Huawei's Rep Repair
9:20 AM -- After pulling its bid to buy the assets of 3Leaf Systems Inc. , Ken Hu, chairman of Huawei Technologies Co. Ltd. 's U.S. business, released an unprecedented love letter to America, declaring the company's respect for the "values of democracy, freedom, rule of law and human rights in the U.S."
In Huawei's Open Letter to the US, Hu rolled out the American hero quotes. He handpicked choice phrases from Lincoln, Obama and stopped just short of including lyrics from Neil Diamond and Toby Keith.
Seriously, though, in the letter, Hu takes on several popular myths about the Chinese equipment giant, including its alleged ties to the Chinese military -- a myth we busted long ago. Hu also goes on to, in a pretty straightforward way, describe the process by which Huawei provides vendor financing to its customers, thanks to credit lines from China's commercial banks. Oddly, this bit comes off making Huawei sound like it does indeed have a funding spigot that other vendors lack.
Hu provides an idea of just how much the Chinese government does back Huawei for research projects. "In 2010, Huawei received a total of RMB 593 million (USD$89.75 million) of financial support from the Chinese government for our research and development activities. All of this is consistent with financial support that is provided to normal businesses in China and in many other countries, including the United States," Hu writes.
This all comes up because the Committee on Foreign Investment in the United States (CFIUS) expressed concerns about Huawei purchasing 3Leaf's technologies and, on Feb. 11, Huawei said CFIUS recommended that it withdraw its notice to buy the assets.
Huawei wanted to fight for its cause, at first, but then backed off after the publicity and potential hassle that would follow were deemed not worth the effort.
One bit of the letter is remarkable: "We sincerely hope that the United States government will address this issue by carrying out a formal investigation of any doubts it may have about Huawei in an effort to reach a clear and accurate conclusion."
Indeed, Huawei just asked for a formal US government investigation, which is not the sort of thing foreign companies do unless they are desperate to clear their name, totally sure they've done nothing wrong or are just completely insane.
I wonder what specifically the CFIUS saw that it didn't like and how carefully it vetted its information. I don't compete with Huawei in the market, but given its expressed "hope" of resolution through investigation -- and its open door to the U.S. to come over and, well, open more doors -- it's hard not to be swayed that the company is suffering from a reputation it doesn't wholly deserve.
— Phil Harvey, Editor-in-Chief, Light Reading