F*cked by Dell...Part Duex

[Gerry]

In 2005, the state of North Carolina, the County of Fosyth, the city of Winston-Salem offered up nearly $15.5 million in incentives to entice Dell into locating here for their new computer production facility.

It worked.

Dell built a gorgeous brand new facility. They have hired about 900 people, of which 600 are of the promised 1500 full time employees.

Today, 4 years later, they announced that they will cease operations here in January 2010. All part time employees, 300, will be let go immediately and the 600 full time will be gone by December.

All jobs will be outsourced to Mexico and other countries.

This is just the continuation of the raping of America.

There is never a downside for these businesses. The get handouts by the boatloads, given tax forgiveness by communities, and hold no feelings or remorse towards those being screwed over.

I am not sure if the Dell statement was two sentences long.

It was just 4 years ago this past Monday that the facility was opened.

Clarification:

The total given to Dell (State, County, City) was $281 million.

$15.5 million was from the city (which all indications are a big legal battle is brewing over Dell not meeting the stipulations attached to those incentives).


A Dell Computer Spokes, David Frink, person stood in front to the camera and stated:

"Production of the desktop computers manufactured here in Winston-Salem are going to be transitioned across our global manufacturing network.

We do have partners, partners in Mexico."

http://www.wxii12.com/video/21234645/index.html

If you listen to the piece, pay particular attention to the Mayor, Allen Joynes, mentioning that Dell owes back to the city 100% of the money for not meeting their 5 year commitment. Then you will hear the company spokesperson defend that Dell has met their side of the agreement.

I have a feeling that there is confusion on someone's part, that being a 4 or 5 year commitment. Notice again, the opening of this facility was just 4 years ago this past Monday. Two days after that 4th anniversary Dell drops this bombshell.

 

[JuniperPark]

Dell is using the NAFTA incentives to move to Mexico.

I remember when NAFTA was pitched to us, the politicians says, "I promise you that no American jobs will be lost due to NAFTA". A week after it passed, jobs started moving to Mexico.

This was also pitched as a way to "end poverty in Mexico". Mexico is now deeper in poverty than ever.

NAFTA has to be stopped. Nobody benefitted except extremely wealthy business owners seeking slave labor.

 

[draggar]

... and Dell ls laughing all the way to the bank.

I wonder what the contracts say - can the state, county, and city go after then legally?

 

[Gerry]

... and Dell ls laughing all the way to the bank.

I wonder what the contracts say - can the state, county, and city go after then legally?

After listening to the mayor claim Dell owes back 100% (15.5 million) and Dell saying NO WE DON'T, it is seemingly that a legal battle is brewing up.

Yes, they are laughing all the way to the bank.

And if the issue is Desktop PC's are down, then why not use this brand new, state of the art facility to produce another product line? You have trained technicians, the workforce, and the facility.

The reason? It is not profitable for these companies to produce ANYTHING in the US. DeskTops are a loss leader for any computer maker. Laptops are really not that far behind. In japan, everyone is smart phone crazy and as they get more and more powerful and capable of doing more, the computer manufactures do not even waste money advertising/promoting laptops in that market. Same with Korea.

So when the laptop makers don't even promote laptops in their own country, they head to the last frontier...the US.



Clearly, these were calculated decisions and all hinged around "timing" of when they would be released from their incentive obligations.

Yes, Dell is laughing all the way to the bank. They are in a no lose proposition. Any legal action will be a settlement. No way they are going to pay back the city 100% of the 15.5 million.

NAFTA has to be stopped. Nobody benefitted except extremely wealthy business owners seeking slave labor.

Great insight and points.

But, this seems to have been the cry since the start of NAFTA in the 1990's.

Has NAFTA benefited Canada?

 

[JuniperPark]

As the pro-illegal-immigration folks say,

"Mexicans are doing the jobs Americans won't do"... for $0.50/hour!

 

[Gerry]

As the pro-illegal-immigration folks say,

"Mexicans are doing the jobs Americans won't do"... for $0.50/hour!

I think the focus here (of this thread) is not so much a Mexican bashing (it is) but how a US corporation comes in to a state and community with hundreds of millions of incentives only to pull out and then immediately want to claim, when asked, that they have met their commitments to the terms of the incentives.

