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Dell to Rid Itself of Factories by 2010

By - Source: Tom's Hardware | B 33 comments

As Dell continues to shift business practices to embrace a changing PC market, it looks to sell its computer factories world wide.

It would appear Dell Inc. is looking to sell its computer factories in preference of outsourcing in an attempt to cut expenses. With many of Dell’s competitors, such as HP and Apple, already outsourcing production of many of their own computers, Dell seems to be simply following in suit. According to sources, Dell could be selling most or all of their computer factories within the next 18 months.

Dell currently does outsource part of its manufacturing process for many of its laptops, with just the final assembly taking place at their own factories, such as those in the United States. Although current means of production for Dell’s desktop PCs is considered efficient, falling yearly profits for Dell has forced it to reevaluate its business model to further cut costs. With manufacturing contractors being able to have greater focus on the production process, having greater specialization, and possibly having the use of an offshore labor force, the use of contractors could result in a cost savings. With rising oil prices, transportation costs are increasing as well, making manufacturing a product at fewer locations potentially cheaper. Some believe though that Dell may sell its factories to the same contractors who will continue to produce PCs for Dell.

Dell’s production strategy has also been affected by the increase in laptop sales over those of desktops in recent years. The past business of building desktop PCs for orders on-demand is being replaced by that of consumers buying a pre-configured laptop from a retail store. A switch in Dell’s business practice may result in increased profits, but Dell’s ability to continue offering customization on the level they are known for may possibly be threatened. Last December, Dell signed up Best Buy as a retail partner for the sale of Dell’s Inspiron and XPS PCs, a historical shift for the company’s business model. Many consumer purchases now are often driven by looks, rather than system specifications, giving the ability to purchase a computer in person an advantage.

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  • 6 Hide
    mikeynavy1976 , September 5, 2008 11:54 PM
    Doesn't look I'll be buying a Dell ever again. The only Americans making any money on this are the very few that don't need it.
  • 3 Hide
    Mr_Man , September 6, 2008 12:52 AM
    mikeynavy1976Doesn't look I'll be buying a Dell ever again. The only Americans making any money on this are the very few that don't need it.

    Hear hear.
  • 3 Hide
    Anonymous , September 6, 2008 1:00 AM
    Totally agree with you Navy man I remember here in Austin with lots of Dell layoffs and the tech bubble burst along with peoples 401k that dumped it all into Dell stock.
  • Display all 33 comments.
  • 4 Hide
    jivdis1x , September 6, 2008 1:38 AM
    The last time I recommend a Dell when they were Made-to-Order. After they made the move to sell them at Bestbuy ie mass production; material quality and design went down the tube. I stopped recommending them but didn't discourage someone from buying but with this news, I would.
  • 3 Hide
    ravenware , September 6, 2008 3:16 AM
    Quote:
    It would appear Dell Inc. is looking to sell its computer factories in preference of outsourcing in an attempt to cut expenses


    F@#$ Dell. More made in China/Mexico garbage.

    Who the hell are we supposed to buy office machines from now?
    This is beyond BS! HP machines are of poor quality and often have proprietary hardware making fru's hard to find or expensive. IBM sold there share over to lenovo, a company I had never even heard of before hand. I have had a handful of lenovo machines that have go down due to hardware failure too. Now Dell is in the same mix.

    You know, maybe it isn't the workers who are over paid and lazy, maybe its the CEO's and industry leaders who are too fat from stuffing cash down their fat-asses and too lazy/stupid to invent more sophisticated methods of producing and shipping products.

    So instead they opt for the old method; finding some poor shmo to do it for less and step over their own workers in the process for another buck to stuff their faces with.

    The rich get richer and the poor get poorer.

    F@#$ Dell, F@#$ them up their stupid asses.
  • -1 Hide
    ravenware , September 6, 2008 3:22 AM
    Quote:
    It would appear Dell Inc. is looking to sell its computer factories in preference of outsourcing in an attempt to cut expenses


    F@#$ Dell. More made in China/Mexico garbage.

    Who the hell are we supposed to buy office machines from now?
    This is beyond BS! HP machines are of poor quality and often have proprietary hardware making fru's hard to find or expensive. IBM sold there share over to lenovo, a company I had never even heard of before hand. I have had a handful of lenovo machines that have go down due to hardware failure too. Now Dell is in the same mix.

    You know, maybe it isn't the workers who are over paid and lazy, maybe its the CEO's and industry leaders who are too fat from stuffing cash down their fat-arses and too lazy/stupid to invent more sophisticated methods of producing and shipping products.

    So instead they opt for the old method; finding some poor shmo to do it for less and step over their own workers in the process for another buck to stuff their faces with.

    The rich get richer and the poor get poorer.

