Or is it Outsourcing to Insourcing?

Did I just buy a computer that was made in (gasp) Communist China?

Is this unpatriotic? Or is it patriotic?

Did Chairman Mao just turn over in his grave?

mao

These questions seem to suggest not only how much yours truly has changed, but how the world has shifted its attitudes and business practices in the past four decades.

One suspects that Henry Kissinger knew that his secret trip to China in 1971 had the potential to change the geopolitical balance of affairs, but the question is how much? And it is clear that Deng Xiaoping altered China for the better by coming to the obvious conclusion that Capitalism even with its well-documented flaws is still light years better than Cultural Revolutions and collective farms.

Having said that, it is Big Leap Forward from Kissinger’s sub-rosa journey and Deng’s landmark reforms to the significance of my purchase of a Lenovo Ideapad laptop for $600 (Best Buy) powered by an Intel Core i5 microprocessor (Santa Clara, CA) and controlled by Microsoft’s Windows 8 operating system (Redmond, WA).

And now good ole boys and girls in Whitsett, North Carolina are hard at work producing more PCs, hybrid PCs/tablets (e.g, Lenovo Yoga) and servers for a company that was started in 1984 by a $25,000 state (Chinese Academy of Sciences) investment…the state that brought a chilling new meaning to the words, Tiananmen Square.

Yep, I bought a laptop from a company that was created by an investment made by Communist China and held its first meetings in a guard shack.

Back in days of the Evil Empire, I made my first trip overseas…and not to a place in which most post-college bachelors go for vacation: Russia. It was the 1981 Soviet Union of that fun-loving guy, Leonid Brezhnev.

Upon returning my maternal grandfather told me there were two places he never wanted to go to: One was hell; the other…you guessed it.

Just as if it was yesterday, I remember after a performance of the Bolshoi Ballet standing on the edge of Red Square with the onion-dome masterpiece, flood-lit St. Basil’s, on the opposite end…Ground Zero of the Cold War. Deep down inside I was hoping that this would be neither the time nor the place for a thermonuclear confrontation, particularly at that exact time.

Reflecting back on my visit to the country of 11 time zones, which is a must for any student of modern history and politics, I can see the average people packed like sardines into trolley cars, while the most equal-of-the-equals zipped on by in special lanes for their Zil limos. The USSR even took Diner’s Club, Carte Blanche along with Visa and American Express. When were the Reds coming back?

I didn’t like Communism before I made this trip. I liked it even less after my visit.

If you asked me at the time, if I would ever buy any product made by a communist country that treats its people as if they were sheep, the answer would be an emphatic, “nyet” or “het” in Cyrillic.

lenovoideapad

Serving as a director of corporate public relations for a Silicon Valley hardware innovator and later as a vice president for an international public relations agency, I wore out at least three IBM Think Pad laptops.

“What’s this blue screen?” I would ask one of our all-knowing IT managers. “Ah, did you back up your files?” I was asked. “What if I didn’t? I replied. Welcome to the “Blue Screen of Death.”

Little did I appreciate was that IBM (e.g., Itty Bitty Machines) was outsourcing a portion of its ThinkPad business to China’s Lenovo, and then Big Blue outright sold the its corporate PC business to Lenovo in 2005. I have been using a Chinese laptop for the better part of a decade, and last year I doubled downed on this bet.

Reading about Lenovo, I discovered that English is the $30 billion company’s official business language. It maintains two headquarters, one predictably in Beijing, and the other at IBM’s former PC hub in Morristown, NC. And just this year, Lenovo started manufacturing in the aforementioned Whitsett in the Tar heel State.

Let’s see…IBM outsourced a portion of its PC business to China, taking advantage of lower Chinese manufacturing costs and giving the company greater access to the world’s largest market. Eventually IBM (which invented the PC in 1981) sold the business to Lenovo. And now global market share leader Lenovo is outsourcing a portion of its PC business to the United States or insourcing the business in North Carolina, if you prefer that point of view.

Topping it off, China is becoming a more expensive place to manufacture with each passing day and the US is getting cheaper as demand for skilled Chinese labor is going up. The Pacific Ocean is just as big as ever and shipping costs are a major factor. Cost parity is expected in two years.  Lenovo is outsourcing PC production to the United States, bringing it closer to US customers and key suppliers including Intel and Microsoft.

Does this mean that buying a Chinese computer is patriotic? That seems like a stretch, particularly for a guy who saw the Evil Empire up close and personal.

If you agree that buying a Chinese computer is actually patriotic, then financing the nation’s $17.4 billion debt through China occasions playing of the Star Spangled Banner.

So why are we upset about outsourcing?

And what is the true meaning of outsourcing anyway?

Or is it actually insourcing?

Who the heck knows?

http://www.economist.com/news/special-report/21569572-after-decades-sending-work-across-world-companies-are-rethinking-their-offshoring

http://www.economist.com/news/business/21569398-how-did-lenovo-become-worlds-biggest-computer-company-guard-shack-global-giant

http://www.economist.com/blogs/graphicdetail/2013/05/focus

http://en.wikipedia.org/wiki/Lenovo

http://www.cnbc.com/id/100651692

http://en.wikipedia.org/wiki/Deng_Xiaoping

https://en.wikipedia.org/wiki/Tiananmen_Square

http://en.wikipedia.org/wiki/Leonid_Brezhnev

http://news.lenovo.com/article_display.cfm?article_id=1635

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