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Could Dell Be Next to Leave China?

by - source: Tom's Hardware US

There's been a lot of discussion about Google's decision to walk out of China and it seems as though other companies could be considering similar moves.

Today a story about the whole Google-China situation appeared on the front of the Hindustan Times (via Engadget). Though the article focused mostly on Google's business in China, a brief mention of another large company following suit has people talking.

The Hindustan Times cites Indian Prime Minister Manmohan Singh as saying Dell is considering moving business from China to somewhere else.

"This morning I met the chairman of Dell Corporation," the Prime Minister said. "He informed me that they are buying equipment and parts worth $25 billion from China. They would like to shift to safer environment with climate conducive to enterprise with security of legal system."

However, there are some companies that are siding with China. The Associated Press reports that TOM Online, a mobile Internet company that operates tom.com, is severing ties with Google because of everything that has happened. The Internet firm said yesterday it was stopping use of Google's search services after "the expiry of agreement."

"TOM reiterated that as a Chinese company, we adhere to rules and regulations in China where we operate our businesses," the company's parent, Hong Kong-based TOM Group, said in a statement Tuesday.

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kelemvor4 03/24/2010 4:19 PM
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Wouldn't it be great if you could buy PC's manufactured in the US again? More likely, Dell would go to Japan or Taiwan or the Philippines though, rather than doing the right thing.

Abrahm 03/24/2010 4:30 PM
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kelemvor4 :
Wouldn't it be great if you could buy PC's manufactured in the US again? More likely, Dell would go to Japan or Taiwan or the Philippines though, rather than doing the right thing.


They're considering moving to India.

hennnry 03/24/2010 4:35 PM
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It would be great to buy computers made in usa again... except that now, what costs 800 will cost 2000. I know I don't have that kind of money, do you?

brendano257 03/24/2010 4:39 PM
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It's sad to see any company or person siding with China at the moment. I'm behind Google almost 100%, they backed out of an awful environment, most likely loosing money at the time as well. Someone needs to put China in check for their human rights violations and entire regime-like mindset.

HavoCnMe 03/24/2010 4:39 PM
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No, bring them home like kelemvor4 said. We NEED the JOBS.

tayb 03/24/2010 4:40 PM
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kelemvor4 :
Wouldn't it be great if you could buy PC's manufactured in the US again? More likely, Dell would go to Japan or Taiwan or the Philippines though, rather than doing the right thing.



Maybe if people in the USA didn't think they were worth so much more than they are Dell could bring their manufacturing facilities back here and operate them. Too bad that's a pipe dream because workers here would expect to be paid $15+ an hour doing unskilled work in a factory and then they would unionize and drive up costs even further by demanding outrageous benefits for doing their unskilled labor. If Dell leaves they will be heading to India.

I would rather have inexpensive Dell products than ones that had "Made in the USA" stitched on the back in tiny letters.

xeensd 03/24/2010 4:42 PM
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Dell could not afford to bring those jobs back to the US.

tommysch 03/24/2010 4:45 PM
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We should lower our living standards and run the developing world to bankruptcy.

Screw them, I want my imperialism back ASAP.

trueno07 03/24/2010 4:45 PM
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Bring them jobs back to 'merica!!

Sadly, xeensd is right...

AndrewCutter 03/24/2010 4:47 PM
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i think it has to do with cost of living since us is a developed country. Ppl need more income to live. Whereas here in india, the cost of living is comparitvly less. The places were factories are setup, it is even less than the cities. So the employees will be happy with less than what is needed in us. As far as unions are considered we have them here also. In fact i think it is there everywhere. Just like we have human rights, workers too need to be protected from exploitation. so legally i tihnk we need a union. the problem is in real world terms either the company has a huge hold that unions becomes voiceless leading to sweat shops or unions become too strong leading to stagnation.... like everything a healthy comprimise between the too is required.

Anonymous 03/24/2010 4:51 PM
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Dell doesn't want to be socialized like GM, that's the reason why...

rhino13 03/24/2010 4:53 PM
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Woah, tom.com severed ties with Google O.O

Thats like getting a finger cut off... or maybe just a hangnail. Probably the latter.

keither5150 03/24/2010 4:58 PM
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What good would bringing $2/hour jobs back to America? China and third world country manufacturers have made us conditioned to low prices. The jobs that have left North America and are not coming back.

eyemaster 03/24/2010 4:59 PM
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They Tuk Our' Jbs!!! (South park style, for those who know) :D

icemunk 03/24/2010 5:02 PM
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Protectionism begins. Wars usually follow

aford10 03/24/2010 5:03 PM
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They could afford to produce them here in the USA again, if the factory workers didn't demand $20 an hour. The ever demand for higher and higher wages is part of what is driving businesses to other countries.

