The Secret (35 page)

“Why did the company fail? Why is the Sphere obsolete?”

The professor looked out across the harbor, at white gulls soaring on the wind, at fishing boats going and coming, trailed by hopeful birds.

“Two reasons,” he said. “Lack of capital and Tom Malloy’s stubbornness.”

“If we acquire the company,” I said, “our plan is to use its expertise to assemble microprocessors, chiefly using components we’ll import from China.”

“Where you can get them cheap, but—you hope—with acceptable quality.”

“Exactly.”

“And you’ll put the Sphere name on the microprocessors,” he added. “Not a bad idea. The wave of the future. The possibilities are endless. You get up in the morning in a bedroom at seventy-two degrees, bathe, dress, and go downstairs. The microprocessor senses that you have left the room and lets the temperature in the bedroom drift down to sixty. You go down to a kitchen where overnight the temperature has been as low as fifty, but when you walk in it is seventy-two. That’s based on time, not that you’ve come into the room. You glance at the refrigerator door and see a printed inventory of what’s inside. You decide to have eggs, and when you take the two out, the inventory goes down from eight to six. Your cooktop knows how you like your eggs and gives the right amount of heat for the right amount of time. When you are about ready to leave, you press a button that starts your car, to let it warm up. A sensor in the garage detects that an engine is running and opens the garage door to let out exhaust fumes. And so on. And that’s just your house.”

“Tom Malloy wants to build Sphere Four,” I said.

Professor Cable nodded. “First he’ll have to make his peace with Microsoft—which won’t be all that difficult to do; the antitrust division would never allow Microsoft to refuse to license to him. But he’ll have to give up his old dream of a proprietary operating system, no matter how good it might be. The investment in cash may not be formidable for you. But the commitment to marketing may be. You are experts at that. But selling computers will be a very different thing from selling ladies’ undergarments.”

“Have you ever heard of Elizabeth McAllister?” I asked.

“No.”

“Well, you may. She is going to be our vice president, technology operations, and she may be calling on you. If she does, you have never talked to me. She may ask you to agree to a permanent consulting relationship with us, in which case it will really be me asking. Here is my card with my home phone number. If you need to talk with me for any reason, call that number. Also, here is my number in Hong Kong. We may be doing some more business.”

“You want me to second-guess your young woman,” he said. He was no simple academic but was a shrewd and perceptive man. I wished I could have hired him but knew I couldn’t.

“This meeting has been very helpful to me, Professor. What you have told me confirms what my Chinese associate in Guangzhou says and what Liz McAllister says. Unless it’s all just conventional wisdom, I think I’m hearing three knowledgeable people agreeing on basic points.”

Now
I called my father—when I could tell him I had three independent analyses that agreed.

“They sing from the same sheet, hey? Maybe that’s because they’re all members of the same fraternity.”

*   *   *

I flew to Houston, this time leaving Vicky behind. She’d had enough of Houston and quite enough of Tom and Becky Malloy.

Liz did go with me, though, on the Lear. I had decided that her declaration that she loved me was as innocent as most of the things she said that were subject to misinterpretation. She said “I love you” almost—not quite—as casually as I might say “Good morning.” We sipped champagne on the flight and talked business. We could see nothing from the windows but the tops of clouds.

After we had shared a bottle of champagne, her “I love you” took on a slightly different meaning than I had given it. “Anytime, Len,” she whispered. “I don’t expect you to want it … but anytime. No obligation attached.”

“I’ll remember that, Liz. But I won’t be asking you.”

I don’t know what Malloy had in mind; maybe to overwhelm us with Texas hospitality. In any case, we found that he had our schedule worked out for us for our first evening in Houston. First we would take a dip in his pool, then eat some barbecue on his patio, and finally we were going to a rodeo.

“I bet you’ve never seen a rodeo,” he said with enthusiasm so apparently genuine it was hard to believe it was not. “The best one is in Vegas, these days: the National Finals. Used to be Forth Worth. But you’re gonna love this one.”

But first we went swimming. Not having anticipated this at all, neither Liz nor I had brought swimsuits. No matter. The Malloys kept a supply on hand, all sizes.

