Did Hp Fires China Chairman Mao Yunan?

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Did Hp Fires China Chairman Mao Yunan?
Hp Reshuffle Management After Worker Protests

Hewlett-Packard Co. made changes to its top management at a subsidiary in China following a worker protest, highlighting the increasing difficulties U.S. companies face in doing business in the mainland amid suspicion by both countries that foreign-made equipment could be exploited for intelligence-gathering purposes.
Last week, cubicles at the Beijing branch office transformed into a sea of red-lettered signs with slogans such as “All workers strike to win our rights.”

According to an internal email reviewed by The Wall Street Journal, H-P Chief Executive Meg Whitman told employees of Chinese network equipment subsidiary H3C Technologies Co. on Sunday that it would be promoting former H3C Chief Operating Officer Henry Xiang-Ying Cao as CEO. Mr. Cao will assume a post that had been held by Jessie Jing-Chuan Wu, who will become vice chairman.

Ms. Whitman has also offered workers long-term financial incentives, according to a separate email Friday seen by the Journal.

Workers at H3C had been pushing for incentives and had protested a recent move that made H-P China Chairman Bob Mao double as the unit’s chairman. The company hasn’t reversed that appointment.

The management changes came after the Journal reported in October that H-P has run a process to find a Chinese buyer for a majority stake in H3C since last year, according to people familiar with the situation. H-P decided to explore selling around half of the business, targeting Chinese buyers who could help H3C win more domestic contracts, they said. Potential buyers for the stake include domestic private-equity firms and Chinese technology companies, or a combination of the two, they said.

The business, which could be valued at up to $5 billion in a sale, according to people familiar with the matter, has its roots as a unit of Chinese telecom equipment maker Huawei Technologies Co. But under H-P’s ownership, it risks being viewed as a foreign company as China looks to boost its domestic technology companies. H-P hopes it can continue using the Chinese operation as a manufacturing base for its global networking business after the stake sale, these people said at the time.

H3C has built a reputation as a credible rival in some varieties of networking equipment to Silicon Valley giant Cisco Systems Inc., in some cases offering lower prices to build its market share. The company was formed in 2003 as a joint venture between U.S.-based 3Com Corp. and Huawei. 3Com bought out Huawei’s stake in 2006. H3C became a unit of H-P after the big technology company purchased 3Com in a $2.7 billion deal announced in 2009.

“H-P remains committed to the China market and our H3C business,” an H-P spokeswoman said Sunday. “With today’s changes, we are confident that we have the right leadership team in place to continue to grow in this important market.”

A potential change in control at H3C figured into the protest by workers, some of whom stopped coming to work over the past week and posted slogans in their offices. Some employees, in interviews, pointed to what they said is a conflict between H3C’s ownership by a U.S. company and the unit’s aspirations to be a main supplier of networking equipment to the Chinese government, which has become increasingly wary of foreign communications gear in the past year.

Last week, cubicles at the Beijing branch office transformed into a sea of red-lettered signs with slogans such as “All workers strike to win our rights.”

Some workers also said a tighter integration between H3C and H-P China—represented by the appointment of Mr. Mao—would hurt the long-term prospects of their company. They sought a new internal leader instead, and asked for stock so that if the unit were sold, they would also benefit.

Workers said they were returning to work Monday as their newly elected representative committee discussed whether they would accept the new terms.

Ms. Whitman wrote that she had talked with Ms. Wu over the weekend before deciding to change the unit’s leadership structure. “Her candid insights and strategic vision were invaluable to me in better understanding the best path for H-P,” Ms. Whitman wrote.

She also said Mr. Cao is the right person to follow in Ms. Wu’s footsteps.

“As you all know, China is not only critical to H-P’s long-term success, but it is also a very special place for me personally,” Ms. Whitman wrote. “The future of H3C is in our hands, and I am counting on all of you to ensure that we close the quarter strong and deliver an outstanding 2015.”