A word of wisdom to those unemployed: If a company like Dell did come back to the US(though unlikely) to produce computers, accept a reasonable wage. All it does is drive up the cost of products, and drive the company to another country.

scook9 03/24/2010 5:03 PM
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I would work for Dell USA if they came back here. Surely they need elelctrical engineers right?

frozenlead 03/24/2010 5:05 PM
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keither5150 :
What good would bringing $2/hour jobs back to America? China and third world country manufacturers have made us conditioned to low prices. The jobs that have left North America and are not coming back.



They will, eventually. The other countries that don't have the expensive benefit programs the US does will eventually get them as their standard of living increases - then the US, which will have already reformed it's policies in the future (I hope, at least) will be a more viable economic option for manufacturing.

Anonymous 03/24/2010 5:07 PM
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the 'made in' phrase is not what it used to be, in reality it should read 'assembled in' in this day and age of outsourcing to be competitive many companies rarely ever make their own goods, they assemble them, dell do not make chips or motherboards, heck i be even surprised if they make their own computer cases, they outsource the stuff and then plonk their badges on them, having dell come back to the US wont really create as much jobs as it sounds

goingoffroading 03/24/2010 5:09 PM
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xeensd 03/24/2010 5:10 PM
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frozenlead :
They will, eventually. The other countries that don't have the expensive benefit programs the US does will eventually get them as their standard of living increases - then the US, which will have already reformed it's policies in the future (I hope, at least) will be a more viable economic option for manufacturing.



Do you know of an advanced country that has done this in history. The only one I can think of is that almost has done this is Germany. Most other European countries are have limited manufacturing...

climber 03/24/2010 5:10 PM
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I guess when the company finally moves to India it'll be called newDelli. Just imagine the "Dude your getting a Dell!", with a thick Indian Accent. Pretty soon the Intel tune will be done by a group of men with thick Indian accents.The whole world will be run by India and China in the coming decades.

aford10 03/24/2010 5:19 PM
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climber wrote :

I guess when the company finally moves to India it'll be called newDelli. Just imagine the "Dude your getting a Dell!", with a thick Indian Accent. Pretty soon the Intel tune will be done by a group of men with thick Indian accents.The whole world will be run by India and China in the coming decades.




You ever called any support lines? You don't have to imagine the thick Indian accent.

OvrClkr 03/24/2010 5:21 PM
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If dell and a few other big corporations move out of China it will be a loss for them. I guess what goes around comes around..

tsnorquist 03/24/2010 5:21 PM
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"Master Obi-Wan, not victory. The shroud of the dark side has fallen. Begun, the International Corporate War has!"

Acert93 03/24/2010 5:25 PM
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tayb :
Maybe if people in the USA didn't think they were worth so much more than they are Dell could bring their manufacturing facilities back here and operate them. Too bad that's a pipe dream because workers here would expect to be paid $15+ an hour doing unskilled work in a factory and then they would unionize and drive up costs even further by demanding outrageous benefits for doing their unskilled labor. If Dell leaves they will be heading to India.I would rather have inexpensive Dell products than ones that had "Made in the USA" stitched on the back in tiny letters.


OK, you want as cheap of products as possible, but your rant against American workers overlooks a basic premise to the equation: cost of living. American workers do demand more in wages due to inflated cost of living. Even basics (housing, transportation, health care, food, utilities) are very expensive in many Areas of the US.

It doesn't really matter if the labor is unskilled, the bottom line is the workers need to earn a competitive wage per the cost of living (not what someone in China can do the work). So while you rant on unskilled workers/wages your focus on pure consumerism is also telling. This dynamic has caused such massive economic changes in the US--exporting of jobs, increased imports, government intervention into health care, and the immigration issue (where we "import" cheap labor to people willing to live below poverty levels because they are above the living standards in other countries, all so "natives" can get their $0.99 items at Wally World.)

thegreathuntingdolphin 03/24/2010 5:27 PM
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Dell will never come back to the US. Geez people study some economics.