Wearing a bikini was not good judgment for Liz, but that was all they had for women, not even one of our Cheeks oranges. She came out to the pool in as modest a bikini as they had. It didn’t cover enough—which the Malloys pretended, at least, not to notice. She was a sport, though—a game young woman I had to admire. She swam strongly. And she could dive. Even when she had to pull up the bikini top after a graceful dive knocked it down around her belly, she was not conspicuously daunted.

We hadn’t brought clothes suitable for a rodeo either. But the Malloys entertained people from all over the world and took them to rodeos. As with swimsuits, they had an assortment of clothes for rodeos. For me it was a pair of tight blue jeans, a lemon-yellow shirt with pearl buttons, a cowboy hat, and boots. For poor Liz it was a white satin blouse with a fringed suede vest, a cowboy hat, a pair of Guess jeans, and white lizard Mercedes boots.

The rodeo was a lot more fun than I had expected. We watched men ride bucking broncos, rope calves, and—what was most interesting to me—ride bulls. Among the women performers one of the most interesting was barrel racing, which required proficiency and courage. The performers were well known to the crowd, just as fans know baseball and football players, and they were judged by their skill and endurance.

Rodeo events were not for the faint of heart. Liz was sickened when she saw one bull rider thrown and trampled, suffering a broken arm before the rodeo clowns could distract the bull. The stench of manure bothered her sinuses. She confessed to me later that she found the crowd more interesting than the performers.

When we returned to the Hyatt Regency, she and I sat down for a final drink in the lobby bar.

“You deserve a bonus for tonight, Liz,” I said to her.

“I can’t remember ever being so goddamned humiliated,” she said quietly.

“When in Rome, do as the Romans do,” I said. “You’d have got stares if you had done anything differently.”

When we went upstairs, we hugged and kissed lightly at her door. She smiled, opened with her key, and disappeared inside.

*   *   *

The next morning we sat down with Tom Malloy in his office. I opened the discussion by telling him what exactly Gazelle, Inc. planned for Sphere.

“We’ve been assured by some very capable people that microprocessors are going to become more and more important and that there will be a growing market for them. Sphere, Incorporated is very well situated to take advantage of that opportunity. You have expertise and a name. Sphere could become a major factor in microprocessing.”

“We already make microprocessors,” said Malloy. “What do you think makes the Sphere computer work?”

“I understand. It’s another reason why your company is so well positioned to move in the areas my company is interested in.”

“Components from China,” said Malloy. “Do you want to name your Chinese partner?”

“We have no partnership with anyone in China. If we can move on this deal, our supplier will be Zhang Feng.”

“I might have known,” said Malloy. “Guangdong Micro-Technology—GMT.”

“What do you know of Zhang and his company?”

“He’s a young man who’s made himself very rich very quickly, partly by theft, partly by
guanxi.
”

“What’s
guanxi
?” I asked.

“It’s the grease that makes anything in China run well—that is, anything that does run well. It means ‘pull,’ or influence, often with bribery.”

“I take it you don’t much like him.”

“He tried to sell us components. They didn’t test well.”

“I would expect you to test very thoroughly every single item that comes from Zhang,” I said. “We won’t accept and we won’t pay for anything that doesn’t pass.”

“Am I expected to put GMT components in Sphere Four?”

“We haven’t committed to fund Sphere four.”

“Well, do commit. If you don’t, I’ll leave the company the minute you take over.”

“We won’t commit,” I said, “until you come up with a business plan. We’ll want the design and all the specifications for Sphere Four. We’ll want a complete estimate of what it will cost to develop and build it, based on two assumptions: one, that you use GMT components, and two, that you don’t.”

“How soon do you want this?”

“I have to fly out to Hong Kong for a week or two. I’d like to see it when I come back. In the meantime, you can work with Liz.”

Malloy smiled. “‘Vice President, Technology Operations.’ She’s the only computer scientist you have, isn’t she?”

“I have others on a consulting basis.”

“Obviously it will do me no good to try to convince you what an extraordinary machine Sphere Four will be. Okay, then. I will try to convince Liz.”

“Convince her in writing,” I said. “Convince her with documents I can show to others. And, incidentally … while we’re on the subject, let me see what your plans are to prevent your laser printer from becoming obsolete. Let me have cost figures on that.”