H-P isn’t the only U.S. technology company finding it difficult to operate in China. In the past year, China has also announced anti-monopoly investigations into Qualcomm Inc. and Microsoft Corp. Both companies have said they are cooperating with the investigations.—Rick Carew in Hong Kong contributed to this article.

http://www.cbronline.com/news/tech/cio-agenda/the-boardroom/hp-orders-china-reshuffle-after-worker-protests-4496412

Did Hp Fires China Chairman Mao Yunan?
Hp Reshuffle Management After Worker Protests

Hewlett-Packard Co. made changes to its top management at a subsidiary in China following a worker protest, highlighting the increasing difficulties U.S. companies face in doing business in the mainland amid suspicion by both countries that foreign-made equipment could be exploited for intelligence-gathering purposes.
Last week, cubicles at the Beijing branch office transformed into a sea of red-lettered signs with slogans such as “All workers strike to win our rights.”

According to an internal email reviewed by The Wall Street Journal, H-P Chief Executive Meg Whitman told employees of Chinese network equipment subsidiary H3C Technologies Co. on Sunday that it would be promoting former H3C Chief Operating Officer Henry Xiang-Ying Cao as CEO. Mr. Cao will assume a post that had been held by Jessie Jing-Chuan Wu, who will become vice chairman.

Ms. Whitman has also offered workers long-term financial incentives, according to a separate email Friday seen by the Journal.

Workers at H3C had been pushing for incentives and had protested a recent move that made H-P China Chairman Bob Mao double as the unit’s chairman. The company hasn’t reversed that appointment.

The management changes came after the Journal reported in October that H-P has run a process to find a Chinese buyer for a majority stake in H3C since last year, according to people familiar with the situation. H-P decided to explore selling around half of the business, targeting Chinese buyers who could help H3C win more domestic contracts, they said. Potential buyers for the stake include domestic private-equity firms and Chinese technology companies, or a combination of the two, they said.

The business, which could be valued at up to $5 billion in a sale, according to people familiar with the matter, has its roots as a unit of Chinese telecom equipment maker Huawei Technologies Co. But under H-P’s ownership, it risks being viewed as a foreign company as China looks to boost its domestic technology companies. H-P hopes it can continue using the Chinese operation as a manufacturing base for its global networking business after the stake sale, these people said at the time.

H3C has built a reputation as a credible rival in some varieties of networking equipment to Silicon Valley giant Cisco Systems Inc., in some cases offering lower prices to build its market share. The company was formed in 2003 as a joint venture between U.S.-based 3Com Corp. and Huawei. 3Com bought out Huawei’s stake in 2006. H3C became a unit of H-P after the big technology company purchased 3Com in a $2.7 billion deal announced in 2009.

“H-P remains committed to the China market and our H3C business,” an H-P spokeswoman said Sunday. “With today’s changes, we are confident that we have the right leadership team in place to continue to grow in this important market.”

A potential change in control at H3C figured into the protest by workers, some of whom stopped coming to work over the past week and posted slogans in their offices. Some employees, in interviews, pointed to what they said is a conflict between H3C’s ownership by a U.S. company and the unit’s aspirations to be a main supplier of networking equipment to the Chinese government, which has become increasingly wary of foreign communications gear in the past year.

Last week, cubicles at the Beijing branch office transformed into a sea of red-lettered signs with slogans such as “All workers strike to win our rights.”

Some workers also said a tighter integration between H3C and H-P China—represented by the appointment of Mr. Mao—would hurt the long-term prospects of their company. They sought a new internal leader instead, and asked for stock so that if the unit were sold, they would also benefit.

Workers said they were returning to work Monday as their newly elected representative committee discussed whether they would accept the new terms.

Ms. Whitman wrote that she had talked with Ms. Wu over the weekend before deciding to change the unit’s leadership structure. “Her candid insights and strategic vision were invaluable to me in better understanding the best path for H-P,” Ms. Whitman wrote.

She also said Mr. Cao is the right person to follow in Ms. Wu’s footsteps.

“As you all know, China is not only critical to H-P’s long-term success, but it is also a very special place for me personally,” Ms. Whitman wrote. “The future of H3C is in our hands, and I am counting on all of you to ensure that we close the quarter strong and deliver an outstanding 2015.”

H-P isn’t the only U.S. technology company finding it difficult to operate in China. In the past year, China has also announced anti-monopoly investigations into Qualcomm Inc. and Microsoft Corp. Both companies have said they are cooperating with the investigations.—Rick Carew in Hong Kong contributed to this article.

http://www.cbronline.com/news/tech/cio-agenda/the-boardroom/hp-orders-china-reshuffle-after-worker-protests-4496412

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January 26, 2015 at 11:14 AM