Again, just 2 days after their 4th anniversary.

 

[JuniperPark]

I think the focus here (of this thread) is not so much a Mexican bashing (it is) but how a US corporation comes in to a state and community with hundreds of millions of incentives only to pull out and then immediately want to claim, when asked, that they have met their commitments to the terms of the incentives.

Again, just 2 days after their 4th anniversary.

I think it's extremely relevant -- it explains WHY Dell is leaving. It's the bottom line.

I'm not bashing Mexican workers, in fact they are treated mostly as slaves in Mexico. It's the American and Mexican politicians and businessmen who not only allow by ENCOURAGE this to happen.

 

[draggar]

While JP's way of stating it may not be the most PC way of saying it - he does have a point. Why build a plant here when one can be built and maintained in Mexico for 1/10th the cost?

Americans have become way too comfortable with their lifestyles. They want high incomes but low costs - both are nearly impossible. Corporations though are able to outsource jobs for millions in savings yet for some reason the savings never seem to lead way to lower prices - just higher executive bonuses.

Its funny how in the 30s, 40s, and 50s, most US families were single income and lived comfortably AND America was a beacon of prosperity yet now multiple income families can barely make it and jobs are being shipped out of the US in the tens of thousands.

 

[Gerry]

I think it's extremely relevant -- it explains WHY Dell is leaving. It's the bottom line.

I'm not bashing Mexican workers, in fact they are treated mostly as slaves in Mexico. It's the American and Mexican politicians and businessmen who not only allow by ENCOURAGE this to happen.

Yes, it is relevant and part of all this reasoning by Dell.

But I have my suspicions much of this work will be going to Indonesia where the slave labor is abundant and the wages even lower.

Now, if that is the case then NAFTA works for no one, including Mexico.

On the very local side of things, not only did the new plant attract a workforce, the location of the plant needless to say was a catalyst for building new housing developments close by.

When a local private high school was looking to expand and build a new school, the board selected a site that was convenient mid-way between Greensboro and Winston. When it was announced early on that Dell was considering this area, it was a factor (but not the biggest factor) in that school proceeding with their new building plans.

I am sure a private high school with a 100% graduation rate and a rate of 99% of graduating seniors college bound was a big plus to people moving to the area to work for Dell.

This is a private school so naturally the tuition will be much higher than a public school.

Statewide, unemployment is over 11%. This just adds to the problem. It impacts the local community greatly.

 

[jasdon11]

While JP's way of stating it may not be the most PC way of saying it - he does have a point. Why build a plant here when one can be built and maintained in Mexico for 1/10th the cost?

Americans have become way too comfortable with their lifestyles. They want high incomes but low costs - both are nearly impossible. Corporations though are able to outsource jobs for millions in savings yet for some reason the savings never seem to lead way to lower prices - just higher executive bonuses.

Its funny how in the 30s, 40s, and 50s, most US families were single income and lived comfortably AND America was a beacon of prosperity yet now multiple income families can barely make it and jobs are being shipped out of the US in the tens of thousands.

Good assessment.

 

[Gerry]

The position of the City of Winston-Salem:

Mayor: City Will Get Back 'Every Dollar' Of Dell Money
http://www.wxii12.com/money/21238327/detail.html

Dell was to receive a total of $281 million in local and state incentives to locate the plant in Forsyth County. According to the agreement, Dell was required to invest $100 million into the plant, create 1,700 jobs by September 2010 and maintain those jobs for 10 more years. If those terms weren't met, the company would forfeit the incentive package.

The mayor then and the mayor now is Allen Joines.

I am very impressed that this man had enough foresight and business savvy to lay out these terms when courting Dell back in 2004.

I think today, more than at any time, smart fiscal decisions involving public (tax) funds is paramount.

 

[Raider]

Here's that post you asked for Doc;


President Bush expanded the federal budget by a historic $700 billion through 2008. President Obama would add another $1 trillion.

President Bush began a string of expensive finan­cial bailouts. President Obama is accelerating that course.

