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Dell to Rid Itself of Factories by 2010

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7:30 PM - September 5, 2008 by Steve Seguin

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.

Source : Tom's Hardware

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mikeynavy1976 09/06/2008 1:54 AM
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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.

Mr_Man 09/06/2008 2:52 AM
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mikeynavy1976 :
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.


Hear hear.

Anonymous 09/06/2008 3:00 AM
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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.

jivdis1x 09/06/2008 3:38 AM
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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.

ravenware 09/06/2008 5:16 AM
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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.

ravenware 09/06/2008 5:22 AM
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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.

V3NOM 09/06/2008 8:07 AM
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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.

EYE 09/06/2008 8:32 AM
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Sadly not anybody can build their computers or are interested in, how would you build a laptop V3NOM???

Anonymous 09/06/2008 9:26 AM
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Many consumer purchases now are often driven by looks, rather than system specifications

spot on.

Anonymous 09/06/2008 10:10 AM
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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

dwellman 09/06/2008 3:26 PM
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Like anyone "makes" computers anymore; that is, fabs their own chassis, componets, ect. Modus operandi has always been design here build elswhere.

Lin 09/06/2008 3:41 PM
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terror112 09/06/2008 4:08 PM
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Dell...

jaragon13 09/06/2008 4:56 PM
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Dell's should cost 30% less than most prebuilts WITH THE SAME PARTS! Atleast!

They only want more money.

eklipz330 09/06/2008 7:25 PM
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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...

fulle 09/06/2008 7:35 PM
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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.

Anonymous 09/06/2008 7:45 PM
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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.

duanekimball 09/06/2008 8:08 PM
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I love how an American company will sell it's future for the over-indulgances of it's owners today.

Phantom93 09/06/2008 8:10 PM
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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.

Anonymous 09/06/2008 8:48 PM
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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

Anonymous 09/07/2008 12:46 PM
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I agree with the last few of the comments, where it was stated that the US has become more of a "Throw Away Economy" than any other nation in
the world. Back to the conversation, car manufacturers for an example, GM, and Ford. Half Designed here in the US and half in Europe. Built
from parts in other nations, assembled somewhere else or Mexico. Lame. Hyundai, Honda, Toyota are designed in Japan, and manufactured here in the US. My 2006 Tiburon was manufactured here in the US and my parents Camery, and HighLander were built here as well. My POS Ford Ranger built in Mexico, and fell apart as soon as it hit 39k. Yes, more of our jobs are being outsourced faster than they are coming in, and we can only hope that things can look up instead of down since the US un-employment rate has hit an all time high this year. But then again, many of the "groups" we have here have been accustomed to being spoonfed and wont get out and get a job where it drains our nation on all kinds of resources, when that money could be spend somewhere else. It's just the way things are going, I wont ever buy a Dell, if you want to support our nation your right, we will have to buy more expensive machines. But face it, we DONT want to spend more money on something when we can get it from a company like Dell for hundreds less, at least the majority of the nation will think like that.


"ExiledOne --> 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."

Nothing WE really can do, when were against all odds on penny pinchers who dont see the whole story.

Sigh.


ilovebarny 09/07/2008 1:00 AM
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so does this affect alienware? i mean alienware pc's are like even more expensive than dell but i hear they make quality stuff and have good tech support but if they go to pot along with dell there arint many places a person could get a half-way decent computer.

Anonymous 09/07/2008 11:09 AM
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Yep. This move doesn't surprise me one bit. It is only about the shareholders and those executive bonuses. The vast majority of the American population is just plain stupid. TBO. It is getting REALLY hard to find everyday products that are made in America anymore. I was looking at my box of Kellogg's Corn Flakes and those are now made in Canada. There is absolutely NO WAY I could build a computer with parts made in the USA -- except maybe the case.

The ONLY sure way to support the local economy is to spend all your free cash on Jack Daniel's and hookers. LOL

xyster 09/07/2008 6:58 PM
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good reply jevan64. lol. Dell is still making profits, quite a lot too, but it is 'declining', which is a scary thing for stockholders and CEOs.

since Dell is looking to increase profits, not save the consumer more money, it doesn't look like americans has much to look forward too from this all.

Dell's market recently is not the American market, but a growing asian market also. Ive heard over 50% of it.

As for comments on penny-pinchers -- a lot of the US are forced to be penny-pinchers these days. I wonder if a greater equality among the incomes in the US would make a difference though?

Its hard to really blame Dell, as its on a world level, and Dell isn't some home business anymore. Eventually the world will balance out economy wise, possibly with a still weaker US economy to follow and a stronger asian economy- Thats seems to be the only point we will stop loosing jobs to the rest of the developing world-- when our workforce equals theres.

Is taxing trade really a long term solution? It might do more longterm harm. The US is forced to keep innovating this way, and competing, otherwise it will just rot away in comparison. What America really needs to be doing to help fight this is invest in schools, technology, and research, when in fact, it seems to be doing the opposite these days.

From a world and humanity point of view, this could all be great news. The world is developing. Powers are being balanced. maybe the US will give up its 'throw away economy' tendencies?

invlem 09/07/2008 8:09 PM
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We wonder why our jobless rates are soaring in North America, sure its a world economy these days, but how do they expect the biggest buyers of their product (North America and Europe) to keep buying crap when they lay us all off and send production to another country?

This can only go on for so long eventually its going to backfire in a big way.

xyster 09/07/2008 9:04 PM
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"As concerns over a weakening U.S. economy grow, some economists anticipate consumers here will be spending less. But PC makers already know that the U.S. is not the place to expect giant profits--much of the growth in the PC business these days is coming in emerging markets, where many consumers are making their first computer purchase.
"When we look at the potential for expansion, we do see enormous opportunity ahead," Michael Dell said. "As far as the U.S. goes, I think the U.S. will be OK, but not the fastest-growing. We expect more growth in Asia."
"

http://news.cnet.com/8301-10784_3-9899377-7.html

I would say Dell doesnt think of america as their biggest buyers.

kami3k 09/07/2008 10:51 PM
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Gee even Dell's CEO is a idiot. Let's see 330 million people compared to over 3 billion in Asia? Yeap wonder which would have more growth....

Darkk 09/08/2008 4:26 AM
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The folks at Dell are buncha idiots. Outsourcing is NOT the answer. They need to take a look at their factories and see what they can do to reduce costs by streamlining things. High oil prices does NOT make sense to ship products overseas to manufacture and then ship them back to US. Granted labor cost are cheaper overseas BUT the current prices of oil makes shipping MORE expensive.

Dell needs to take a look at the hard numbers in terms of costs instead of just giving up and go overseas. I like Dell in corporate environment but for home use I either custom build the PCs or buy HP laptops.



billyg45 09/08/2008 4:58 AM
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Soon there will be nobody left to buy these products (except the rich and coporations), everybody's jobs will be outsourced. Maybe they should start building ultra cheap pc's for their future consumers- the two dollar an hour india worker.

mykem 09/08/2008 5:20 AM
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Dell's quality has gone down hill to the point that they are no longer a good value. Their support quality has also plummeted. I believe the business process that should change is to increase their image and quality. Outsourcing their builds takes it down yet another notch. I stopped buying Dells after I purchased one for a client after the Best Buy merger. I cannot recommend them to clients any more.

Anonymous 09/08/2008 7:19 AM
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Great comments people!!
Now, lets go hit an immigrant! ¬¬


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