Dell To Save $3 Billion, Shut Austin Plant, Cut Jobs

[OhioChick]

Source: Reuters

The company also said it would reduce costs in design, manufacturing and logistics, materials and operating expenses.
By Reuters
InformationWeek
March 31, 2008 07:11 PM

SAN FRANCISCO - Dell said Monday it plans to save $3 billion annually over the next three years by closing its Austin, Texas desktop computer manufacturing plant and cutting thousands of jobs.

The company's shares rose 1.1% following the announcement after closing up 1.6% on Nasdaq.

Dell, the world's second-largest PC maker after Hewlett-Packard, also repeated its goal of cutting 8,800 jobs, or about 10% of the work force, and said it will review "ownership alternatives" for its Dell Financial Services business.

The company said it had already eliminated 3,200 of the targeted jobs.

The Round Rock, Texas-based company also said it would reduce costs in design, manufacturing and logistics, materials and operating expenses.





Read more: http://www.informationweek.com/news/showArticle.jhtml?articleID=207000872

---

"cutting thousands of jobs..."

Dude, You're losing your job. :mad:

[hobbit709]

1. More offshoring from that good repuke-Michael Dell

[saigon68]

6. More crap made in that "Democracy" Fascist China.

Remember "Freedom and Democracy" are on the march there

[Morereason]

8. Exactly, like at Intel.. Times R tough, must layoff, all the while total employees is RISING,

They are probably just "getting rid" of American Labor, like Intel did a few years back.

[onehandle]

24. Yep. He is Such an asshole. Never buy a Dell. nt

[liberal1973]

26. Yep a repub ahole

I think McBush gave a speech in Dallas with Dell written on the podium.

[Spiffarino]

27. Please keep this kicked up

We're all so caught up in the Hillary vs. Obama deathmatch that we often fail to pay attention to what our enemies are up to. While we have our backs turned, they pull the rug out from underneath more American workers and sell their jobs to the lowest bidder.

No matter which candidate you support, let them know that you care about this stuff. They need to talk about these corporations by describing them as unpatriotic actors who put America last. They're both talking about ending tax breaks for companies that ship our jobs overseas. Tell them to take it further by "branding" them as economic traitors.

If our leaders energize the public to shun unpatriotic, un-American companies it will hurt their bottom lines and make Wall Street change its tune muy rápido.

Edit: I just took another look at this post and thought somebody might get the wrong idea about the "muy rápido" part. It's not a knock at Mexico. I happen to love Spanish.

[sergeiAK]

2. That's funny

They just built a plant in Winston-Salem or Greensboro NC. Why offshore now that the dollar is slipping if you didn't want to 3 years ago?

[Kelvin Mace]

7. So how long untill they close that plant?

I mean they extorted $250+ million from Raleigh, and the fools just couldn't give them the money fast enough.

[Morereason]

9. If they keep it they will "Insource" with foreign labor. Seen it before...

[Systematic Chaos]

3. Fuck Dell.

About the only thing worse than them now are E-Machines. :puke:

[Ilsa]

61. You forgot to say "Fuck Michael Dell" in addition to your excellent comment. nt

[defendandprotect]

4. ...because only money counts . . . screw Dell . . . I won't buy their products....

[Thickasabrick]

12. So....who else can you buy a computer from? Isn't everybody

doing this now?

[FatDave]

20. Well, even if a Dell desktop is assembled in America, the parts are surely from Taiwan or Indonesia

I'm not sure if there's any place in the US manufacturing PC boards of any kind anymore. Course being a huge geek with a major DIY streak, I've never bought a computer off the shelf. I buy parts from newegg.com (based in California) and assemble them myself.

If you're not inclined to do that, find yourself a small local PC shop. They're doing exactly what I do, just on a larger scale. Then not only are you keeping it in the country, you're keeping it in the community.

