interesting twist on the outsourcing battles,

“GM will continue producing Hummer H2 and H3 trucks and SUVs at plants in Louisiana and Indiana for the buyer.”

 
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Technorati Tags:  China, China Outsourcing, Chengdu, Hummer

When I was consulting with western companies I always advised my clients to be cautious about dealing with Chinese State Owned Enterprises (SOE).  In fact, I generally urged them to steer clear because SOEs are well known to make decisions for political reasons that may be contrary to the best interests of the business.  Further, SOEs rarely have any particular motivation to “play ball” with their western partners.

With that context in mind, I’ve watched the U.S. nationalize broad swaths of the financial industry, and now the government is taking over automobile manufacturing.  This story was all over the media today, but I like the WSJ, so I’ll quote from their report:

“… plan that would give the U.S. government a 72.5% stake and keep the auto maker closely held for as many as 18 months.

The government is set to boost its support for GM by as much as $50 billion through a bankruptcy filing that could come Monday.”

The only U.S. made cars that I’ve owned since 1980 were Fords (and that was some time ago – gotta love the F-250 4x4), so I guess that I can take some comfort in that.  Anyway, we’re now in a position where major chunks of our financial system, and our “too critical to fail” manufacturing infrastructure are, effectively, SOE’s.  Maybe, in the 21st century, our government is taking its lead from China.  Given the relative performance of our two economies, maybe it’s not such a bad thing, but it’s tough to accept for a guy like me, who learned about business way back in the 20th century.

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Technorati Tags:  China, Nationalization

RingDance, provides a soothing audiovisual encounter with eight brightly colored rings dancing on your iPhone™ or iPod touch™.  When the rings touch, they exchange colors and produce a gentle sound.  The calming melodies from the dancing rings create a relaxing environment that enables you to either focus your thoughts, or completely surrender to the otherworldly music.

Readers of this blog will, of course, understand the significance of the eight rings.

RingDance is available on the App Store.

Technorati Tags:  iPhone, iPod Touch, Apple, mobile, iPuck, iPunt, RingDance

Find iPhone apps at AppStoreHQ

According to an article in the Wall Street Journal,

“The Cleveland Cavaliers have signed an agreement with an investment group from China to become minority owners of the NBA franchise and its arena, a partnership that could affect superstar LeBron James’ future with the team.”

Apparently the group could end up owning as much as 15% of Cavaliers Operating Company, the entity that owns the team and operates the ironically sponsored “Quicken Loans Arena.”

The story suggests that the expanded marketing opportunities in China could help keep LeBron James in Cleveland after next summer, when he will be eligible to become a free agent.

I have two comments.  First, anybody who wants to argue that (h/t to Thomas Friedman) the world is not flat should ponder the implications of this story.  Second, I’m an old guy, so I remember a time when groups from Japan were buying lots of overpriced American assets of questionable real value.  That didn’t work out so well.  Why is it always entertainment related stuff that turns out to be such “interesting” investments for the newly wealthy (Pebble Beach, Rockefeller Center, …)?

In other news, we are waiting for our newest app to be approved for sale on the Apple App Store (it should hit this week).  Version 1.0.1 of iPuck should also hit this week.  (We hope…)

Technorati Tags:  China, iPhone, iPod Touch, Apple, Mobile Perspectives, BluMtnWerx

I sincerely apologize for neglecting this blog.  My only excuse is that I’ve been completely consumed by a new venture.  A small group of us recently founded a company to do software development for mobile devices.  Software and software engineering was my first love, and this is an exciting opportunity to get back to actually building some interesting products for a new computing paradigm (bet you haven’t seen that phrase for awhile - shows how old I am).

The new group is BluMtnWerx.  Our first two iPhone / iPod touch apps, iPunt and iPuck are now available on Apple’s App Store here and here (links will take you right to the iTunes App store).

Find iPhone apps at AppStoreHQ

Find iPhone apps at AppStoreHQ

iPunt is a 3-D immersive environment that is impossible to categorize.  You kind of have to play it for yourself to get the idea.

iPuck is a casual arcade game that involves using your ring to guard your goal while trying to smack the puck into the opponent’s goal.

We have a third app in its final testing stages and we’re planning on a major upgrade for iPunt in the very near future.

By way of apology for my long silence, I have a handful of app promo codes left that I’d be happy to share with “Go East” readers.  Just get in touch with me - first-come, first-served.  All that I ask is that you take a couple of seconds to give us a rating on the app store.

