
Did a Chinese Hack Kill Nortel? - remir
https://www.bloomberg.com/news/features/2020-07-01/did-china-steal-canada-s-edge-in-5g-from-nortel
======
Hongwei
My parents lost a small fortune in 2001 riding the tech crash down (Nortel was
a good chunk of that). I've been trying to explain to them (1st gen Chinese
immigrants) for the past three years that Nortel was killed partly by focused
Chinese spying and IP-theft by Huawei. CSIS has know about this for years.
They (my parents) just wouldn't believe it until I showed them this article.

Their former university classmates (who also immigrated to Canada) are likely
part of the 20 people that jumped ship to Huawei and implicitly may have
leaked data before then.

I'm glad this article got through to them, that it isn't just politics and
Huawei & the CCP really did go offside.

~~~
zyang
I interned at Nortel in early 2000's right before it all went down. I can tell
you the engineering culture was rotten within. No-one was doing anything
useful for years. Many orgs were built around milking the ancient layer 2
passport switch. The layer 3 router meant to compete with Cisco was 3 years
late and only sold a few dozen units. There was accounting fraud going on at
the highest level - delivery trucks circles around to pad the books.

I'm sure the hack happened. I just don't think it would had made any material
impact - there was simply not much to steal ¯\\_(ツ)_/¯

~~~
freshhawk
I was also there as an intern around the same time.

It was an insane place to get my first "office job" experience. Entire
buildings of hundreds of people all working on powerpoint reports about
potential training ideas for future projects to improve the production of the
powerpoint presentations made to summarize the reports on internal "sales"
numbers that are then filed without anyone reading them because everyone knew
they were too fudged to matter and the internal competition thing was a
smokescreen for fraud anyway. Who was embezzling what this week were
conversations coop students got to overhear.

I was there shortly before the whole thing collapsed and right before it did,
in my department, there was a lot of boat shopping combined with clock
watching as they waited for options to vest before the whole thing fell apart
(everyone knew it would soon).

~~~
chvid
We killed our own telecommunications industry by first throwing it into a
massive bubble and then starving the shit out of it.

It wasn't killed by spying Chinese communist; if anything it was killed by the
flipside of our capitalist system. The "madness of crowds" that drives "hot"
industries through periods of massive over-investment followed by massive
under-investment.

~~~
treeman79
Sounds like it was badly miss managmed. Better companies outsold it, causing
it to file bankruptcy.

This is one of the points of capitalism, Bad / wasteful decisions lead to
failure. Better managed companies rise. Consumers get better products cheaper.

------
sradman
> “This is plain and simple: Economic espionage did in Nortel,” Shields says.
> “And all you have to do is look at what entity in the world took over No. 1
> and how quickly they did it.”

The definitive book on the collapse of Nortel is _100 Days: The Rush to
Judgement that Killed Nortel_ by James Bagnall, a journalist for the Ottawa
Citizen.