    F@#$ Dell, F@#$ them up their stupid arses.
  • 2 Hide
    V3NOM , September 6, 2008 6:07 AM
    i have never bought a dell and I'm never going to. i could build (and i have researched this thoroughly) a high end - crysis killing - gaming system for around $1300 not including postage thats faster than a $2000 Dell. I mean seriously, is it that hard to build your own computer? Why do people consistently buy these highly overpriced "custom built - yea right complete BS...) desktops? I rest my case.
  • 1 Hide
    EYE , September 6, 2008 6:32 AM
    Sadly not anybody can build their computers or are interested in, how would you build a laptop V3NOM???
  • 0 Hide
    Anonymous , September 6, 2008 7:26 AM
    Many consumer purchases now are often driven by looks, rather than system specifications

    spot on.
  • 2 Hide
    Anonymous , September 6, 2008 8:10 AM
    guys...stop complaining....its a global thing....buy what you like from now on and enjoy before you die....the world is changing....face it
  • 0 Hide
    dwellman , September 6, 2008 1:26 PM
    Like anyone "makes" computers anymore; that is, fabs their own chassis, componets, ect. Modus operandi has always been design here build elswhere.

  • -4 Hide
    Lin , September 6, 2008 1:41 PM
    hahahahahahahahahahahaha, could not stop laughing.
  • -2 Hide
    terror112 , September 6, 2008 2:08 PM
    Dell...
  • -1 Hide
    jaragon13 , September 6, 2008 2:56 PM
    Dell's should cost 30% less than most prebuilts WITH THE SAME PARTS! Atleast!

    They only want more money.
  • 0 Hide
    eklipz330 , September 6, 2008 5:25 PM
    even more of a reason not to buy a dell

    its cool though, never thought of buying one since i got folks here at toms...
  • 5 Hide
    fulle , September 6, 2008 5:35 PM
    This is why we need a government policy to tax foreign outsourcing as soon as possible.

    Sure, its good for Dell to outsource. It cuts costs. But its bad for the community, and builds technology in the overseas places the labor is outsourced to. Which sounds good, but causes competition with our own labor force.... which is bad (for us). Eventually, imitation companies rise adding foreign competition for Dell. Which, is bad for the CEO types too.

    I haven't even got into what outsourcing does to QUALITY.

    If a company wants to act like a multinational, they shouldn't be treated like an American business. Fuck Dell.
  • 0 Hide
    Anonymous , September 6, 2008 5:45 PM
    It's just American to invest in the American economy any more That is why as Americans we are happy to buy disposable items that cost less and are of inferior quality, and now it appears that last of Americans computer manufacturing is also going overseas. You all whine but do nothing about it but here in America we cannot compete with foreign imports when the makers of said imports make in a year what an American will make in a week. And that is the cost of living in America. I run a small American assembling computers and laptops and pay my employees more than the average pay rate I cannot compete with Dell in the low end range of computers even the mid range is a stretch but that I can do just to break even and keep people busy. But the point is I sell only product assembled or manufactured in America but I will likely have to change that within the next 2 years just to keep my doors open. People just keep buying foreign goods from Walmart HP and and others then WHINE that the economy is bad. The economy is bad because you buy this crap form foreign labor forces and put nothing back in the American economy. So start with looking at yourselves then make a plan to invest here instead of overseas. Just think about when you are talking to tech support or account management and have to talk with someone you cannot understand. Buy American Invest American and demand better service with the dollars you earn. And stop voting for rich butt holes who steal your children's future.
  • 3 Hide
    duanekimball , September 6, 2008 6:08 PM
    I love how an American company will sell it's future for the over-indulgances of it's owners today.
  • 1 Hide
    phantom93 , September 6, 2008 6:10 PM
    WTF sick of this stuff, woot now we get poorer quality computers and poorer communitys. wooooooooo... Don't hand out american jobs to other natins when america needs those jobs.
  • 1 Hide
    Anonymous , September 6, 2008 6:48 PM
    The man who says he runs a computer assembly plant. you know you really have it dead on. how as americans can we give away all our money to some one who pays slave wages. thats like promoting dictators that force there people into isolation camps and feed them once a week. If they dont do what the government asks. seriously there are so many things wrong with the poor giving there money and jobs to people who care less about america lead alone our government and they are the ones allowing this to happen its not oil thats killing us its the frogine imports that are making it hard for any company to stay in business ... there are barely any manufacturing jobs left in the united states baring nitche markets. the sad thing is some company's say made in america but the parts were imported from other markets other than our own and just because they go through a distrabution facility in america makes them (made in america) i know this because i work for a place that has these practices. its wide spread kinda like HP outsorceing to Foxx Conn to build there Buisness PC's here in indiana ...(they pay 9.35hr to start) but takes up to 2 years to get hired through temp services. and no raise between that time... people dont want to pay a decent wage any more they are so cheap. and the government makes no effort to stop this kind of exchange of wealth the energy and oil markets are higher not just because of demand but because we hand over the vast majority of our money to over seas markets. and not back to the economy just like exiled one said
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