I’ll certainly continue to post on this blog, but the majority of my new writing will be on the BluMtnWerx Mobile Perspectives blog, so please check there if you’re interested in my most up to date ranting.  Also, I’m trying to drum up followers on Twitter, if you’re using that strangely popular service - http://twitter.com/deansx

Technorati Tags:  iPhone, iPod Touch, Apple, Mobile Perspectives, BluMtnWerx

Another plug for my favorite city in China.  The Wall Street Journal is reporting (sorry, subscription required) that:

“Intel Corp. said Thursday it will move its Shanghai chip-testing and assembly operations to Chengdu, a city in southwestern China, in line with efforts to shutter plants and cut jobs world wide as the chipmaker tries to cope with the global economic slowdown.”

Apparently, the move will displace approximately 2K workers in Shanghai.

I’m telling you, Chengdu is the place to be!

Technorati Tags:  Chengdu, China, China Outsourcing

I know that Yahoo management isn’t really a China outsourcing issue, but I couldn’t resist commenting on this bit of management wizardry.  The Silicon Valley Business Journal reported on some curious tensions (subscription may be required) between their new CEO and the diehard “Yahoos.”  Apparently, someone is in for some culture shock:

“…a reported offer made by new CEO Carol Bartz Friday to help pay a $1,000 bounty for information on who in the Sunnyvale company is leaking information to the press.”

That has to really be a motivator to those clinging to the freewheeling Yahoo work-style!

Continuing,

“…Bartz was critical of employees showing up late for meetings and for using the word silo to describe how units of the company operate.”

I know that Ms. Bartz needs to make her mark on the company, but are these really the kinds of issues that she’s going to take on?  What kind of message does she imagine the battered “Yahoos” that haven’t managed to abandon the ship, yet, will take from her $1K bounty?  Did this kind of stuff really work at Autodesk?

Curious…

The Wall Street Journal published a frightening article about the health of some of China’s leading companies.  (Sorry, subscription required).

According to the piece:

“A string of dire profit warnings has signaled a rapid deterioration in the financial health of Chinese companies on which the world’s third-biggest economy heavily depends, putting more pressure on the government to enhance its stimulus efforts.”

The story continues with a message for those of us who were hoping that China’s domestic economy would allow the country to weather the economic storm:

“The warnings have come from a range of industries, but companies tied to shrinking global trade are particularly badly hit. China Shipping Container Lines Co. Ltd. has warned investors annual profits for 2008 fell more than 50%. The world’s largest producer of shipping containers, China International Marine Container, said its annual profit likely dropped about 53% to 1.5 billion yuan ($219 million). Output of its main product, dry-bulk containers, “basically stopped in the fourth quarter,” CIMC said.

Businesses focused on China’s domestic market are also in trouble. SAIC Motor Corporation Ltd., the biggest local auto maker by sales, warned of a profit decline of more than 50% on weaker sales. Most steelmakers are losing money as construction dries up. Financial giant China Life Insurance Co., hammered by the stock market decline and tougher competition, also said it expects a more than 50% drop in profits.”

It strikes me that protectionist sentiment, like the “Buy American” requirements in the new U.S. “Stimulus” plan will only exacerbate this problem.  On the “silver lining” side, however, perhaps our vendors will see less wage inflation pressure, which may allow them to set blended rates for outsourcing that are even more competitive with other regions.

Technorati Tags:  China, China Outsourcing

I keep telling myself that I’m going to stop writing about the troubles at Satyam, but it seems like more shocking stuff keeps coming out.  In the latest bit of corrupt behavior, the Wall Street Journal reports that Mr. Raju actually skimmed money from the company through payments to 13K phantom employees:  (Sorry, subscription required)

“The disgraced former chairman of Satyam Computer Services Ltd., B. Ramalinga Raju, used salary payments to 13,000 fictitious employees to siphon millions of dollars from the Indian outsourcer for land purchases, prosecutors said Thursday.

Prosecutors in the southern Indian city of Hyderabad, where the technology-outsourcing firm is based, told a criminal court that Satyam has only about 40,000 employees instead of the 53,000 it claims.

Prosecutors claimed the money, in the form of salaries paid to ghost employees, came to around $4 million a month. The money was diverted through front companies and through accounts belonging to one of Mr. Raju’s brothers and his mother to buy thousands of acres of land, the prosecutors said.”

It just keeps getting better.

Technorati Tags:  Satyam, China Outsourcing

The Wall Street Journal (sorry, subscription required) reports that Wipro is expecting things to get worse:

“Wipro Ltd. […] warned that revenue from its software-services business would decline.

Wipro, India’s third-largest software exporter by revenue after Tata Consultancy Services Ltd. and Infosys Technologies Ltd., also said it has fewer clients than in the previous quarter as the financial crisis deepens.

While some of this may be specific to India, what with the latest “troubles” there, I’m also hearing scattered reports of similar prospects among the leading Chinese software/IT outsourcing companies.  In fact, many of the Chinese firms are starting to seriously shift their focus to winning domestic business.  Hold on to your hat…

Technorati Tags:  China, China Outsourcing