Occam’s razor applies here: the well documented fraud and bankruptcy at
Worldcom and Global Crossing crushed Nortel. Overzealous regulators delivered
the coup de grâce.

~~~
kevin_nisbet
I just finished reading that one (thanks for the recommendation in another
post), and yea, it provides an excellent perspective.

That book lays out to me a much more compelling case that a leap to
conclusions in the early 2000's that some fraud must exist killed nortel.
Based on reading that book it's probably fairer to say the Americans killed
nortel than the Chinese did. Although like anything else, a simplified
explanation when there are lots of contributing factors at play likely doesn't
mean much.

The posted article though about Huawei killing nortel by hacking them appears
to be a reach (can't say it doesn't contribute of course). As I recall working
in the industry around the time Telus and Bell switched to UMTS and towards
LTE, Nortel wasn't even in the running. I think they had already sold off
their LTE technology and were holding onto some CDMA evolution. I don't have
precise memory of how this all lined up though, and didn't really work on the
access network side (which is where Huawei is used, so most of my knowledge
towards Huawei is second hand). I only did an eval with Huawei once.

While I don't have any insight into the china development bank offering low
interest loans, and I didn't see it come up at all in that book, I've worked
with a number of people who used to be contracted out by nortel to build
networks in other countries. And nortel was using it's own money to fund
networks in countries unlikely to repay the money for the equipment (Haiti
probably stands out with the wildest stories). Those were some of the internal
war stories about the financial troubles, although I'm sure there was lots.

I don't think it's safe to say that Huawei hasn't benefited from IP theft,
which may include theft from Nortel, and possibly other factors, that have
allowed them to skyrocket in profitability and sales. The whole thing with
Huawei / Cisco routers I believe is pretty well documented. I just don't agree
with the posted articles premise, that China or Huawei are to blame or fully
responsible for Nortels collapse.

------
KKKKkkkk1
I found this quote illustrative. Reminds you of Silicon Valley actually.

 _Back then, Ottawa, not traditionally (or since) known for its glamour,
seemed full of sports cars, corporate jets, and even society scandals
featuring tech CEOs. In 1999 the co-founder of Corel Corp., who’d gotten his
start at Nortel’s precursor company, threw a gala at which his wife showed up
in a C$1 million leather bodysuit with an anatomically correct gold
breastplate and a 15-carat-diamond nipple. “You were just surrounded by the
most interesting and intelligent people that you could find anywhere in the
world,” says Ken Bradley, who spent 30 years at Nortel, including as a chief
procurement officer. “Nobody would ever tell me I couldn’t do something.”_

~~~
rrdharan
Article about the designer of said gown includes a fun anecdote about the
Chretiens as well: [https://capitalcurrent.ca/richard-robinson-keeps-high-
fashio...](https://capitalcurrent.ca/richard-robinson-keeps-high-fashion-in-
ottawa-alive/)

------
TwoNineFive
Ehh... I'll bite.

I worked at Global Crossing in the late 90s and early 2000s as an engineer. I
was a Primenet employee.

We got Huawei gear in to evaluate. Virtually everything they made was based on
IP theft. Their routers literally had "Cisco Systems" strings all over the
image files. It was blatant.

The PLA were constantly trying to break into our systems. We knew it. We
talked about it. It wasn't a secret.

This is a difficult subject that I don't talk about with other people, in
persona or otherwise. The conversation almost always quickly goes stupid in
one of two ways: The person I'm talking to instantly goes nationalist one way
or the other, or they just don't seem to have the IQ to grasp the issue.
Having a rational conversation about the topic of what the US government and
as private citizens/companies do about blatant Chinese aggression feels
impossible.

As for online, the 50 Cent party quickly shows up en-mass with the typical
FUD, bullying, distracting jokes, pearl clutching, and so on.

------
Ice_cream_suit
Internal fraud not external malice, was the cause of Nortel's demise:

" Investigators ultimately found about $3 billion in revenue had been booked
improperly in 1998, 1999, and 2000.

More than $2 billion was moved into later years, about $750 million was pushed
forward beyond 2003 and about $250 million was wiped away completely.

The accounting scandal hurt both Nortel's reputation and finances, as Nortel
spent an estimated US$400 million on outside auditors and management
consultants to retrain staff.

On April 28, 2004 amidst the accounting scandal, three of Nortel's top
lieutenants—Douglas Beatty, CEO Frank Dunn and Michael Gollogly—were fired for
financial mismanagement.They were later charged with fraud by the RCMP.

The United States Securities and Exchange Commission (SEC) also filed charges
against them and four vice-presidents for civil fraud"

There are many other companies today, that are equally fraudulent.

