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Dell to follow Google out of China?

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By Hani Megerisi

Posted on 24 Mar 2010 at 13:31

Dell is reportedly planning to pull its manufacturing plants from China.

The Indian Prime Minister told his country's planning commission that Dell was looking to leave China, according to a report in India’s Financial Chronicle.

“This morning I met the chairman of Dell Corporation,” PM Manmohan Singh reportedly told the commission. “He informed me that it is buying equipment and parts worth $25 billion from China. It would like to shift to [a] safer environment with [a] climate conducive to enterprise, with [the] security of [a] legal system.”

Dell has manufacturing plants in the Chennai region of India and the Penang region of Malaysia, both of which could be possible alternatives if Dell decides to exit China.

The announcement comes in the same week as Google decided to pull the plug on its Chinese search engine, after a long-running row over internet censorship.

A spokesperson for Dell said while "India also has an opportunity of becoming a hardware manufacturing hub... Dell has not made any plans to shift its component spend at this time".

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User comments

This is interesting. It would be great to see companies start to take a more moral stance about where they do business.

Currently the west relies too much on China, but similarly, China needs the west's business.

By Grunthos on 24 Mar 2010

Dell out of China

I think it's got more to do with reducing costs than any morality felt by Dell.

By CraigieDD on 24 Mar 2010

I would love to see the West reduce its reliance on China by 10-20% per year and see what their response is then. They rely massively on western manufacturing being performed in the cheap 'sweat shop' style factories.

By benzas on 24 Mar 2010

Unfortunately, the west has become too used to cheap products to pull out of china. It only takes one company to stay, and you can guarantee China would make it very worthwhile if the felt it necessary, and that company will then have a massive advantage over everyone else, so desirable as it may be, i's a pipedream

By dk2k1uk on 24 Mar 2010

Sod the morals, look at the business sense. There is no reason why companies should be in China today. No compelling reason why China is the only game in town: it's expensive in relation to what you get, and worse it's expensive in terms of them ripping off your IP. They'll happilly make your stuff for you today, but tomorrow they'll be using your technology and know-how to compete with you.

By Phoomeister on 25 Mar 2010

It's time to rethink

China makes thousands of products including Iphone, Imac, etc. that you rely on everyday. Do you know what those very same item would be costing you if China stopped making them? Do you know what would happen if companies began pulling out of China? It's very simple. The billions of Chinese will become more self sufficient, and then guess who would lose at the end. You will.

By doeoHk on 25 Mar 2010

Aw Snap!

Sorry for some reason Google chrome was reporting this all day today.

But I totally agree - if Dell is moving then its a good thing!
I hope that they do move work to India, and I seriously hope that other companies follow suit - they do have the choice, they stand to gain more rather than lose.

By nicomo on 25 Mar 2010

Let he who has not sinned......

Come on folks - wake up! China is a vast country that is thousands of years old. If China wants to change, it's people will change it, as they have always done - peacefully or violently. How would the US feel if a Chinese company tried to dictate to it or flaunt it's rules? Get over the moralising. China is here and the west in it's current materialistic era is dependent on it. If you want to influence them on anything, help them to be green, because the world needs that to happen and China will likely do it more cheaply than others. Get off the moral high horse!

By Patricu1 on 25 Mar 2010

Its all about the money

Simply put the Chinese buy Chinese products.

All of the big business contracts there,including all state run departments/institutions/organisations will buy Chinese products first.

Look at what IBM did: It 'sold' off its PC division to Lenovo, who I believe were their PC and laptop products were manufactured anyway.

IBM retained a non controlling share, but a share none-the-less... but now you have a Chinese brand and product, made in China. Guess who gets the big business? HP? Dell? Or is it Lenovo and IBM who gets the big business? Did IBM worry about IP, nope, instead it chose to do business with the Chinese in an open way, rather than force its Western owned business in, and ship the profits out.

Dell are going, because like Google they can't get the market share they desire.

In American business it has little to do with morals or ethics, just how much money can be made, and I doubt Dell's business model works in China, mainly because most people won't buy a premium brand when something cheaper can be bought, or if a similarly priced 'premium' brand is Chinese.

If we aapplied these same principles in all we purchased... food, clothes, cars, the UK's industrues would be flourishing, rather than be lying on a smouldering scrap heap. Truth is in business we want to make as much as possible and as consumers we want to spend as little as possible.

All of that bollocks about IP being stolen is as a direct result of putting the IP right under their noses in the first place.

If you open a factory in China, but loathe the Chinese you are a hypocrite - if the only reason you are there is to maximise your profits in the first place, then your ethics and morals account for very little, any opinions expressing about the Chinese expressing values, morals or ethics are two-faced.

As a footnote, Dell will obviously use this a PR exercise to show they are doing the right thing, but get real... is big American business really growing a conscience?

By tymitoh on 25 Mar 2010

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