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Dell To Leave China For India
halfEvilTech writes "India's Prime Minister, Manmohan Singh, told the Indian press that Dell chairman Michael Dell assured him that Dell was moving $25 billion in factories from China to India. Original motives were cited for environmental concerns. But later details come up as to Dell wanting a 'safer environment conductive to enterprise.'"
If Dell can guarantee their parts are made in India and not China, I just might be getting a Dell next year.
Dell spokesperson denied the story this morning. Who's editing today, me?
If you declare war against the people who are trying to make you rich, you suffer the consequences.
a 'safer environment conductive to enterprise'
Read as "safer from industrial espionage and nationalization"
If this is true, it is a decison vastly more consequential than anything Google has done.
So instead of American jobs being outsourced to one dirt-poor foreign country they'll be outsourced to another. Total significance to the American worker and the American customer -- nothing.
Kwisatz Haderach
Sell the spice to CHOAM
This Mahdi took Shaddam's Throne
Oh wait, that was their Customer Service department. I wonder how that experiment went ;-)
"Klaatu, verada, necktie!" -Ash
Sure that wasn't "conducive"? I know Dell is an electronics manufacturer, but the company itself is likely non-conductive in the first place.
$_ = "wftedskaebjgdpjgidbsmnjgcdwatb"; tr/a-z/oh, turtleneck Phrase Jar!/; print
I know they would not do that citing cost and other crap. But I certainly would support any company moving production base from communist country to a democratic country. I know there are people here criticizing US, India and other democratic countries about certain draconian laws but these countries are much better than China.
For any number of reasons, especially when it comes to deals like this. Saying "Honey, I wasn't sleeping with her in our bed." doesn't mean you weren't cheating.
Wonder how many more US companies are going to pull out of China. First google, then godaddy, now Dell. What happens when all that China has left, is China?
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India safer? In some ways I suppose but it depends on what you are talking about. The Indian government is less draconian and less likely to try to compete with you. Expropriation is probably less of a concern in India. The rupee has somewhat better convertibility than the yuan and currency flows are less stringently controlled. Plus there is a much larger contingent of English speakers than in China. India's legal system is slightly less hostile to foreigners than China's though both are to be avoided if possible. Freedom of speech is obviously better in India though China doesn't have quite the death grip on speech everyone here seems to think they do.
On the other hand, India's infrastructure is badly trailing that of China, there is less foreign capital to improve things, corruption is a huge issue in India, business regulations are as bad if not worse than China, and transport costs are somewhat worse. Despite the number of engineers, India has less experience with certain types of manufacturing. India is a democracy (which is good) but that doesn't always make doing business there easier - in fact it often makes it harder due to populist policies.
There has been something of a "gotta be in China" attitude but China isn't always the best place to make things. There are places with cheaper labor (Vietnam for instance) and places with better logistics (Singapore) and places with expertise silos (Japan) that might make better choices. Plus betting everything on China is risky by itself. Doing business in China is hard, risky, requires constant oversight, and a long term perspective. Anyone thinking they can just produce stuff cheaply in China with little difficulty is going to lose a lot of money very quickly.
I've done global sourcing in both countries - it's difficult no matter which way you go. I've personally been in a factory in Chengdu where parts for Dell computers were being assembled. Moving production from China to India might be a good idea from a diversification standpoint (bad idea to do everything in China) but it's only marginally safer in my opinion depending on exactly what one means by safer.
wonder if this would drive them to go to war just wondering, after all the U.S. coperations are moving alot of their assests out of China, and China isn't going to be as powerful as it use to be, it would tick of many because of this.
You may not realize this, but Taiwan is part of China.
The truth of that statement depends very much on whom you ask. As things stand Taiwan is de-facto an independent country. The People's Republic of China (mainland) maintain that Taiwan is a part of China, whereas the Republic of China (Taiwan) maintains that they are actually the legitimate government of China and that the PROC has no sovereign authority. However Taiwan has had to take great care to not antagonize the PROC due to the threat of invasion.
In other words, it's complicated.
Aren't they allowed to use your prison slave labour system, like other US manufacturers?
Web Design
It is my pleasure to be helping you today. I understand you are trying to move your factories from China to India. Just a moment and I will bring up your account. Ok I will look up moving your factories from China to India in our knowledge-base. Have you tried plugging in your factories?
- For the complete works of Shakespeare: cat
There's simply nowhere else that makes these things but China.
Nowhere? As someone who has sourced items from numerous countries I can say with authority that you are quite mistaken. China is an excellent (if difficult) place to source things cheaply but it is hardly the only place to make things. There are places with cheaper labor (Vietnam), better engineering (Japan/Germany), comparable/better logistics (Singapore), and the list goes on. China is an important option but not even close to the only option.
Remember too that the US has a $2.7 TRILLION manufacturing sector. The US manufacturing sector is larger than the GDP of all but 5 other countries on earth. Lots of stuff is made here - just not the labor intensive stuff. The notion that manufacturing in the US is dead is laughably wrong.
