Huawei founder's farewell remarks to Honor

"Be the strongest competitor to Huawei"

Huawei is in the news but this isn’t about CFO Meng Wanzhou’s homecoming :)

The Washington Post last week reported key security agencies are divided over whether to place Huawei’s former smartphone company on an export blacklist, after a group of 14 Republican lawmakers in the U.S. House of Representatives asked the Commerce Department to add Honor to the Entity List for sanctions in August, as reported by Reuters:

Being added to that list bans companies from buying parts and components from U.S. companies or using American technology without U.S. government approval.

The Republican lawmakers argued that Honor was spun off “in an effort to evade U.S. export control policies meant to keep U.S. technology and software out of the hands of the Chinese Communist Party (CCP).”

The letter cited analysts saying that “selling Honor gave it access to the semiconductor chips and software it relied on and would have presumably been blocked had the divestiture not gone through.”

So, what’s Huawei’s outlook for the future with Honor? In addition to its official statement on their separation, Huawei founder Ren Zhengfei made a brief farewell speech on November 25, 2020.

As in the past, the speech was sourced from Huawei’s Xinsheng Community, an online forum open to the general public featuring some corporate documents, executives’ speeches or emails, and employee discussions.

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Ren Zhengfei’s farewell speech to Honor (Mandarin)

November 25, 2020

We will say farewell to each other. As we have worked together for over ten years, it is reluctant for us to go separate ways. I feel both bad and excited. We live in a great era, and also in the toughest times. We were originally tender grass, but the fierce storms these years did not crush us. Tempered by difficulties and hardships, we may grow up in a few years and thrive eventually. You are leaving, and we’ve got nothing for you, except the yellow leaves blown off by the bitter wind in autumn.

I. Why sell Honor

Huawei has faced wave upon wave of severe sanctions imposed by the United States. It finally dawned on us that some United States politicians are not trying to put us right but to knock us out. We have the ability to overcome short-term difficulties facing Huawei. We don’t have to drag innocent people into the water just because we suffer.

Agents and distributors in 170 countries will be starved because the waters in the channels have been dried (by the United States), causing millions of people to lose jobs. Because we are unable to make purchases, suppliers will have overstock and suffer declining sales, which will affect their market capitalization. What have they done wrong? Why can’t we make some sacrifices?

You (Honor) are to share weal and woe with them so that the dry channels can be filled with flowing water when the water source is not cut off (after the delinking of Huawei and Honor).

However, you are not a Savior. You must be religiously loyal to your customers, safeguard the interests of your customers, and respect your commitments to suppliers. A business spirit is the basis for you to become invincible. Honor produces mid- and low-end products. After delinking, Honor shall quickly resume production under the leadership of Shenzhen Zhixin New Information and solve the difficulties faced by upstream and downstream partners.

We have worked together for more than a decade. Under our rigorous management, a group of innocent and romantic young intellectuals has become the soldiers who can work hard and persevere. I apologize for some of our stringent methods in the past. I see you off today with reluctance.

When the autumn wind is picking up, and the ground is covered with yellow leaves, the wind may be colder out there. We can no longer shelter you against the wind and rain. Take good care of yourself.

II. How to do this well

First, restore the water supply in the channel as soon as possible. If the channels run dry for a long time, the grass will wither, and it will be difficult to bring it back to life. “Water, water, water!” Why do the ethnic Dai people have this slogan? Because the water in the channels is life-saving.

You should fully embrace globalized industrial resources and forge relationships with suppliers as soon as possible. Supply is a complex issue involving many aspects. You face greater difficulty than that of any new company. How to overcome the difficulties is a matter for you.

You shall keep learning from who are ahead of you, including from whom you don’t like. You shall resolutely embrace globalization, and step up efforts to work with companies from Britain, the United States, Europe, Japan, Taiwan, and South Korea. The United States is a world power in science and technology and has nurtured many outstanding companies. You must carry out cooperation with them firmly and boldly; at the same time, you must cooperate with domestic partners and seek common progress.

You must sustain the fine traditions that have been developed. Your corporate officials and experts must be globalized, professional, and diversified. Except for the localization of staff, you must prudently decentralize authority, so that you have the global business committed to one plan and you can avoid regional executives disobey business decisions from the company and deviate from the company.

A reasonable mechanism for terminating employees is a supplement to the positive incentives for the team. You shall respect the employees, evaluate employee performance scientifically, and adhere to a system that’s responsibility- and result-oriented. You will operate independently of Huawei, and there will be difficulties. You shall act prudently and resolutely, and do not relent.

Bear in mind the goal and direction, do what is worthwhile and discard what is inappropriate; keep innovating, and never allow the workforce to go into disorder.

III. Be the strongest competitor to Huawei in the world, surpass Huawei, and even uphold the slogan of “taking down Huawei” for self-motivation.

You shall keep improving yourselves, and march forward in the right direction; the organization shall remain vibrant, and employees shall have a strong will and thirst for victory. You shall resolutely oppose corruption and all acts of embezzlement and theft.

You shall retain the useful practices and rules from the past, manage the team in a science-based and comprehensive manner, and march forward steadily. There will be setbacks, but do not panic. Bring into play the power of collective thinking, make bold decisions, but don’t act arbitrarily. Unite on the way forward.

Today is our “divorce” ceremony, so I won’t talk much. Once “divorced,”  we shall not be entangled anymore. We are adults, and we handle separation in a rational manner. We shall strictly uphold compliance in management, abide by international rules, and strive for our respective goals.

We must not act like young lovers who blow hot and cold without making definite decisions (once and for all). Don’t feel sorry for Huawei. Think about your future! We will be competitors. You can resort to “foreign guns” and “foreign artillery”, and we will have new domestically made “weapons.”

The jury is still out over who will be the winner. We will not pull our punches in the competition with you. Some of you will shout "defeat Huawei” in the competition - don’t be hard on them, they are the heroes.

Parting ways is harder than staying together, and the autumn wind turns the leaves yellow. I wish you Godspeed.

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By Alexander Wang, a contributor, and Zichen Wang, founder of Pekingnology. Don’t hesitate to reply should you have any questions, suggestions, or criticism.