Sell-off of Honor consumer brand should allow newly independent company to ‘very quickly’ resume production formerly hobbled by US sanctions, says Ren Zhengfei
Huawei founder Ren Zhengfei called the company’s divestment of its Honor brand a “clean break” and urged the departing employees to strive to surpass the former parent.
In a speech to staff later posted on an employee forum, Ren said he expected the sell-off to allow Honor to “very quickly resume” production, following years of US sanctions that have hobbled Huawei’s own production lines.
“Under its new leadership, Honor will very quickly resume production and resolve issues affecting its upstream and downstream partners,” Ren said.
“The US is a technology superpower that has many excellent companies. You should firmly and boldly work with them.”
His comments appeared to be intended to address uncertainty over whether Honor would be able to immediately resume production using US components, or whether additional US regulatory steps would be required.
The US government has progressively imposed more sanctions on Huawei since 2018 as part of a broader trade war between the US and China. US authorities claim Huawei poses a national security threat, which the company denies.
The most recent round of sanctions, aimed at closing off loopholes that had allowed Huawei to continue accessing supplies of new microprocessors, has had a disproportionate effect on the company’s consumer business.
Its telecommunications equipment unit, which notably is a leading supplier of 5G technology, has been able to continue with the aid of stockpiled chips that are expected to allow it to remain in business at least through 2021.
Huawei announced earlier this month it would sell Honor to a new entity called Shenzhen Zhixin New Information Technology, formed of its agents and dealers, in order to give Honor continued access to US technology.
“Wave after wave of severe US sanctions against Huawei has led us to finally understand, certain American politicians want to kill us, not just correct us,” Ren said in the speech.
He said the sale would allow “millions” of employees at Honor’s agents and distributors around the world to retain their jobs.
“We don’t have to drag innocent people into the water just because we suffer,” Ren said.
Ren urged Honor to become Huawei’s biggest competitor after the split, saying toppling Huawei should “become your slogan for motivation”.
Honor-brand smartphones made up 26 percent of the 51.7 million smartphone handsets Huawei shipped in July to September, according to Canalys.
The unit also manufactures laptops, tablet computers, smart TVs and electronic accessories.