[B3Nut]

30. Nearly all the parts are coming from China now for any PC

whether it's off-the-shelf or DIY. We build whiteboxes and custom systems with Intel boards, and even their high-end server boards are coming from China. Asus and Abit might still make boards in Taiwan, but it seems most motherboard and VGA card fab has moved to mainland China. I DIY my own boxes too...never cared for store-bought PC's.

[Occulus]

35. Allow me to add some encouragement for those who might not be convinced

I have purchased exactly one "off the shelf" PC. It was the first computer I bought, and the fresh hell of non-upgradability at the time convinced me that I was much better off building my own.

That said, many PC shops offer what they call "barebones kits", which include the case, CPU, motherboard, and memory, but do not includ storage, software, sound hardware, or video hardware. These are intended as starter kits you can use to flesh out a complete product. The prices are often surprising!

Probably the best part about doing it yourself, though, is what you learn while you do it. I almost immediately learned enough to save me from spending money on someone else installing the operating system when I built my first PC, for example. I don't know how much cash that's saved me over the years. I do know, however, that I've never once had to send my PC in to the shop, simply because doing it all myself taught me what I needed to know to avoid that.

That alone was worth the money.

[H8fascistcons]

5. No Surprise

Dell and the others are just following the Bill Gates formula for American capitalism, screw you I need more billions, i'm getting my parts and labor from overseas... America you can fight back, you do not need a made in China X-Box or a made in China I-Phone or I-Pod. Just let them "rot" on the shelf make Gates, Jobs, Dell choke on their China junk, WAKEUP!!!!!

[defendandprotect]

13. What I'd like to see happen is that we close our borders to these people . ..

raise tariffs and let those who left stay out of here ---

[defendandprotect]

14. What would also be unique would be enforcing our monopoly laws . . .

[fudge stripe cookays]

10. Well....

there goes the Austin housing market.

Texas real estate has been remarkably stable, and the foreclosure rates there haven't reached the epic proportions of other states, but this is gonna be a HUGE blow to Austin's economy. Now the foreclosures start in earnest....

[ananda]

19. Sorry but..

I live in Austin.

If this kind of loss becomes a trend around here,
Austin will have a problem.

Me personally.. I would really like to see Austin
downsize a bit. It's been growing way too fast.
Of course, I don't want to see blighted neighborhoods,
drug dealing, and crime increase either.

It looks possible that the economic trending
nationwide will start to affect more cities and
Austin is bound to start hurting and crunching
at some point. Maybe it's starting now.

[girl gone mad]

28. It's been growing fast because..

lots of people were moving in from unaffordable bubble states. I know of a few people who sold their expensive homes in CA and bought much nicer, cheaper places in Austin. Prices have gone up quite a bit in the region over the last 3 or 4 years, but still remained affordable compared to anywhere on the coasts on Phoenix and Las Vegas. Several condo towers were built. The city changed, and in my opinion most of those changes were for the worse. Sprawl, over-development, and yuppification, etc.

[Texano78704]

56. And then they left...

Leaving several holes in the ground downtown.

[fudge stripe cookays]

29. I'm FROM Austin.

Lived there from 1971 to 1994. But lived in Dallas for 14 years after that and visited family in Austin often. I only recently left Texas.

I'd like to see Austin downsize too. It only depresses me to go home anymore because it's gotten so bloated and full of itself (the intersection of 1325 and I-35 makes me want to vomit-- I can remember when there was a nursery on the SE corner and the deserted outlet mall on the NW side and nothing else!). I can remember when SXSW wristbands were $10. But I don't see a major downsize happening.

The problem was that many Californians were able to sell McMansions there and reap the rewards, then get jobs at Dell and buy 4 times the house at 1x the price. This is definitely bad news for the Music Capital.

[AnneD]

43. More bad news for Austin....

Houston's the Music capital:evilgrin:
Musicians learn their trade in Houston, they just preform in Austin.

[fudge stripe cookays]

51. Bullshit.

Austin has talent from all over the country. If anywhere develops Austin music talent, it's Dallas.

Vaugahn Brothers anyone?