------
jaakl
Can you kill specific competitor by stealing secretly their technical IP at
all? You would not make them any weaker. You would get yourself stronger, but
that would be general technical advantage, against everyone in the market.
Different story if you take commecial secrets, bidding papers etc but that was
not the case here?

~~~
kevin_nisbet
Using a very contrived and simplified example.

If company A spent a trillion dollars coming up with the manufacturing process
and formula to cure every cancer in the world. The intellectual property at
it's root is the protection of that R&D investment. Company A than get's to
setup manufacturing, and set pricing for the market, at the very least to
recover the billion dollars investment.

If company B comes along, and spends 100 million dollars to steal that magic
formula and the manufacturing process. Company B now has similar costs to
setup manufacturing, but significantly less in R&D costs that need to be
recovered, to sell to the same product to the same customers. In the contrived
example, there is no reason to buy company A's product from their IP, when the
same can be had from company B, presumably for less. Company B than earns a
larger profit, which can be sunk into their own IP for the next generation,
giving them a huge step up.

Of course the real world with tech products is way more messier than this, but
in theory it's possible to do. As I posted elsewhere though, I don't believe
it's fair to say it happened in the case with Nortel.

------
greatgib
I find this article too lenient and fan-boyish with Nortel inner value.

It looks like that the hack is the reason of the complete collapse of the
company. But the article gives the following sentence without even reflecting
on it:

<< Four days before Dunn was fired—fallout from an accounting scandal on his
watch that forced the company to restate its financial results— >>

And, in my opinion, such a hack and the lack of action of Nortel after being
informed of the hack are also symptoms of a defective organization.

This is probably an element of little value, but I knew some people that did
work at Nortel in engineering and this is just my opinion but they were
technically very very bad but they were convinced otherwise. From others I
also got the feedback that the company was the kind of place where most people
fake working.

Just to give you an example: around 2016, one of a former manager at Nortel
that was now a high level executive in another company forced employees to
work in a packed open space despite there being a lot of empty space on the
same floor. Why? Because he knew better than anyone that software engineers
are more productive in an open space... Despite recent studies and the opinion
of the poor employees themselves. At the same time, the moving allowed him to
get an individual closed room for himself...

------
chvid
The telecommunications industry goes from a massive bubble in year 2000 to an
extreme cost focus just one or two years later. Sending tens of thousands of
engineers into unemployment and cutting research and development to the bone.

Talk to anyone who had a job in the sector back then, they will you this.

All those engineers eventualy were reemployed in other industries such as
software and that helped creating the boom that came there. But it also
created an opening for the Chinese electronics industry to move into that area
as they were cheap and willing to invest unlike us in the west.

~~~
TedDoesntTalk
> willing to invest unlike us in the west

The article says Huawei was given $10 billion or more in free or almost free
loans.

~~~
chvid
This is my point exactly.

They were willing to invest where we were no longer willing.

You can say that it is state capitalism and not free competition. But let
there be no doubt; had there been free competition now and not a massive
boycot led by the US government against Huawei, then Huawei would have been
absolutely dominant.

------
canadian_tired
I worked at Nortel before and during the collapse. It was a wild ride...
stories abound. 100K+ employees... and they couldn't hire them fast enough.
Many stories of Nortel hiring who ever they could just so the competition
couldn't get them. The second most memorable day (the first being 9/11) was
when Clarence Chandra did an all-hands webcast... "the perfect storm"
presentation. This was the beginning of the end... we just didn't know how bad
it would get. Massive projects were cut...and the employees with them. You are
talking hundreds of people a week. I recall many of the people I worked
around... packing up and moving home (often someplace in China) immediately.
When people were laid off, they were allowed to hang out...use their
computer...access stuff...before actually having to leave weeks later. I
didn't work on the HW side, but I can tell you the SW repos were barely
protected. The CMS (Livelink?) was pretty wide open... and if you could find
what you wanted (LOL) easy to leave with it. Security was pretty lax... I'd
bet many gigs of files just walked out of there on CDROMS or other media (USB
sticks were not common then). I used to dig through all sorts of tech... cool
stuff...probably a lot that should have been protected. It wasn't. Security
was rarely talked about. All that mattered was the next release date... go go
go.

------
blinding-streak
Nortel Market Cap Peak per year, in $USD Billions:

1997: $16

1998: $22

1999: $105

2000: $283

2001: $56

2002: $26

The dot com bubble produced insane valuations around the turn of the century.
The run-up to the collapse was breathtaking.

