One thing I remember thinking when the Dell plant opened in Winston-Salem was that PC's were already becoming commodity items, and their prices were coming down dramatically. The facility was so large and state of the art it was going to require huge PC sales to make that site profitable.
Wow! You are absolutely spot on!
That must be why Mike Dell came out of retirement and took back control of a company he built.
It was a no brainer to built a site specific to the desktop when sales were declining globally.
And this is exactly what the plant in Ireland produced - PC's.
And you are correct - that plant is so huge and state of the art. It is not outdated and outmoded by any measure.
Dell could have easily scratched the PC line off their list of things to do and added their netbook, notebook, laptop, or monitor line. You have the workforce, the facility, and the local colleges gearing up and supporting you. It's a no brainer.
Except...
why not use the PC as a lose leader but, to do this, we need to get the PC's made as cheap as possible to cut our loses.
Reading those articles about the Irish decision, the leave Ireland to go to Poland and take an EUC handout of 84 million, to increase their profit margin by 3%.
Does this not remind you of the Edsel? The Edsel came out in 1958 (first release fall1957). The design and model was based around studies and focus groups of 1952 and 1953. The studies showed that the people (then) wanted an affordable yet luxurious large sedan. Instead of monitoring the world around them and global conditions of the moment, they used years old data to make a automobile and release it when the US was going into a minor recession, oil prices were up, and the european makers were introducing affordable, fuel efficient, and well made vehicles to the US market - The VW and the Volvo.
History does indeed repeat itself. And the people who took over Dell and steered them during these years in Winston failed to monitor the national and global demand for a product that was outdated and out of demand the day the first model rolled off the line.
Those that use the desktop PC should have a pretty good idea of how to upgrade their memory and speed without buying a new PC every year. New models were rolling off the line with faster memory, larger storage capacity, Windows Vista, more Firewire and USB 2.0 connections - all of which can be purchased and installed for a fraction of what purchasing new will get you.
Yes, history does repeat itself.
I hope that Winston-Salem gets their money back. Since most corporations have no inclination to behave ethically, very tight contracts and regulations are always necessary to make them meet their obligations. Dell are looking for loopholes, from what I can tell, to avoid meeting their agreements.
I know the contracts are posted somewhere on the internet and I have seen them on TV. The head of the Wake Forest Law School in 2003 wrote against using state, local, and country money as an incentive for the very reasons you mention...
but, if the county was compelled to go ahead with these plans, she spelled out what needed to be done...benchmarks and timelines.
Pretty smart women, I would say.
No - I do not know her religious, sexual, or political orientation.
update:
Picked up by BusinessWeek and posted as one of their top stories in the Technology sector
Dell's Plant Closure Raises Anger Over Incentives
Munch, Munch, Munch...
~sound of Raider and 2gajgops
eating their words accusing me
of making this story up~
Click Here