President Bush created a Medicare drug entitle­ment that will cost an estimated $800 billion in its first decade. President Obama has proposed a $634 billion down payment on a new govern­ment health care fund.

President Bush increased federal education spending 58 percent faster than inflation. Presi­dent Obama would double it.

President Bush became the first President to spend 3 percent of GDP on federal antipoverty programs. President Obama has already in­creased this spending by 20 percent.

President Bush tilted the income tax burden more toward upper-income taxpayers. President Obama would continue that trend.

President Bush presided over a $2.5 trillion increase in the public debt through 2008. Setting aside 2009 (for which Presidents Bush and Obama share responsibility for an additional $2.6 trillion in public debt), President Obama’s budget would add $4.9 trillion in public debt from the beginning of 2010 through 2016.

 

[Gerry]

Continuing on, there was a television reporter who had reported that he could not get any employee from Dell to talk to him on camera as they were leaving the parking lot. The reason he was given was they, the employees, were told by Dell that any employee speaking with the media would be terminated and would not get their employees severance packages, including severance pay, incentive payments, benefits continuation and outplacement services.

There has been no confirmation of this. However, it is quite odd that three days after the announcement, there have been no employees interviewed to get their response to the news of closing the plant.

Additionally, Gov. Bev Perdue has made plain to Dell the state expects back every "red cent" it's owed in tax breaks and other benefits because it didn't meet job and investment performance standards

 

[draggar]

Continuing on, there was a television reporter who had reported that he could not get any employee from Dell to talk to him on camera as they were leaving the parking lot. The reason he was given was they, the employees, were told by Dell that any employee speaking with the media would be terminated and would not get their employees severance packages, including severance pay, incentive payments, benefits continuation and outplacement services.

That's actually not uncommon - many companies do this. You sign an agreement to it in order to get your "severance".

I'm sure anyone could fight it under freedom of speech but no one would want to risk it.

 

[Gerry]

That's actually not uncommon - many companies do this. You sign an agreement to it in order to get your "severance".

I'm sure anyone could fight it under freedom of speech but no one would want to risk it.

Bingo.

The reason I posted this part is many who have never worked in corporate America have not had to deal with these clearly defined lines you do not cross. That is why Dell and most businesses have a "spokesperson" who has the authority to speak on the entity's behalf.

As for the freedom of speech, yes and no...Yes, you have the right to say what you want but, no - you do not have the right to work here.

And with North Carolina a "Right to Work" state, typically company policy will weigh very heavy.

 

[draggar]

My company has similar policies in regards to reviews (such as review sites - like epinions.com) and blogging - I'm sure social networking sites are under this, too. It's very strict and goes way beyond the stand NDAs.

As for speaking to the press - flat out no. The only thing we're allowed to do is to direct them to our press department.

What's getting to be hard now is that if you're talking to your friends at a bar and a reporter (not an obvious one) joins in - they can take whatever you say and put it in the paper (or their own interpretation) - I don't think they need to announce themselves as press.

 

[sashas]

I think it's extremely relevant -- it explains WHY Dell is leaving. It's the bottom line.

I'm not bashing Mexican workers, in fact they are treated mostly as slaves in Mexico. It's the American and Mexican politicians and businessmen who not only allow by ENCOURAGE this to happen.

Why would Mexican workers be treated as slaves in Mexico itself?

 

[Gerry]

Why would Mexican workers be treated as slaves in Mexico itself?

Any US company located in Mexico relies on cheap, cheap, cheap labor, poor conditions, no benefits,

Why would Mexican workers go to great lengths to illegally enter the US?

 

[jdk]

Your city should have had then sign a contract promising to keep business there for so many years.

 

[Gerry]

Your city should have had then sign a contract promising to keep business there for so many years.

They did. 10 years.

This will definitely turn into a legal battle.

There were benchmarks to be met (including the 10 year commitment) regarding number of full time employees to be hired, etc.

I have seen the documents displayed on the tele reports.

This will end up being

State of North Carolina,
County of Forsyth,
City of Winston-Salem

vs. Dell Computer Inc.

The Dell spokesperson (on air) says they have met all their commitments and the criteria of the incentive package.

I've yet to read or hear anything that supports Dells position.