RALEIGH, N.C. – William Amelio, chief executive officer of Lenovo, assured an audience at the Emerging Issues Forum on Thursday that the Triangle was an important piece inn the worldwide computer manufacturing company that he is building.
In fact, as former Gov. Jim Hunt looked on, Amelio played off the Research Triangle name to describe how Raleigh fit into his plans. Hunt likes to tell the story about Chinese executives who once asked him about the “golden triangle,” referring to RTP.
“Raleigh is part of our Innovation Triangle,” Amelio told a crowd of several hundred. Business, government and education leaders braved snowy weather to attend the annual event that was inspired and is still put on by Hunt along with North Carolina State University and the Emerging Issues Institute.
“Raleigh is a key part for the Innovation Triangle partly because of the well educated workforce here,” he explained. However, Amelio said a global company such as Lenovo could not be taken for granted and that the state must produce knowledge workers if jobs are to be filled locally.
The 2007 Forum theme focused on the importance of education to North Carolina’s economy, and Amelio stressed that theme repeatedly during his speech that stretched well beyond half an hour.
“In conference calls, I ask exactly why we do so much recruiting in North Carolina,” he added. Reasons he was told include engineering, business schools, teamwork, well-rounded students, general management curriculum, and much more. Amelio also cited NCSU, Duke, UNC Chapel Hill plus East Carolina, North Carolina A&T, N.C. Central and others are schools producing graduates Lenovo finds interesting.
Companies without Borders
“However, North Carolina is not the only place we recruit,” Amelio said. For example, in China, 35,000 people applied for 200 positions.
And if North Carolina or the United States or anywhere else doesn’t produce qualified workers, he added: “There are lots of reasons for people to move operations. No country or state can take a business for granted in the future.”
Lenovo’s Raleigh area-based PC operation is linked with labs in Yamato, Japan and Beijing to form the Innovation Triangle. Citing development of a recent new product line from the company, Amelio said Lenovo “couldn’t have done it” as fast or at the cost that it did “if we had just used one lab.”
Because of a world “flattened by technology,” Amelio described how researchers in Raleigh worked seamlessly over the Internet with coworkers in Asia. Their joint efforts produced 24 hours of work each day, with one shift handing off to another.
The 24-x-7 “way of doing business” with what he called “cycle” teams produced “twice the amount of energy and work that could be done in 24 hours.”
Lenovo employs some 1,600 people in the Triangle.
Fewer Big Blue Faces
While Amelio kept referring to Raleigh, Lenovo is actually in the midst of occupying a new campus being built in Morrisville. Two of three buildings are now occupied.
State and local officials offered Lenovo $10 million in incentives to base its headquarters here and create 400 new jobs. However, the company laid off 1,000 people – approximately 350 of them former IBMers based in the Triangle – as part of a restructuring last March. Some other Lenovo workers in New York and Colorado were either transferred or offered the opportunity to move to the Triangle area.
Numerous former IBM executives have also left the company since Lenovo took over the division. The latest, top Americas executive Scott Smith, left last week.
Oddly, in his speech, Amelio cited “stable workers” as a strength of the Raleigh-area operation. Lenovo also will need “a stable, highly educated workforce” in the future. Companies should strive to be “sticky” so workers would “stay there and thrive there,” he added.
The company did report stronger than expected third quarter earnings on Thursday just a few hours before Amelio spoke. Cost savings due to the layoffs were part of Amelio’s strategy to improve profitability.
“I’m working hard at it,” Amelio told WRAL Local Tech Wire in a brief interview after his speech. “I’d like to be moving a little faster.
“We will continue to press forward in all four areas I have stressed: Transaction model rollout, supply chain improvements, desktop competitiveness and brand-building.”
Lenovo bought IBM’s personal computing division inn 2005 for $1.25 billion. Much of Big Blue’s computer operation was based around Raleigh. Lenovo has leased IBM facilities while its new campus was built.
Lenovo originated in China in 1984, three years after IBM launched its first PC, as Amelio noted in his remarks. Its purchase of the IBM division transformed the firm into an international operation. As part of the Lenovo restructuring that Amelio has directed since joining the company in late 2005, the company moved its international headquarters to Raleigh from Armonk, N.Y.
However, its financial headquarters remains in Hong Kong, and many of Lenovo’s facilities, employees and customers are located in China and elsewhere in Asia.
Amelio is familiar with the Triangle and IBM, having worked for the company 18 years. He was recruited by Lenovo from Dell, where he ran its Asian operations. Dell and HP are Lenovo’s biggest rivals. Amelio still lives in Singapore, where he had been based with Dell.
Targeting U.S. Market
In the interview, Amelio said Lenovo was preparing to launch an effort to expand market share in the U.S., with an emphasis on consumers and small business. Those were markets largely ignored by IBM. Lenovo’s PC shipments fell 4 percent in the last quarter.
“Within six months” the campaign will be launched, Amelio added. Asked why, he said the company sees the U.S. market as “an underserved market.”