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At the heart of ASUS's new corporate structure hides a little secret

Six months ago, ASUS quietly announced it would split the company into three separate entities.

An ASUS employee, speaking on conditions of anonymity, thinks change is for the better.  "I think the motherboard market has reached its ceiling," he states.

ASUS management certainly feels the same. Effective immediately, the corporation is now three entities.  Pegatron is the name of the new component manufacturing company.  All motherboards and PC-related products are now part of this company.  Unihan, a second company, will handle all chassis and sub-component manufacturing.  ASUS proper, a third company, will focus entirely on notebooks and systems. 

If the move sounds similar to the failed Gigabyte United merger between ASUS and Gigabyte, don't be alarmed.  It is.  Once again, ASUS proper can divest its OEM business in order to focus on the ASUS brand.  The company feels it can have it both ways: leveraging the ASUS brand at the OEM level while keeping its retail and OEM businesses separate.

So if Pegatron and Unihan still use the ASUS name, what changed at ASUS?  Under the new corporate entity, ASUS employees were paid out all pension plans regardless of maturity as of January 1, 2008.  All employees at the three new companies must start their tenure from scratch.

This may certainly seem archaic, if not illegal in the U.S., though the majority of Taiwanese companies offer no pension plans.  As of March 2007, Taiwanese companies and citizens are allowed to let the government invest pension funds in a state-run super-fund.

The ASUS employee closes on a note of optimism.  "I think you will see more ASUS notebooks in the U.S. from now on."

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Well at least
By FITCamaro on 1/3/2008 1:26:57 PM , Rating: 2
They paid out the pensions people already had. Instead of just saying "Sorry, we're resetting your pension. You get nothing."

But its definitely an underhanded move on the part of Asus. I'm sure there's plenty of guys who've been there for years.




RE: Well at least
By theapparition on 1/3/2008 2:22:55 PM , Rating: 3
I've been there twice before. You needed 5years to be vested in the pension. The first time, the company was purchased and the pension disolved. At the time, I had 4yrs and 10mos service. :(
Second time, I had 4yrs and 3mos service.

So glad I'm my own boss now.......at least until I get home.


RE: Well at least
By rudy on 1/3/2008 3:51:02 PM , Rating: 2
Yeah most foreign companies learned a lesson from the mistakes of US companies who are struggling to to make ends meet with their heavy legacy costs. We see more and more companies continually reset or get rid of their oldest employees to make gains. Those that do not fall behind and cannot compete with the asian companies. This move to split the company is another way for one sector to be killed off without an effect on the others. Much in the way most companies split off their CRT production to a separate company then killed it off.


RE: Well at least
By Ringold on 1/3/2008 4:47:01 PM , Rating: 5
The moral of the entire story, of course, is personal responsibility for ones own retirement is critical. That means paying close attention to and taking advantage of 401k/403b/Roth 401's/Roth and standard IRA's, etc, to the full extent one can afford to. Social Security offers a worse "yield" than does treasury bonds (risk free government bonds available for purchase cost-free), much less a low-fee S&P 500 index fund. For employees that have the option of getting vested in defined contribution or defined benefit plans, going with defined benefit is a huge bet that the company will survive in the market for possibly half a century or more, and counting on Social Security is a bet that the government will be there and in your favor; that's always a risk. They could push the age back, move it up, change the terms radically on who will get it at all; who knows? At any rate, the rate of return is around -1 to 2% for Social Security for most folk; versus a +10% annual compounded return for the S&P 500. My bank account yields more then SS, and is FDIC insured.

Taking as much control of the process as possible minimizes both of those. Of course, it's also less convenient then going and spending 100% or more of each paycheck on frivolous consumer goods and watching CSI Miami instead of CNBC. Hence the average Western citizen's predicament, and the grip the government and corporations have on our retirements.


RE: Well at least
By FITCamaro on 1/4/2008 8:36:11 AM , Rating: 2
Yeah. There's a lot of people here at work who are older and were basically banking on the pensions of 20 years ago still being around.

I started my 401K right out of college. I'm not planning on ever getting a social security check since 40 years from now when I'm old enough to retire, its doubtful it'll be around.


RE: Well at least
By thornburg on 1/4/2008 8:37:52 AM , Rating: 2
The S&P does NOT gain 10% compounded annually.

Its peak gains may be near or slightly above that, but, for example, in 2007, the S&P gained a whopping 3.5%

The NASDAQ did much better, but it also has much larger losses when there are losses.

