DELL moving manufacturing to India ...the rot starts here

formatman

Courtesy of the New york times ......
http://www.nytimes.com/2006/03/21/technology/21dell.html?_r=1&oref=slogin


March 21, 2006
Dell to Double India Work Force

By SARITHA RAI
BANGALORE, India, March 20 — Dell, the world's largest maker of personal computers, plans to double the size of its work force in India, to 20,000, and is looking for a site for its manufacturing unit in the country, the company's chairman, Michael S. Dell, said on Monday.

"There is a fantastic opportunity to attract talent," Mr. Dell said, referring to the country's workers, many of whom are educated in technological fields and speak English. "We will ensure a major recruitment push in engineering talents," he said at a news conference during a visit to Bangalore, India's outsourcing capital.

Dell has four call centers in India, where the bulk of its 10,000 employees work, as well as software development and product testing centers.

The company plans to double its hardware engineering staff to 600 in a year, Mr. Dell said.

The statement by Dell comes after similar announcements by Microsoft and Cisco Systems, which plan to double and triple their work forces in India.

Many Western multinational companies have been moving critical functions like design and research and development to India. Many of these had been in the forefront of shifting software development and back-office work, like call centers, to this country.

Salaries in India are rising rapidly but are still are about a fifth of those in the West for comparable jobs.

Mr. Dell said his company was also looking for a site to set up a manufacturing unit in the country. "We have been in discussion with several state governments," he said.

In a market where the penetration of computers is very low, companies like Dell are eager to set up a manufacturing base to help expand sales. Dell accounts for about 4 percent of the four million computers sold in India.

oli_ro

So, where exactly in the this article, or for that matter in all the stories covering this event, did you inffered that Dell is *moving* manufacturing ?

My understanding is they are expaning there to take advantage of the good opportunities - not only cheap talent, but also an emerging market.
This doesn not mean they will close factories in Europe or anything.

Not trying to play Devil's advocate, but stick to the facts.

DOLEMAN

Shipping costs from India to Europe would be quite high.

I suspect Dell in Ireland will be here for a few more years (for the cheap tax, if anything else.)

testicle

Limerick (and Macedonia) are the manufacturing plants for EMEA, that is Europe, Middle East and Africa. Dell also have manufacturing facilities in the US and Japan, among others.

India is not in EMEA. Problem solved.

Xterminator

Quote<the rot starts here>

Pot, kettle, black?

Its a bit hypocritical of the Irish complaining about outsourcing to India et al, when we've been doing the same for over 10 years!

I was in IBM when the American, and then the dutch jobs 'moved' to here. The same happened with Gateway, Dell, Intel, HP etc.

x

DublinWriter

There was a thread recently about the Irish Ferries fiasco a few months back.

One of the posters worked for Dell in Bray and said that Dell were moving a lot of the Irish jobs out 'by stealth', doing it very slowly as not to attract a lot of negative media attention.

Personally, I think it's hypocrasy on our part to critise such a move.

Eoin

DublinWriter wrote:

Personally, I think it's hypocrasy on our part to critise such a move.

I sort of agree, but you can see why people would not be keen to see jobs leave Ireland - if that is indeed the case.

On the other hand - from what I can gather from various news programmes etc - Ireland can no longer rely on our manufacturing industry. We will never be able to compete with India in this area, and probably parts of Eastern Europe also. The Services and generally higher skilled areas are the ones we have to be able to compete in.

MrPudding

The plant in Limerick is the most productive they have in the world. It is currently being updated. I doubt it will be moving anytime soon. It may not get any new production lines, it lost recently to Poland as well, but it will probably stay.

They recently setup an R&D centre and the European Service Command centre there so they still seem committed to Limerick.

Bray is no longer. All the jobs where moved out of County Wicklow and into County Dublin. Some of the Cherrywood stuff has moved to Glasgow, namely Client Gold Support. All the high end stuff is staying in Cheerywood though, apparently.

There has been some outsourcing of sales gimp and CS jobs but the high end tech stuff *seems* pretty secure. Any meeting i was at, before I left, great effort was made to make this point.

Gold support gives customer support in their native language. India currently cannot do this. That is not to say they won't be ale to in the future. At the moment Dell have a problem attracting multi-lingual technician to Dublin for salaries of 40k+. I would imagine it would be harder to get them to india while offering 3k+.

India has a huge talent for technical stuff. Once they nail languages we shpuld be worried.

MrP

the_syco

DublinWriter wrote:

Personally, I think it's hypocrasy on our part to critise such a move.

Say that when its your job is on the line.

oli_ro

Mrpudding - tonight, don't forget to pay a visit to the HR to pick up your P45 for breaking your NDA which you've signed when you joined Dell.

joking aside, thanks - really insightful comments about the situation.

oli_ro

Doh !

didn't fully read the post - you already left.

MrPudding

I didn't really say anyting that isn't public knowledge or that I didn't already say while I worked there.

MrP

Guy:Incognito

You have to argue about the cs positions switching countries, especially ones where english is not the main language. I have no problems with accents generally, but I know a few people who have problems holdign a proper conversation with sky's cs staff because of the Scottish accents.

