Liu Steps Down at Lenovo — Again 柳传志再度卸任联想董事会主席
China’s business world is fast becoming the land of deja vu, at least from my perspective. Just a day after Apple (Nasdaq: AAPL) snubbed China for a second time by excluding the country from its international launch list for its latest hot product (previous post), PC powerhouse Lenovo (HKEx: 992) has announced that co-founder Liu Chuanzhi is stepping down as chairman for a second time. (company announcement) But the deja vu doesn’t end there. Not only is Liu stepping down a second time, but his heir apparent is Yang Yuanqing, who also took over the chairmanship the first time Liu stepped down shortly after his company’s historic purchase of IBM’s (NYSE: IBM) PC assets in 2005. My question is: if Yang couldn’t succeed the first time, which prompted Liu to return to the chairmanship in 2009, then why does Liu suddenly think he will succeed now? In all fairness, things are a little different this time around. The last time Yang was named chairman, an American, Bill Amelio, was also brought in as CEO to help Lenovo digest its then newly-purchased IBM business. That combination proved too difficult for Lenovo, which incurred losses and underwent a major restructuring that prompted Liu to return as chairman in 2009. This time around, Lenovo has also just posted very nice earnings that saw its profit surge 88 percent in its latest quarter (English article), partly due to recent acquisitions in Germany and Japan, as it zoomed past Dell (Nasdaq: DELL) to become the world’s second biggest PC seller, behind only Hewlett-Packard (NYSE: HPQ). But those new acquisitions also look very much like the IBM purchase, in that both are in mature Western markets, which have been a difficult area for Lenovo in the past. I would like to think that Yang could succeed this time and Liu, now in his 70s, can permanently retire. But I sense that Yang’s return will signal more rocky times ahead, with earnings likely to take a hit as Lenovo stumbles in trying to integrate its Western acquisitions and grab more global market share.
Bottom line: Liu Chuanzhi’s departure as chairman of Lenovo for a second time signals a rocky period ahead for the company.
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◙ Acer Trips, Lenovo Next? 联想应避免重蹈宏基覆辙
◙ Huawei, Lenovo Look to Foreign Advisors in Westward Drive
