Huawei Enters ‘Battle Mode’ To Beat US Blacklisting

The founder of Huawei Ren Zhengfei has warned staff members to prepare for reform of the company, as it enters ‘battle mode’ to survive the US blacklisting.

Zhengfei made the comments in a memo to staff members, in which he warned that Huawei was “live-or-die moment”.

Earlier this week US Commerce Secretary Wilbur Ross said the US government would extend a reprieve that allows US companies to trade with China’s Huawei for another 90 days.

US blacklisting

Huawei is currently on the US entity list, having been placed there ever since President Trump signed an executive order in May.

The US Commerce Department then immediately added Huawei and 70 affiliates to its so-called Entity List, which bans them from buying parts and components from US companies without US government approval.

The US Commerce Department had given Huawei a 90-day stay of execution to the imposition of trade restrictions on Huawei – meaning was still allowed to buy US goods until 19 August.

But this week the US government decided to extend this reprieve in order to give US companies time to find other suppliers.

Commerce Secretary Ross also added an additional 46 Huawei subsidiaries to the national security “entity list”, which prompted a furious reaction from the Chinese firm.

“We oppose the US Commerce Department’s decision to add another 46 Huawei affiliates to the Entity List,” a Huawei spokesperson told Silicon UK via email. “It’s clear that this decision, made at this particular time, is politically motivated and has nothing to do with national security. These actions violate the basic principles of free market competition. They are in no one’s interests, including US companies.”

“Attempts to suppress Huawei’s business won’t help the United States achieve technological leadership,” the Huawei spokesperson said. “We call on the US government to put an end to this unjust treatment and remove Huawei from the Entity List.”

Battle mode

But now Huawei founder Zhengfei, has said the firm will spend more on production equipment this year to ensure supply continuity, cut redundant roles and demote inefficient managers as its grapples with a “live-or-die moment” in the wake of U.S. export curbs, Reuters quoted him as saying in an internal memo.

The staff memo on Monday was reportedly loaded with military metaphors, and Zhengfei asked staff to work aggressively towards sales targets as the firm goes into “battle mode” to survive the crisis.

“The company is facing a live-or-die moment,” Zhengfei reportedly said in the memo, which was seen by Reuters. Huawei apparently confirmed the contents of the memo.

“If you cannot do the job, then make way for our tank to roll; And if you want to come on the battlefield, you can tie a rope around the ‘tank’ to pull it along, everyone needs this sort of determination!” he reportedly added.

“In the first half, our results looked good, it is likely because our Chinese clients were sympathetic and made payments in time, the big volume made cash flow look good, this doesn’t represent the real situation,” he added.

“In 3-5 years time, Huawei will be flowing with new blood,” Ren reportedly said. “After we survive the most critical moment in history, a new army would be born. To do what? Dominate the world.”

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