Dell Ditching America

Within the next 18 months Dell Inc., the world’s second largest maker of personal computers, is looking to sell off all of its factories. After a disappointing quarterly profit that sent shares down more than 17 percent, Dell is relenting to increasing pressures to improve profitability.

In 1984 Michael Dell founded PC’s Limited while he was still a student at the University of Texas. Operating from his off campus dorm room, Dell pioneered the idea of selling personal computer-systems directly to costumers. As his business expanded, he dropped out of college to avert all his energy to his fledgling company. Dell garnered $300,000 in expansion-capital from his family and by 1985 had already produced the world’s first computer of its own design. By1999, Dell Inc. became the largest seller of PCs in the U.S. with $25 billion in revenue.

Fast forward 24 years, and this American entrepreneur is succumbing to the invasion of foreign interests just like the more than 16,000 other companies before him. Dell Inc. has long been a proponent of keeping production within the U.S., however our current trade policies make it impossible for any American companies to succeed.

Dell Inc. has four factories within the U.S. and six outside the country that are up for grab. The company is currently lagging behind rivals in wringing the most savings. Dell does not outsource operations to production to partners, and thus their profit margins were reduced by 17 percent to $616 million.

If Dell sells its own production facilities, foreign suppliers Taipei-based Hon Hai Precision Industry Co., Compal Electronics Inc. and Taiwan-based Quantra Computer Inc. will benefit. A Hon Hai spokesperson said there haven’t been any discussions to buy the facilities, and Quantra, the world’s largest notebook maker and supplier to Dell Inc., had no comment on whether or not it intends to buy Dell Inc.’s factories.

As the great American sell-off continues, we are losing any hope of sovereignty. Within the past five years alone America has most notably lost Anheuser-Busch to Belgian-based InBev for $52 billion; Alcon, the world leader in eye care was usurped by Swiss pharmaceutical maker Novartis’ for $39 billion and KeySpan Corp. was bought out by British energy distributor National Grid for $11.8 billion.

America is no longer producing enough products to sustain itself and we are being forced us to rely on imports. As strangling trade policies continue to weaken our economy, Americans are outsourcing jobs for cheaper prices. Producing anything within the U.S. is too costly to be competitive. We need to reform our policies, or watch as all of our companies are ripped out from under us.

Source Bloomberg:

Dell Inc. is seeking to sell all of its manufacturing plants worldwide and has approached contract computer manufacturers, the Wall Street Journal reported today, citing people familiar with the matter. … Dell last week reported fiscal second-quarter profit fell 17 percent to $616 million, missing analysts' estimates, as profit margins shrank after price cuts.

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