economy – Huawei has a hard time in the US

The unlinkable Wall Street Journal describes the tribulations of China’s most successful telecom company Huawei. Successful, that is in other developing countries, but it has a hard time in conquering the US market.

With little experience in marketing, Huawei has struggled to build brand recognition in the U.S. It confused customers by using a new name for its U.S. business. With the headquarters in Shenzhen, China, hesitant to delegate, local executives have trouble adapting to the local culture. The company has been dogged by suspicions of cutting corners on intellectual-property rights, and alienated some job applicants by pumping them for detailed technical information. Huawei's successful formula winning business in other countries with low prices hasn't worked as well in a U.S. market marked by long-term ties between phone companies and their equipment suppliers.

Cultural differences and distrust made it very hard for American employees to function, as this telling anecdote shows:

Chad Reynolds, Huawei's former head of human resources for North America, says when he visited the headquarters in China he was forbidden from carrying his briefcase into any of the main meeting rooms. He says his employers worried about theft of product documents. He was never given a security pass and was accompanied by security personnel wherever he went. "I never felt like I was truly part of the family at Huawei," says Mr. Reynolds, who says he quit in spring 2003. Huawei declined to comment about Mr. Reynolds.

Another story of a US engineer is almost as telling:

Two years ago, David Fox, a software engineer who had worked at several area telecom firms, was invited for an interview in Huawei's Shenzhen headquarters. On the first day of his visit, Mr. Fox, then 39, says he was startled when a group of 25 to 30 Chinese engineers began peppering him with detailed questions on engineering minutiae, scribbling notes as he spoke. "It became evident that this wasn't an interview," says Mr. Fox. "They were pumping me for technical knowledge of the U.S."

The global threat of Chinese companies might be of a different category compared to the Japanese companies in the second half of the 1990s as I argued yesterday. Chinese companies are still very early in the process, I must admit, and Japanese companies did have their troubles in getting business in and trusted non-Japanese managers enough to give them important positions in their companies.