~~~
PakG1
Dang, so someone who invested in 1997 would have still made money in 2002,
though they would have a lot of psychological pain from the ride down from the
peak.

~~~
11thEarlOfMar
Lol, that's me and AMZN. Bought at (split adjusted) $1.50 in 1997, rode it up
to $86 in 1999, held all the way down to $6. Finally sold at about $20, still
thinking I was brilliant.

I have to laugh about it cuz I can't bear the alternative.

~~~
Ghjklov
It's alright, no matter how bad that feels, it will never be as bad as all of
us who missed the BTC boat when it was a little baby a few years ago. People
spending it frivolously and treating it like it was worthless toy money since
it was pretty easy to get. Then look at it now...

~~~
jrockway
I have a friend who got into Bitcoin early. He had almost $300,000 when MtGox
got hacked and he lost everything.

So it wasn't all sunshine and roses.

------
afwaller
The hacks were not the problem. They engaged in financial shenanigans because
they had a bankrupt management culture.

Their decline and fall were the direct result of their human problems. And,
briefly, their human problems stemmed from their human problems.

Culture and management matter.

~~~
artsyca
I've worked in a similar communications behemoth that was very closely related
to the company in question. I have first hand experience with toxic, entitled,
self-dealing management culture, poor-me devs, steady stream of clueless
interns, oblivious contractors.. Vapid VP's, diddling directors, the works!
Definitely suspected there were spies of all colors amongst us, but hey! the
coffee was great.

------
alynn
Have any other sources corroborated this story? Bloomberg News lost a ton of
credibility with me after their “The Big Hack” cover story [1], claiming Apple
and Amazon had been hacked by chips secretly added to their servers in the
factory. The picture of the chip on the cover was purely a work of
imagination. To my knowledge, no supporting evidence was ever produced, nor
were any of the widespread criticisms of the story ever addressed [2], [3].

To push another “China secretly hacked the west” story while also invoking
Betteridge's Law leaves me highly skeptical.

[1]: [https://www.bloomberg.com/news/features/2018-10-04/the-
big-h...](https://www.bloomberg.com/news/features/2018-10-04/the-big-hack-how-
china-used-a-tiny-chip-to-infiltrate-america-s-top-companies) [2]:
[https://en.wikipedia.org/wiki/Bloomberg_Businessweek#%22The_...](https://en.wikipedia.org/wiki/Bloomberg_Businessweek#%22The_Big_Hack%22)
[3]:
[https://www.washingtonpost.com/opinions/2019/09/17/bloomberg...](https://www.washingtonpost.com/opinions/2019/09/17/bloomberg-
reporter-challenged-big-hack-story-gets-promoted/)

~~~
smabie
There are direct on the record quotes from different people with knowledge
about it in this article. You could pretty easily interview or email them and
find out.

~~~
throwaway423342
who exactly?

------
throwaway423342
> ...have a strong suspicion it was the Chinese government...

so it MUST be China!

> ...There were close to 800 of them: PowerPoint presentations from customer
> meetings, an analysis of a recent sales loss, design details for an American
> communications network. Others were technical, including source code...

powerpoint and some technical files

> relayed the PowerPoints and other sensitive files to an IP address
> registered to Shanghai Faxian Corp

powerpoint and some sensitive files again.

It's hard to believe Nortel had any 'edge' in 5G, and judging from other
comments of first hand experiences here Nortel's failure has more to do with
itself than anything else.

pathetic medium quality opinion piece

------
throwaway423342
Remember this from bloomberg?