We would NOT want Dell to come back unless you wanted Dell to fail as a company. Their PCs would cost more than Macs. No one would buy from them.

It is not bad that Dell moved out of the US. I hope y'all realize that more countries outsource to the US than we outsource out...If every country did not outsource we would have LESS jobs. It's all about comparative advantage. If the US was only good at manufacturing, our standard of living would plummet since even third world countries can do that well. The US is much more technical and service orientated. That's how we stay on top. Do y'all think the US would stay on top by having its workers make jeans, PCs, and textiles?

christop 03/24/2010 5:28 PM
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Why pay Americans 10 to 15 an hour when you can get other people to do it for 3 dollars an hour.. Maximize greed I mean profit..

Acert93 03/24/2010 5:33 PM
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aford10 :
They could afford to produce them here in the USA again, if the factory workers didn't demand $20 an hour. The ever demand for higher and higher wages is part of what is driving businesses to other countries. A word of wisdom to those unemployed: If a company like Dell did come back to the US(though unlikely) to produce computers, accept a reasonable wage. All it does is drive up the cost of products, and drive the company to another country.



First off, coming from the Midwest where manufacturing rules, outside directly working for an tier 1 automotive company there are few factory jobs you can get today that pay above $15/hr, let alone $20. May cap at about $10 (and many of these are automotive suppliers). There are exceptions but you will find more jobs starting below $10 and capping below $15 in the rust belt than the hypothetical $20 you are dreaming about.

As for accepting a reasonable wage, the reverse is: why not accept a reasonable cost on goods? At the end of the day someone has to be the cashier at the grocery store, flip your burgets at McDonalds, and operate the gas station. These same people need to live in the areas they work. Even if they all got better education and work skills SOMEONE needs to do these jobs. I am not saying pay more for products solves the problem, but blaming American workers for wantint competitive wages in regards to the cost of living in their neighborhoods isn't quite on target.

As for Dell, I have seen first hand how Dell wins support contracts. $12 is what they pay when they win a contract and aim to collect disposed IT staff. And they mainly aim to snag these people for companies that REFUSE to accept Dells much cheaper off seas support staff.

cscott_it 03/24/2010 5:39 PM
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An update to this, Dell doesn't haven't any plans of moving production from China to India, they believe India has the same potential for being a hardware hub as China does.

[There is] a misunderstanding of what Mr. Dell and the Prime Minister discussed. In fact, Mr.Dell met with Prime Minister Singh to discuss ways of building India's hardware manufacturing eco-system. In this context, Mr. Dell said that the company spends approximately $25 billion annually on sourcing components from its suppliers in China. With the right kind of progress, Mr. Dell believes that India also has an opportunity of becoming a hardware manufacturing hub, generating employment and adding to the country's impressive growth. Dell HAS NOT made any plans to shift its component spend at this time.

-Via DailyTech

For those of you interested.

Acert93 03/24/2010 5:40 PM
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christop :
Why pay Americans 10 to 15 an hour when you can get other people to do it for 3 dollars an hour.. Maximize greed I mean profit..



From a pure fiscal perspective it makes a lot of sense--you can hardly fault CEOs from moving overseas when they are beholden to stock holders to make as much money as possible.

That said these sort of business practices are short sighted. While it is commonly stated that moving these jobs overseas raises the standards of living in other countries (often true) some of the major reasons these companies move is to avoid labor laws regarding work hours, safety conditions, and the like. Another is environmental regulations. It would be niave to believe that the outsourcing of American industry has resulted in a cleaner world or better living conditions across the board. I think the picture is quite mixed and very little attention has been paid to the consequences of these actions domestically and abroad.

These jobs aren't coming back, but from an American perspective we need to ask what standards are we holding US firms overseas as well as to foreign made products? And what is being done to fill the void for vacated jobs? Does it do general economic health to export jobs and leave a vacuum of unemployed workers? It would be nice if our elected officials spent time working on real issues instead of furthering their own political careers. I don't think there are easy answers to these issues, but the consumer-driven economy will eventually fail. In this regards the recent recession is GOOD. There needs to be market corrections. I know how owners are mad, but their properties were overvalue and the moves to protect banks and home owners only delays the inevitable.


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