You should have signed in before submitting this comment...it's worthy of some +1 mods, in my opinion.
Just once I'd like someone to call me 'Sir' without adding 'You're making a scene.'
{{citation needed}}
=~ s,(.*),<sarcasm>$1</sarcasm>,g if any_point_you_wish();
All it takes is some plugging of cords and tighten a couple screws then toss it into the burn rack.
Building a computer isn't exactly rocket science, its closer to putting together a snap together model.
Don't know something? Look it up. Still don't know? Then ask.
As for sweatshops, a large reason you've seen them dissapear to an extent in China and other countries is not government crackdowns (any country that has large amounts of sweatshops is invariably one that will not do more than token raids and legal pressure) but from the companies employing said labor because the public outcry about using said labor can be business-killing.
Give India the same capital and time that China got, and I'm certian that we'll see the at the least the same selection of quality. But with far more positive social benefits for India.
Wow, surprised we can all hear you from way back there in the 1800's...
They can't afford to pay the wages/benefits and ALSO pay their C*O's assloads of money.
No sig for you!!
The USA, it's safer and conducive to enterprise, and with the economy in the pits a great time to negotiate with state governments, not to mention the karma factor Mr Dell.
"If any question why we died, Tell them because our fathers lied."
China doesn't sell us anything...
Lenovo will be very surprised to hear that. So will lots of other Chinese companies that you just aren't familiar with yet.
Thanks! Thought I was signed in but oh well...
is 2 - 1 in the game "corporate America vs. the Chinese government" @see "CommonWealth" by Hardt and Negri, neo-Marxist doctrine. They point this out, and predict it, quite nicely...
Religous speak to God. Insane are spoken to by God. When all shut up, one can finally hear Shostakovich in peace
Read as "safer from industrial espionage and nationalization"
Read as "we think it will save us money", but the story is supposedly bogus (or Dell wasn't ready to admit it yet, or leaked it to scare their Chinese vendors, etc.)
Please help metamoderate.
Even though Google, Domain registrar GoDaddy and now Dell seem to be pulling out of China (in Google's case its pretty certain) there's one Company that has no qualms about staying.
Good oldie Microsoft has said they have no problem following the countries laws.
This is strange considering Ballmer's obvious aversion to communism
MS' Ballmer: Linux is communism (although I would argue that china is not nor ever has been a true communist state)
Lucky China...
Taiwan follows the old government that existed prior to the "cultural revolution" that spawned the current Chinese Communist Party government.
When you say cultural revolution in the context of China, you are actually talking about a fairly specific event that occurred long after the civil war that resulted in the schism between Taiwan and mainland China. The Cultural Revolution occurred in the late 60s whereas the KMT's retreat to Taiwan occurred around 1950. The communist party in China preceded the cultural revolution.
It appears that this article has been debunked.
Why no main-page correction to the article, or are we simply going for sensationalism now?
Editors?
Dell spokesperson denied the story this morning
Protip: spokespersons spend 90% of their time "denying" things which 2 weeks later turn out to be true.
It could have been Dell was, or still is- they just don't want to admit it yet.
Please help metamoderate.
I think Dells move to diversify it's manufacturing is a smart move especially with a currency war with China v EU,USA in the offing. You can bet that wont be good and Chinese made goods will be facing down the barrel of a 25-40% tariff slapped on them. Any US or EU company with all their manufacturing based in China are placing their long term viability on risky ground if they don't diversify their manufacturing starting now.
there is the little issue of China having electricity and India not
Yeah, it's impressive that like half the world's CD-Rs and DVD-Rs are made there in steam-powered plants. Actually, I heard that in some plants they do it by hand!
No, really.
This probably explains why I'm having trouble getting them for under 10p each.
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And we did it really really fast.
Mind if I ask what you were sourcing?
My family business (metal manufacturing in Oz) sources from India; and get decent-quality raw steel casting, but every time we try and get steel products from China they send us sh*t that fails safety standards.
Wait! Whats a sig?
We don't need China
OK, how are you planning to isolate China and who do you think can replace 1/5 of the worlds population as a work force?
It's just nice to have cheap stuff, and they make stuff cheap.
It goes well beyond "nice". People don't shop at Walmart because it's "nice". All those thing you buy have a labor component to them and if you spend more on labor you have less to spend elsewhere. That's called an opportunity cost. You can spend more if you want to and I'm sure someone will take your money. Spend more at the local hardware store, you have less to spend in the local bookstore. And both will probably go out of business anyway because artificially propping them up is an inefficient use of capital.
If no one was buying, they couldn't sell.
That's exactly the predicament the US economy is currently in. We have more supply than demand.
I was sourcing components for alternators. Looked into doing some valves and a few other items. Spent a lot of time in Mexico and a few weeks in China and southeast Asia. One of my associates was from India and he looked there for the same components.
Getting metal from China is always a crapshoot and you have to test everything you get. They can produce good stuff but you are just as likely to get some alloy completely different from what you ordered. My father-in-law owns a wire weaving business and he's always complaining about stuff sourced from China.