[https://www.bloomberg.com/news/features/2018-10-04/the-
big-h...](https://www.bloomberg.com/news/features/2018-10-04/the-big-hack-how-
china-used-a-tiny-chip-to-infiltrate-america-s-top-companies)

------
rq1
> In 1999 the co-founder of Corel Corp., who’d gotten his start at Nortel’s
> precursor company, threw a gala at which his wife showed up in a C$1 million
> leather bodysuit with an anatomically correct gold breastplate and a
> 15-carat-diamond nipple. “You were just surrounded by the most interesting
> and intelligent people that you could find anywhere in the world,” says Ken
> Bradley, who spent 30 years at Nortel, including as a chief procurement
> officer. “Nobody would ever tell me I couldn’t do something.”

Of course, that was the Russian agent disguised as a Chinese who did it.

I’m not saying that they had nothing to do with it (I don’t know), but it
sounds a bit like hubris to me.

------
seemslegit
Was the super-micro story linked bottom of the article substantiated in any
way in the two years that passed since Bloomberg published it ?

------
executive
DND wouldn't move into the old Nortel campus because of security risks:
[https://www.ctvnews.ca/canada/dnd-may-abandon-1b-move-to-
for...](https://www.ctvnews.ca/canada/dnd-may-abandon-1b-move-to-former-
nortel-site-because-of-surveillance-bugs-1.1477766)

------
oxfordmale
The breach was just a symptom, not the root cause of Nortel's demise. A
company that doesn't act on a major breach of its own IP, has structural
management issues.

------
mhkhung
It's capitalism that killed it. Stock price was sky high because of the
optical-fiber hype. Management has to kill those traditional businesses
(switches, etc) that doesn't have that high growth rate that justifies the
stock price. Then optical hype was busted..

Also, who was supporting telecom in the old days? Bell Labs, AT&T, Lucent,
etc? The government of course. Privatization happened and trade agreements
with Europe meant the US and Canadian government can no longer support telcos
and thus the downfall of all these companies at the time.. Even European ones
like Alcatel, Nokia, Ericsson, Siemens. This allowed the Asian telcos, not
only the Chinese ones, but Korean ones like Samsung to take over.. (Of course
the Chinese government and Korean governments were and are still heavily
involved in them).

------
ycombonator
West is littered with graveyards of companies hollowed out by Chinese
Industrial Espionage. ASMC comes to mind.

[https://www.straitstimes.com/world/united-states/chinese-
win...](https://www.straitstimes.com/world/united-states/chinese-wind-turbine-
maker-found-guilty-of-stealing-us-trade-secrets)

~~~
TedDoesntTalk
And the fines imposed, if they ever get collected, are irrelevant... the
damage is done. In the case of the IBM's Xu who got 5 years prison time, so
what? He's a fall guy. The damage is done.

------
sandworm101
Research In Motion > Nortel.

Nortel built bad routers. RIM created blackberries, the smartphones before
smartphones were a thing.

~~~
blinding-streak
Not going to argue your point about products, but from a financial standpoint,
RIMM/Blackberry's peak market cap was about $81 billion in 2008.

Nortel's peak was $283 billion in 2000. Nortel was huge. Of course, the market
was in a huge bubble at the time.

~~~
sandworm101
Market cap is a measurement of how other people, stockholders, think of your
company. It means little on the ground. A stock can double, or half,
overnight. That doesn't mean the company is suddenly double or half its former
size.

~~~
smabie
Sure, but what's a better metric of the size of a company? Employees?

~~~
hylaride
Gross revenue and/or profit.

------
scythe
More information here:

[https://www.theglobeandmail.com/technology/tech-
news/nortel-...](https://www.theglobeandmail.com/technology/tech-news/nortel-
turned-to-rcmp-about-cyber-hacking-in-2004-ex-employee-says/article534295/)

------
leptoniscool
The answer seems to be "no", lol
[https://en.m.wikipedia.org/wiki/Betteridge%27s_law_of_headli...](https://en.m.wikipedia.org/wiki/Betteridge%27s_law_of_headlines)

------
neonate
[https://archive.is/UUXDc](https://archive.is/UUXDc)

------
phire
Julian Assange originally became famous after getting caught hacking Nortel
back in the early 90s.

I guess Nortel didn't learn from that lesson and secure their network.