[AnneD]

53. I call your Bull Shit...here's a sample...

ZZ Top,Townes Van Zandt, Guy Clark, Blue October, Clint Black, Kelly Rowland, Chris Whitley, the Duff sisters, Barbara Mandrell, Kenny Rodgers, Paul Wall, Destiny's Child (with Beyonce et al), Lyle Lovett (ok he's in Tomball but that's close enough), and more Rappers than you can shake a stick at. Oh, we have most of NOLA jazz muscians now. We have the HSPVA Grammy designated High School (just check the Alums). The artists may play in Dallas and Austin-but they learn their craft in Houston.

And the Musical smackdown goes to........Houston....

[Manifestor_of_Light]

60. Don't forget Lightnin' Hopkins!!

And Gatemouth Brown.

Ringo (yes, Mr. Richard Starkey for the rest of you old folks) once said that he wanted to move to Houston because Lightnin' Hopkins lived there. No shit.

:bounce:

[fudge stripe cookays]

62. Game...set...match

Dallas...

the previously mentioned Vaughan Brothers (that includes Stevie Ray AND the Fabulous Thunderbirds alone, which is enough to skew the average), Reverend Horton Heat, Stephen Stills, the Toadies, Brave Combo (since Tomball can count, so can Denton), Charley Pride, David "Fathead" Newman, Erykah Badu, Meat Loaf, Boz Scaggs, Steve Miller, Ray Wylie Hubbard, Edie Brickell and the New Bohemians, The Butthole Surfers, Leann Rimes, Rhett Miller and the Old 97s, Michael Martin Murphey, Michelle Shocked, Norah Jones, my friend Mike Malinin (who attended UNT and is now playing drums for the Goo Goo Dolls). Older artists included Blind Lemon Jefferson and T-Bone Walker.

And if we're including lame crud like some of the stuff you had, Dallas had that too in the person of the Simpson sisters, Jessica and Ashlee, who were raised in Richardson.

And if you don't think that the music school at UNT or Deep Ellum's school of hard knocks haven't spawned some talent, you're nuts.

[AnneD]

64. In your wet dreams, I went to North Texas...

and stayed at Bruce Hall (the music dorm). Great place to learn theory but IMHO-for my money Houston has a better music scene. Where else could my very under age daughter and her newly minted garage pick up band find friendly gigs to learn the trade-not in Austin OR Dallas (we have several under age places). Hubby also works as a musician-Indian Classical Sitar-he gets more gigs and gives more lessons than he can handle. He may actually be able to retire from his day job soon. Austin is a che che address, and Dallas may have a bit of talent; but Houston supports more working musicians. You can actually make a living as a musician down here. And besides-we have the top instrument shops here also. Even the Dallas and Austin musicians head down here to get to Rocking Robin. Dream on bucko dream on.

[fudge stripe cookays]

66. Ha! Another Bruceling...

When were you there?

[AnneD]

67. Was there in BH

74-75. I just missed the 'Streaker' student riots.

[fudge stripe cookays]

68. Aah..before my time.

86-87.

I still don't concede.

But don't get to Houston often (even when I lived in Texas!). If your husband can make a career out of it, more power to 'im. That's not something that comes easy to anybody anymore.

[AnneD]

69. We'll just agree to disagree.....just like brothers and sisters

You know those disagreement-what taste better in potato salad mayo or mustard.

[Texano78704]

55. Shouldn't that be....

postform?

[gmpierce]

11. Down the drain - the American way

The interesting part of the Dell saga is that very few have caught on to what actually happened.

A few years ago, Dell turned in a profitable quarter - I don't have an exact reference, but it was in the vicinity of 35 cents per share. Exact numbers are not needed to make the point here.

The "market" in it's wisdom decided that the return should really be 50 cents per share (or something like that.)

The wisdom of "the street" is very often more like blackmail. You do it their way, or you go looking for a new job.

Dell went through the usual sequence of events: cheapen the product - cut back on service - screw over the employees and so on. It's a formula that eventually ends up with outright fraud.