You should have signed in before submitting this comment...it's worthy of some +1 mods, in my opinion.
I agree ... one of the most reasoned opinions I've yet heard on the subject.
The higher the technology, the sharper that two-edged sword.
Conductive? Conducive!
Comment removed based on user account deletion
wrong, caste system alive and well, especially in northern India. U.N. Human Rights Council declared it a human rights abuse at end of last year.
I have to wonder if the Stern Hu case is a factor in this. For those not in the know, Stern Hu is an Australian who is currently on trial in China for accepting bribes and industrial espionage. Mr Hu works for Rio Tinto, the iron ore giant that China failed to buy last year.
Everyone knows that bribery is a large part of doing business in China. Stern has been in court for 3 days now. Even consulate officials have been denied presence at the trial, relying on state reports of what went on each day. Stern has admitted he took bribes, although he challenges the amount claimed. He will be sentenced on Monday - the trial started last Monday.
In the article, Michael Dell talks about how he wants to do business in "places with a legal system". I think that the Hu case, Rio Tinto's experience, and the events with Google would be making any enterprise re-evaluate the cost and risk of dealing with China.
Mod parent up! :)
Sounds like a relationship issue to me...
Now to be known as 'Delhi'.
i would venture far to say that china is taking an opposing stance in acta negotiations, and american companies are repositioning themselves, also being tools for the acta negotiators to pressure china to agreement and also therefore threatening other countries. if china doesnt agree with acta, it basically fails. they have 1/7th of world population.
Read radical news here
Regarding corruption, I just recently came across a study comparing corruption in countries like China, Russia and India. It was noted that in India corruption patterns resemble a pyramid: lighter at the top but heavier at lower levels; in China where the (only nominally) Communist Party controls all aspects of power, corruption was heaviest at the more powerful levels of the machinery (also taking into account the rampant cronyism prevalent at the very top through family connections) while the less powerful lower levels weren't as corrupt (upside down pyramid).
In Russia corruption was prevalent at all levels.
Of course the less tangible moral corruption (e.g. of criminal policies of the state/government/Party) wasn't being taken into account...
What this means for foreign investors is that in India companies (dealing largely with higher levels of the government) are less likely to be exposed to the large scale corruption at business levels present in China, while Indian consumers are also more likely to purchase foreign or indian-made foreign goods than the nationalistic Chinese (thanks to systematic "anti-colonial" propaganda). While India has moved towards less protectionism (import duties) since the 1990s, there also remain tax incentives for manufacturing goods domestically in India, something that can add up considering the size of the market.
Should invading one's peaceful neighbours be opposed, or rewarded with trade deals?
Why is it not a democracy? Because the people don't vote directly on every issue, but rather vote for people who then decide?
Well that's how the UK works, but the UK isn't a republic.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
> Taiwan does not have a seat in the UN.
Lacking a seat in the UN is not a good indication of the legitimacy of your claim to statehood when you assert your independence from one of the countries with a veto power on the security council.
Claims to statehood, under international law, require (1) a defined (or fairly well-defined) territory, (2) a people, (3) a government, and (4) the capacity to enter into relations with other states. (This was originally based on the Montevideo convention of 1933.)
Taiwan has all four. It is a state, de facto and de jure.
-- IANAL, this isn't legal advice, and definitely isn't legal advice for you. Also, Squee!
I honestly don't understand why every company doesn't do this. What's with the jones everybody has for China? Sure, they have a lot of people, but India will have more in a few years, and is on a much better course.
China has no Rule of Law, so anything useful any company builds there will just be taken someday by the government (or one of their cronies). They have already been arbirarily arresting foriegn businessmen. Why anybody would want to try to do business there is beyond me.
India has the same (or better) upside growth potential, will have a larger population, and actually has Rule of Law.
The UN HCR is not what you think it is.
My solution, isolate China and then abolish copyright.
Ignoring for a moment whether that is a good idea or not, explain how you plan to do that. How are you going to isolate 1/5 of the world's population and one of largest economies on earth? How are you going to do it without causing a global economic meltdown and possibly a shooting war in the process? Seriously, I'd love to hear you come up with an answer to that one.
(for the record I think your suggestion to isolate China is both impossible and pointless)
Perhaps we could live on less or stretch our dollar farther if we could experience the last century of words, sounds and images without having our wallets maimed for the "privilege".
I'm sure we could if you have some solution to the free rider problem. Copyright and patents exist specifically because of that problem. Solve it and there is no need for copyright to exist. But I'm pretty sure you have no solution and just want to get stuff for free.
The Soviets weren't communist any more than Republicans are libertarian. Communism was nothing more than rhetoric they used to whip up and manipulate the masses, but when you look at their actual actions, they're pretty much doing the exact opposite of what the rhetoric leads you to expect.
Hell, communists are more radical than libertarians (anarchy-wise). Libertarians believe in small national governments; communists want no national governments.