~~~
TedDoesntTalk
Do you have a source for this? Curious to read about it.

~~~
phire
Julian Assange helped research a great book called "Underground: Tales of
Hacking, Madness and Obsession on the Electronic Frontier"

Documents the antics (and downfalls) of various hackers from the late 80s and
early 90s, most of them Australian. Assange (aka Mendax) is one of the hackers
the book follows.

It's out of print these days, but the author, Suelette Dreyfus made the book
available online back in 2001 - [http://underground-
book.net/](http://underground-book.net/)

------
dirtyid
This is the decade old Brian Shields, ex-Nortel security adviser, story that
got resuscitated against Huawei for the 5G war. No one took it seriously at
the time because it doesn't comport with reality.

Nortel primarily died from poorly conceived massive spending that fucked them
during the dotcom/telecom bubble crash, executives started cooking the books,
it was discovered, the company imploded. Don't get me wrong, Nortel was
definitely the victim of industrial espionage, every telecom vendor in the
world was being infiltrated by China at the time, CISCO, Siemens, Nokia,
SonyEriccson, Acatel&Lucent etc. But they managed to survive or consolidate
after the crash. Companies like Nortel don't implode that hard and fast from
espionage - massive corporate incompetence and malfeasance however, will.

BTW Huawei itself didn't hack Nortel, the original reporting blamed Chinese
state actors who then passed what they found onto other domestic players like
Huawei and ZTE which was actually CPC's original domestic champion before US
sanctions crippled them, after which Huawei took the crown. This point is
salient, Huawei literally out competed the favourite child. Regardless, if
memory serve the tech Huawei used from Nortel was related to optical routing
which was a niche segment that wasn't a large part of Nortel's portfolio. So
even if Huawei, who was a small player at the time, stole Nortel's tech and
took the relevant market shares, it would not have killed or even crippled
Nortel. There are entire books and lectures dissecting Nortel's demise, the
role of Huawei is never seen as anything but tangential, and playing it up is
basically revisionist history / propaganda.

Somewhat related, expat anecdotes of Nortel China in the late 90s - it was a
shit place to work. Nortel Guangzhou drove away many of their talent (at least
in engineering) because they wouldn't promote PRC nationals, and even Chinese
Canadians. A lot of them ended up being poached by rivals or moved over to
state enterprises, some with usb sticks full of data because Nortel fucked
them. I knew a bunch of engineers with jumped shit with hard drives to Siemens
and Lucent who later ended up at ZTE.

Edit: Also for anyone wondering why Bloomberg's reporting on China has shifted
in the last few years even before the trade war (prior Bloomberg was a pretty
ardent globalist, i.e. pro Chinese engagement like most of big business), this
article from 4 years ago speculating Bloomberg was too pro-China and needed to
cultivate anti-China bonafides if he wanted to run as president. Prescient.

Michael Bloomberg Has An Achilles Heel And It Is Not Guns Or Age But China
[https://www.forbes.com/sites/eamonnfingleton/2016/01/24/mich...](https://www.forbes.com/sites/eamonnfingleton/2016/01/24/michael-
bloomberg-has-an-achilles-heel-and-it-is-not-guns-or-age-but-
china/#659df5386544)

~~~
chvid
Michael Bloomberg is not running for president any more ... but yeah ... he
definitely had a China "problem" and he might still be interested in a
political position.

------
valuearb
While this article seems compelling, it’s also from Bloomberg Tech. A year and
a half ago Bloomberg Tech wrote “the Big Hack”, which seems to have been made
up out of whole cloth by a small group of sources that duped Bloomberg. Not
only was Bloomberg duped, but they’ve never printed a correction, retraction,
or clarification.

I’d much prefer this story was written by a news organization with some
credibility.

------
thatiscool
It is all china's fault, even the dotcom bubble. A sour loser always deflects
his/her own fault.