My cousin rang Dell's cs a couple of weeks ago and presumably was on to India or another country in the region as he was talking to a guy with a poor grasp of English and an India/Pakistani (or somewhere similar) accent. He was looking for a new HDD for his laptop but gave up after about 15 minutes of trying to explain and buy the thing.

damnyanks

Company I work at spend millions on dell servers primarily because they can get a server over to us in 3 business days. HP & Sun take at least 3 weeks

ronbyrne2005

as said above this isnt immediately relevant to ireland.but eventually dell will leave ireland,with costs rising so high here it will make more economic sense to move production for europe to a central european site near eastern europe with its cheap labour force.its only tax advantages and the fact that the plant is already built here that keeps them here for the mean time.

of course almost all manufacturing will leave here and the government are trying to get "knowledge based" and "value added" jobs here but with the advent of the internet etc all these intelligent indian graduates are increasingly matching and exceeding us for "knowledge based " jobs at a fifth if the price.
foreign multinationals are responsible for nearly 90% of our exports! and spend around 37billion here on goods and services which have massive positive effects on our economy, we are clearly overreliant on these non indigenous firms and when they decide that the numbers dont stack up here anymore they will be off and we will be up the creek,i just dont see how we can compete in the years ahead in "knowledge industries" due to massive competition/low investment in r&d/pathetic levels of irish phd students in relevant disciplines etc.
mayeb if people invested less in overpriced bricks and mortar and more in entrepreneurial and educational activities we might stand a chance

WexCan

@testicle - Macedonia? Em - no.

@OP - The Indian manufacturing move would be for the Asia Pacific market. There are a number of different regions. Limerick is not Asia Pacific. Ergo, Limerick is safe for the time being.

replytohere2004

ronbyrne2005 wrote:

a
foreign multinationals are responsible for nearly 90% of our exports! and spend around 37billion here on goods and services which have massive positive effects on our economy, we are clearly overreliant on these non indigenous firms and when they decide that the numbers dont stack up here anymore they will be off and we will be up the creek,i just dont see how we can compete in the years ahead in "knowledge industries" due to massive competition/low investment in r&d/pathetic levels of irish phd students in relevant disciplines etc.
mayeb if people invested less in overpriced bricks and mortar and more in entrepreneurial and educational activities we might stand a chance

That's a shocking figure.

According to Wikipedia we are the 26th largest exporter in the world at $102bn.
(http://en.wikipedia.org/wiki/List_of_countries_by_exports)
Take 90% off that and our native exports are circa $10bn of which primary argiculture and argi-food are approx $8.5bn.
Of course, we will always have multi-nationals but by jayus we are dependent.

What seems to have happened in Ireland is that instead of the Irish people emirgrating to find work in factories, the factories have emigrated here.
We don't seem to have developed any real native industrial , enterprising or inovative culture.

We have outsorcing bringing us jobs, Germans lending us cheap finance, cheap flights bringing in tourism and the EU giving us money.
In short, we are lottery winners.

Also, in that Wikipedia table are -
Holland (10th, $365bn, Pop 16m),
Belgium (14th, $270bn, Pop 10m),
Switzerland (21st, $148bn, Pop 7m)
Sweden(23rd , $126bn, Pop 9m),
Austria (24th, $122bn, Pop 8m).

What are these countries doing that Ireland is not?

MrPudding

replytohere2004 wrote:

What are these countries doing that Ireland is not?

Cost inflation in Ireland is a joke. It is out of control. I am not talking about food and clothing etc. I mean things like electricity & gas which have apparently risen by over 50% over the last few years. Basically anything the government has a hand in has increased in price.

Added to this health costs are high. Infrastructure is sh1t and the government is incompetant.

MrP

damnyanks

MrPudding wrote:

Cost inflation in Ireland is a joke. It is out of control. I am not talking about food and clothing etc. I mean things like electricity & gas which have apparently risen by over 50% over the last few years. Basically anything the government has a hand in has increased in price.

Added to this health costs are high. Infrastructure is sh1t and the government is incompetant.

MrP

And it rains a lot!

testicle

WexCan wrote:

@testicle - Macedonia? Em - no.

@OP - The Indian manufacturing move would be for the Asia Pacific market. There are a number of different regions. Limerick is not Asia Pacific. Ergo, Limerick is safe for the time being.

Or wherever in Eastern Europe the new manufacturing plant is. Who really cares anyway.

I did make your second point earlier.

jesus_thats_gre

formatman wrote:

In a market where the penetration of computers is very low, companies like Dell are eager to set up a manufacturing base to help expand sales. Dell accounts for about 4 percent of the four million computers sold in India.

This says it all to be honest..

ionapaul

Actually, a Dell spokesperson has said that the Indian production facility may even supply Eastern Europe, as they think this will be more cost-effective than Limerick supplying Eastern Europe! Ouch...

oli_ro

Can you post a quote from that story or link it ?

Isn't that contradicting with was said earlier that they will be opening a manufacting facility in Eastern Europe ?

replytohere2004

http://www.siliconrepublic.com/news/news.nv?storyid=single6215

http://news.google.ie/news?hl=en&ned=en_ie&q=Dell+Eastern+Europe+india&btnG=Search+News