Shanghai Daily news

Learning English and integrating two supply chains will be among Lenovo Group's first important tasks as it merges operations with its IBM acquisition in the United States, Chairman Yang Yuanqing said yesterday during an online chat with Chinese Internet users.
His cyber talk followed Wednesday's announcement that Lenovo bought IBM Corp's personal computer business in a deal valued at US$1.75 billion.
Yang revealed his biggest concern is maintaining Big Blue's current clients and staff while combining two different corporate cultures. Accomplishing those tasks, he said, is the key to success for what will become the world's third-largest PC maker.
Yang is clearly focused on bridging the culture gap.
"I have talked with our new chief executive officer, and we probably will adopt English as our future official language," said Yang, who became chairman when the deal was announced.
Stephen M. Ward Jr, IBM senior vice president and general manager of IBM's PC business, was named chief executive officer.
"We will give our (Chinese) employees a transitional period," he said, adding that the company will hire language teachers to provide training.
"First they have to learn to read and write in English, then listen, and finally they need to speak in English," he said.
The company will employ nearly 20,000 workers, half from Lenovo, China's largest computer supplier over the past seven years. The new Lenovo plans to set up worldwide headquarters in New York and conduct principal operations in Beijing and Raleigh, North Carolina.
In the following 12 to 18 months, Lenovo will focus on integrating two separate supply chains, largely to cut costs.
"We will reorganize our logistics system and production facilities and planning in the first phase of integration," Yang said. "The two units will also handle procurement together to gain lower prices," Yang said.
In the second phase, the group will merge the Lenovo and IBM product lines, covering the entire PC sector from low to high end.
The deal signed on Wednesday calls for Lenovo to hand over US$1.25 billion in cash and shares, giving IBM an 18.9 percent stake in the company. Lenovo will also take on US$500 million in IBM debt.
Based on 2003 sales, the new company would rank behind Dell Inc and Hewlett-Packard Inc in the world PC market.
The initial reaction from investors was not enthusiastic. Lenovo's stock fell by nearly 10 percent to 2.425 Hong Kong dollars (31 US cents) over the past two days on the Hong Kong Stock Exchange.