That said, I agree that running your own retirement is a better plan than counting on Social Security or other similar gov't plans. However, you shouldn't just blindly (or nearly blindly) invest your money. Nearly all retirement accounts come with free advice from a certified financial planner, and your needs vary with your age & income level.

I highly recommend signing up with a major company (or a small one if you know it has a good reputation), and taking full advantage of that free advice.

Even if you have to pay for the advice, it will be well worth it when you retire--whether that is in 10 year or 30.


RE: Well at least
By elessar1 on 1/4/2008 10:48:52 AM , Rating: 2
Here in Chile we all area obligated by law to make a 11% saving, monthly, form our salaries to a private pension account, wich is personalized.

you elect the investment bank in wich you put your savings, there is 6 of them authorized to do this job, and is your obligation to elect the bank and the type of fund in wich you want to put your money on.

The average real annual rentability of the funds it's been like 10% since it's creation in the 80's

here a link: http://www.safp.cl/573/propertyvalue-1821.html


But why the names?
By HaZaRd2K6 on 1/3/2008 1:33:22 PM , Rating: 2
I still think the names sound like the names of failed Transformers. Pegatron and Unihan. What were they thinking?

On a more serious note, I think splitting the company into three completely separate entities was probably a bad idea. Keeping the three companies separate but under the influence of a parent company would probably have made more sense (at least in my mind) and would've enabled them to at least continue using the ASUS brand name (which, you've gotta admit, is very well-recognised by their target market).

ASUS notebooks are kicking ass right now, in my opinion. The Eee PC and G-series are especially hot sellers. The G-series gives you a gaming laptop with either a 15.4" or 17" screen that's actually affordable (roughly $1800-$2300 Canadian) while the Eee PC is a cheapie laptop that'll let people who've never owned a computer before get in on the action. It's also good for someone you wouldn't trust with a multi-thousand dollar system (read: children).

What really worries me about this is what do all those employees do now that they've had their pensions paid out early?




RE: But why the names?
By JackBeQuick on 1/3/2008 1:36:22 PM , Rating: 2
They're supposed to invest it into the Taiwan fund. I wouldn't though.


RE: But why the names?
By Polynikes on 1/3/2008 1:58:58 PM , Rating: 2
Heck no, I'd invest it elsewhere.

I agree with my "grandparent," the ASUS brand is well recognized and respected in the mobo market, why take that away?


RE: But why the names?
By KristopherKubicki (blog) on 1/3/2008 2:07:00 PM , Rating: 2
Pegatron will still use the ASUS brand.


RE: But why the names?
By ChiefNuts on 1/3/2008 3:31:52 PM , Rating: 2
So are they subsidaries under a Parent or holding company, or completely separate from eachother, but licensing the ASUS name from someone, like PALM was doing a little while ago??


Why so so much concern for a Taiwanese company?
By Pauli on 1/3/2008 5:02:06 PM , Rating: 2
Why is the writer so shocked about a Taiwanese company cutting their pension plan for employees? They're just following the cue from American companies, which have been cutting pension plans at a furious pace the past decade (including my own, unfortunately). As far as I know, there are very, very few Fortune 500 companies that are offering pension plans to their employees anymore. Yes, they have grandfathered many long time employees into the old plans, but newer employees must rely on 401k plans and the like for retirement. It's unfortunate, but those boom-time American worker perks are dwindling because of global competition. Just a fact of life now.




By FITCamaro on 1/4/2008 8:38:19 AM , Rating: 2
My company still offers pensions. But you have to be here for a very long time to get one of any merit.


By joseph1110 on 1/5/2008 9:46:16 AM , Rating: 2
American companies, in destroying employee benefits, sending
jobs overseas, cutting wages, cutting jobs, cutting research, et caetera, are ultimately destroying themselves in the long term, I believe.
The short term winners in this cruel, corporate war against the worker ranks are the executives, who rake in obscene
salaries, will enjoy expanded pension plans paying them million$ / year for life, free use of the corporate jet fleet for 20 years after retirement, all that in return for even lousy performance on their wicked watche$ of their bottom lines, I believe!
In summary, for a well-known Taiwanese company to follow the
current American model, shows that they - also - bear little responsibility for their worker ranks, and we are all doomed to decline by this wicked means of pecuniary mi$tribution, I
further believe!
Scientia est Potentia!


Bad Name
By Relion on 1/3/2008 2:22:45 PM , Rating: 3
It should have been named Omtipus Mripe !




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