------
moonchild
> In 2005 the China Development Bank lent the Nigerian government $200 million
> to buy Huawei equipment for a national wireless network, offering an
> absurdly low interest rate, as little as 1%

Why collect an interest rate at all, if it's less than the inflation rate?
It's basically free money at that point.

------
api
There's a lot here beyond just the hacking. Huawei was able to grow so
insanely fast because they had access to a blank check and endless credit from
the Chinese government. Nortel and others meanwhile had to finance things
themselves.

Private companies cannot compete with governments. Governments, especially
those with sovereign currencies, can do things that private companies simply
cannot do and have pockets far deeper than any private company can ever hope
to have. That's why China has won the global game. Everyone else is fielding
their star players, sure, but China's star players are all on 'roids in the
form of endless government backed credit and many other forms of state
backing.

To see an American example, look at American dominance of aerospace. America
has stealth fighters, probably a ton of secret stuff responsible for a good
number of UFO reports, and rockets that land themselves because the US
government backs promising aerospace companies generously. This has been the
case since WWII. Lockheed Skunk Works is almost 100% government funded. SpaceX
isn't entirely government funded but they've certainly benefited from NASA
funding, NASA R&D handholding, and in the beginning got a transfer of IP
related to NASA's previous research into low-cost rocket engines. Without all
NASA's help I doubt they'd be where they are now.

China is doing this everywhere with everything.

~~~
valuearb
Kelley Johnson’s Skunk Works was successful because it rejected government
controls and oversight. Read Kelley’s 14 rules of Management.

Johnson had a 15th rule that he passed on by word of mouth. According to the
book "Skunk Works" the 15th rule is: "Starve before doing business with the
damned Navy.“ because the Navy wouldn’t relinquish control of projects to the
Skunkworks.

And it’s “funding” was paid contracts for performance, not an infinite credit
line of free cash that Huawei got. Entirely different things. Huawei has
sucked up a huge amount of Chinese resources, and there is no guarantee
they’ve made a positive return, or ever will.

And SpaceX is a great example, just like the Skunkworks it’s NASA funding was
pay for performance. SpaceX would have been out if business without the first
contract, and would not be remotely as big today without the others, but those
contracts have also saved NASA billions of dollars.

The vast majority of government funded projects are similar to the SLS, which
has eaten up $15B+ in taxpayer funds without a launch. And when it finally
launches 4+ years late it will be the most expensive launch system ever by a
factor of over 2x per launch, and at least 20 times more expensive per pound
than commercial launch systems. While reusing 40 year old engines!

~~~
jariel
You're crossing streams here.

Government backed financing for equipment sales, and government procurement
for defence or large projects ... these are activities are miles apart in
terms of operational realities.

The Chinese government is involved to this day in financing Huawei customers.
This is a big 'no no' for supposedly 'free trade' because it's a huge
strategic advantage for any competitor wishing to completely dominate a market
and flush out competitors.

The CCP controls their national commercial banks and controls the central bank
- they can direct financing to happen directly for what they perceive to the
benefit of the state and make no mistake this is a lot of firepower.

Imagine if the head of he Federal Reserve, and the head of Morgan Stanley were
directed to make strategic loans to Cisco's customers at he behest of the
President.

Cash-strapped Western companies, getting really sweet financing and credit
terms and 'one stop one shop vendor' from Huawei is enough to really spook
everyone.

Neither is it really a 'side show' issue - it's quite a fundamental thing. The
financing is as important part of the equation as the product itself. Much
like the financial terms on your car loan or mortgage are fundamental aspects
of your terms of ownership.

~~~
g8oz
>> The Chinese government is involved to this day in financing Huawei
customers. This is a big 'no no' for supposedly 'free trade'

I don't know, export finance is a tool used by many countries, the U.S
included.

~~~
jariel
Yes. This kind of what the World Bank is.

However, it's not the same thing.

Imagine if Trump Directed the Fed to print money to give to Chase Bank, to
lend money to TMobile Germany to buy gear from Cisco. This would be
incomprehensible to us.

So it's all a game, we need to play accordingly.