They disbanded a customer support organization that it had taken 20 years to build and replaced it by outsourcing customer support to India - and not to the good guys, to the cheap guys who didn't speak English so good.

When they discovered that many of their cheaper computers were DOA - no one in their new "customer support" could figure out how to get a new machine shipped out. And they couldn't go back because they had fired all of the guys that made things work.

They lost customers and their whole "direct sale to the customer" approach went down the drain. When they made a good product this was an outstanding sales strategy. Once they trashed their own reputation they never quite figured out what was wrong.

So they saved themselves by cutting a marketing deal with Wal-Mart. Then they found out that when you do business with Wal-Mart, the only one who makes any money is Wal-Mart. So they patched the gap by signing up Best Buy.

Now they are going to outsource everything and the final gasp will occur when they sell whatever is left to the Chinese.

You might think of how very good Dell once was. It took almost four years for Wall Street to completely destroy them.

[alfredo]

23. Best Buy, where customers are invisible.

If they want to service their customers, they should do the store within a store like Apple does. Instead of depending on a BB employee to accidentally make eye contact, they should once again, copy Apple by putting a Dell Rep in the Dell store.

[OwnedByFerrets]

31. Didnt Gateway try that and lose

almost everything??

[alfredo]

34. They tried free standing stores where they had nothing in stock.

You couldn't just buy a computer and take it home. You got to see the demo, then order the computer.

[sentelle]

65. gateway?

Isn't that now, umm, acer?

Didn't acer buy gateway or something? If that's the case, its not an American company anymore

[redqueen]

38. Excellent analysis.

It's nice to see a few companies ignore those con men here and there, but it happens far too infrequently.

[Hugin]

39. Nice summary, gmpierce.

Pretty typical these days.

BTW, Welcome to DU!

[maddogesq]

15. Round Rock, rolling down hill. Oh crap.

I sell the schools in that area. Not good news, but I should expect this from Mikey Hell Dell, that outsourcing prick!

[ihavenobias]

16. :( n/t

[Codedonkey]

17. wow... I worked there for a bit last year as their so-called EMR-TECH position

Stupid shitty job at a stupid shitty place....


Sucks for those working there now.

[1776Forever]

18. Here's more on it: Dell closing plant as part of 8,800 layoffs

March 31, 2008
Dell closing plant as part of 8,800 layoffs
Posted by Michael Kanellos

http://www.news.com/8301-10784_3-9906938-7.html?tag=nefd.top

Layoffs hit close to home Monday at Dell, which said it will close its Austin, Texas, desktop manufacturing facility as part of an effort to trim billions in costs.

The Austin facility, which replaced a smaller facility in Austin, is where Dell fine-tuned its "build-to-order" strategy that allowed it to vault ahead of Compaq for the top spot in PCs in the early part of the decade. By not building PCs until orders get placed, Dell minimizes the time it holds components in inventory, which in turn reduces costs.

Although still considered a leader in logistics and low-cost manufacturing, Dell began to see its market share erode in 2005 because of complaints about poor customer service, among other factors. Dell is now number two behind Hewlett-Packard (which bought Compaq) in PCs.

[Tesha]

42. Part of this is the fact that desktop computers are pretty-much dead as a market segment. (NT)

[Spiffarino]

21. Another long stride in America's race to the bottom

Free-but-not-fair trade strikes again. While the countries we sell to slap tariffs on everything we make, we gobble up all their products and screw American workers in the process.

I'm looking at every label now. If it's made in China I don't buy except when there is absolutely no alternative. Unfortunately, that's what is happening more and more every day. Made in USA is spotted about as often as Bigfoot.

[OhioChick]

22. I check labels myself....

Beware....some items have a big US flag on them, but on the bottom reads: Made in China."

[Spiffarino]

25. Damn. I see that ALL the time!

I will say something to the storekeeper if I see it, and it's generally not very pleasant.

Side note: You know those "Support the Troops!" yellow car magnets? Every time I see one in a store I look at the package and I have never seen one that was made anywhere but China. Point that out next time you see some doof sporting one on his SUV.