“I see I’m going to have to deal with bean counters,” he said grudgingly.

I nodded. “Three separate people who don’t know each other have described you to me as a genius but also as a stubborn and unrealistic egomaniac. Gazelle is ready, just about, to give you a major new infusion of capital. You had better get used to the idea that you won’t be able to make major policy by the snap of your finger, just because
you
think it’s a good idea. My father ran Gazelle that way when it was a small business. Even he can’t do it that way anymore.”

53

I flew back to Hong Kong, this time alone. Vicky and the kids stayed at home.

Vicky offered to send Maria with me, to take care of things in the apartments, but I said no. Maria was more important with the children. We had been assured that her Chinese was not accented, and she spoke it to little J. J. and Catherine. It was Cantonese, not Mandarin, but we were assured also that for the kids to learn a little Cantonese would help them when they studied Mandarin in earnest.

Anyway, we had contracted with a company to send personnel into the apartments twice a week, to dust and make certain all was in order. When I knew I was going out there, I called them, and they assigned a fulltime maid for the duration of my stay. When I arrived, the refrigerator and bar were stocked, the air conditioners were running, and the
South China Morning Post
lay on my dining table.

I had E-mail waiting: a message from Zhang Feng saying he would fly to Hong Kong at my convenience. I had a fax from Charlie Han, saying Bai Fuyuan would come down from Shenzhen on whatever date we suggested.

I had dinner with Charlie my first night in town. We ate in an excellent—and I mean
excellent
—Italian restaurant called Tutta Luna, which served Italian cuisine that would have met Vicky’s approval. It was within walking distance of the apartments.

“What do you think of the merchandise Bai Fuyuan sent?” I asked Charlie.

“It’s like a letter of recommendation, Len,” he said. “If it wasn’t first-class stuff he wouldn’t have sent it to us. The question will be: Can he keep it up? Or will he? Does he intend to?”

“So what deal does he want?”

“He wants to manufacture Cheeks merchandise in China. He wants to sell much of it in China, but he wants to export much of it to the States, where it will enter the stock of Cheeks stores. He is willing to submit to our most rigorous standards of quality control, to allow our inspectors to look at every item individually.”

“And of course he can manufacture cheap.”

“Yes. Very cheap.”

“And sell for—?”

“American prices. The profit will be immense.”

“Are his Chinese customers going to be so stupid as to believe they are buying something that was manufactured outside China? That stretches credibility a little, doesn’t it?”

“There is a way of making them believe it,” said Charlie. “He sews the goods in Shenzhen, takes them to Guangzhou by truck, and loads the crates on Chinese ships. The crates bear stenciled signs saying the port of origin is Hong Kong or maybe even New York. No one cares about that. The shipping documents sealed to the crates say the port of origin is Guangzhou. In the port of Shanghai the crates are unloaded. The shipping documents, now unsealed, say the crates were put aboard the ship in Guangzhou. That makes the merchandise coastal trade. Legally, it has never been out of China, so it is not subject to tariffs. The inspectors tear off the documents, which are all
they
are interested in, and clear the crates to leave the ship. The merchandise arrives in warehouses here and there, in crates saying it came from Hong Kong or the States, and the labels sewn in the garments say they are Cheeks items, made in the U.S.A. or in Hong Kong.”

“It’s almost exactly what Zhang Feng wants to do,” I said.

Charlie smiled. “They may very well be partners.”

“It’s a little too transparent, it seems to me,” I objected.

“Well, there’s a certain amount of
guanxi
involved.”

“Okay. What about the merchandise he wants to send to the States?” I asked.

“The stuff comes from Shenzhen by truck. British inspectors look at the merchandise—and will until the Handover, after which the inspectors will be Hong Kong Chinese, whom we may expect will be a little more lax. It bears labels saying the articles were made in China and identifying a maker. In warehouses here the labels are changed to ones reading, like, ‘Made in Hong Kong exclusively for Cheeks.’ Coming in, the merchandise is valued as stuff manufactured in China, so it’s quite cheap. Going out, it is Hong Kong merchandise, already worth three times as much. In the States you sell it for your regular prices.”