"Hey buddy, I noticed that sticker was made in China. Does that mean you support the Chinese troops?"

[SammyWinstonJack]

36. And when we can no longer afford their cheap labor made products, what will

happen to these traitor "American" corps? Their cheap labor "employees" can't afford the high prices for the goods they manufacture, so where will these greedy corps find the customer base to buy their cheap labor made crap? Not thinking that far into the future I guess. Is it really that far?

[Spiffarino]

44. You are assuming they care about the future

They don't. It's about making all the money they can as fast as they possibly can, then selling off the parts to squeeze the last bit of blood from the company.

[Neshanic]

32. So much for the mass migration to Austin, the perfectest place on the planet.

[Giant Robot]

33. Can I get some good news for once?

Yet another automotive industry company is closing up shop in my rural area. It may be 100 jobs rather than 8,800 but the impact on the community will be titanic, and I used that word very carefully. Communities are dying up where I live.

Please can I get some good news?

Please?

[brentspeak]

37. Michael Dell can go straight to Hell

[OhioChick]

40. Damn straight....

and take Gates and all of the other corporate sell-outs with him.

[DainBramaged]

41. 8800 AMERICAN jobs in the shitter to pay for exporting those jobs

No more Dell computes at work for us. I mean it. Fuck Michael Dell.

[Heywood J]

45. Isn't Austin the founding plant for Dell?

I could have sworn it was. That would have been around 1982 or 1983. If that's true, there's got to be more than a few people reaching 25 years of service - I wonder what would have happened to the pensions or retirement funds. Wouldn't that be a kick to the teeth on top of the kick to the groin.



Dell's been Republican for some time. It doesn't surprise me that they're outsourcing to China. It does surprise me they've employed people on this continent this long.

[kwyjibo]

70. I think so. He lives here.

or at least ONE of his homes is in Austin.

[Politicub]

46. And the stock rises on this news

F-ing vultures. That's thousands of people in Austin who will be without a job once Dell lays them off.

On edit: Dell's computers are POS, anyway. I've never bought one for myself, but Dell supplied the computers where I used to work - always had more problems than I do now.

[mcscajun]

47. Wall Street loves layoffs: "The hell with people, show us the bottom line!"

:grr:

[OhioChick]

48. So Blatantly True. n/t

[fascisthunter]

59. News Like This Makes Dow go up....

while everything else goes down. Are we a feudal state yet?

[CRF450]

49. Sucks that my brother had to buy another Dell

I coulda built him a much better computer with higher quality and specs for the same price as what he paid for his. With the somewhat lower end specs of the one he recently bought from walmart, Vista has it kinda bogged down, along with all the crap sofware pre-loaded in it.

[conspirator]

52. The poweredge servers are very cost effective for small businesses

Better than being ripped off by IBM or Sun

[Lydia Leftcoast]

50. I bet the reason is that the shareholders are demanding higher returns

per share and the execs are demanding higher bonuses.

[treestar]

54. Before everyone goes on about how mean this is

Could it be that they were making lousy computers and they weren't selling enough? I've seen enough criticism of Dell right here. The workers could get jobs with the competitors who make a better product.

It makes me sad how on DU there is so much of a zero sum attitude towards all presently existing jobs. People seem convinced that no new job is ever created. There was a point in the past where Dell employed nobody. There are other companies with a future out there.

[brentspeak]

57. It makes me MAD when I see more of your pro-cheap labor posts here

As you've pointed out before, you're a well-paid attorney, a latte liberal, completely immune from having your job out-sourced. Your pro-globalization posts are self-serving, nothing more.

[fascisthunter]

58. .

[fudge stripe cookays]

63. Other companies with a future?

Where, pray tell? China?

The fact that Dell's quality sucked is neither here nor there. Those people in Austin are going to be suffering from job loss very soon. They're not all going to be able to uproot themselves, even if a job DOES surface somewhere.

That's 8000 something people flooding Austin's jobforce. And it's gonna hurt. Dell's a MAJOR employer down there.