Dell India becomes No. 1, topples HP

[Francesca9]

Source: Times of India

BANGALORE: Dell saw sizzling growth in India in the quarter ended June, pushing it to the No. 1 spot in the organized PC market for the first time and displacing HP, which had held that position uninterruptedly for over five years. Steve Felice, president for Dell's global consumer, small and medium business, said revenue in India during the quarter rose by 77% and unit shipments by a still higher 90%, compared to the corresponding quarter last year


Read more: http://timesofindia.indiatimes.com/business/india-business/Dell-India-becomes-No-1-topples-HP/articleshow/6384154.cms

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If you wondered where the jobs went, many are now in India.

[OhioChick]

1. Meanwhile....IBM is India's second largest pvt sector employer

18 Aug, 2010, 05.47AM IST,TNN

BANGALORE: Tata Consultancy Services is the largest private sector employer in the country. It had 1,63,700 employees as on June 30. But guess who's number 2?

The honour goes to -- surprise, surprise -- IBM. That's right. Not to any Tata or Ambani company, or to Infosys or Wipro.

The fact that IBM has over one lakh people on its rolls in this country is one of India Inc's best-kept secrets. No one in US-headquartered IBM will admit that it employs such a large number of people in India -- for fear of a backlash at home. There's been rising anger in the US over the transfer of `American jobs' to lower cost havens, particularly India. Faced with an economic slowdown and a politically-damaging high employement rate, Barack Obama himself has begun to sound jingoistic. He has issued barely-veiled threats against US companies that ship out work and promised candies to those who stay patriotic.

Even as an IBM spokesperson declined comment when contacted, a source within the company said that in a couple of years, the India employee strength could cross that in the US, where it employs about 1,55,000 people, and where the pace of hiring is substantially slower than in India. IBM globally has a little over 4,00,000 employees. So, close to 1 in 3 of its employees is already an Indian.

http://economictimes.indiatimes.com/infotech/ites/IBM-is-Indias-second-largest-pvt-sector-employer/articleshow/6327859.cms

[ZM90]

2. This bullshit outsourcing needs to stop. Rec.

[cosmicone]

4. This is not outsourcing ...

Dell SELLS computers to Indians and makes money. Demand for PCs and laptops has gone up exponentially in India and as a result, American companies are making money here.

[leveymg]

5. It's offshoring. The computers sold there are mostly manufactured abroad.

If the company is listed in the US, and the parts and labor value-added are provided somewhere else, it's still offshoring.

[cosmicone]

7. True, but I don't see how this can negatively impacts the

US labor force. At least Dell's profits increase value in 401K plans of Americans.

If Dell sourced those parts and labor in the US, the computers would be overpriced for India.
If Dell didn't do it at all, some Taiwanese, Chinese or Korean manufacturer would do it.

[leveymg]

8. Each step of the value chain adds jobs, except the very last, which

is the distribution of profits. Wall Street is one of the least labor-intensive industries in proportion to the investment capital and profits it generates. The wealth created on Wall Street moves upward and outward. Unless investments are directed at domestic employment-creating industry, Wall Street does no good at all for anyone except global investors.

A 401K is nice, if you have a job with sufficient income to be able to contribute into it. If the choice is between a job that pays for the necessities of everyday living, and no job because your employer has offshored your position so as to increase the company's reported profits, most people will choose the former.

If Dell returned more of its manufacture in the U.S., even if their PCs were more expensive, there would still be a domestic market. Dell has a valuable brand name, which would be even more valuable in the US market if it was more closely associated with Made in the USA. Without growth in the domestic income base that drives demand for consumer electronics, as there once was, the US market is in decline. If Dell wants to make different, cheaper units for the overseas market, that's fine.

Now, do you understand how offshoring manufacturing negatively impacts the U.S. labor force, as well as the overall economy?

[cosmicone]

10. Your points are well articulated and mostly valid.

However, the choice here is not between Dell manufacturing in the US and Dell offshoring.

Domestically produced computers may cost as much as twice what the computers made anywhere else cost. If you looked at the burden it puts on the overall economy, the vicious cycle of increased costs will further erode any export potential.

I am saying the choice here is between Dell making money versus some Korean, Indian, Taiwanese or Chinese company making money. Given that choice, I'd opt for Dell making the money.

Regardless of where or whose computers Indians or anyone else buys, Intel and AMD still make money and thus part of the value-chain remains in the US.

In my opinion, America maintained its economic strength by always advancing to the next generation of technology and maintaining a monopoly on it as older technologies are shed to less developed economies. This last economic decline was caused, in my opinion, by a complete disinterest by the Bush admin to open the frontier of new technologies. I hope Obama can succeed in making a new frontier with green technologies and fueling the engine of domestic job creation.

[cascadiance]

12. This is why tariffs are needed!

THAT is the option I want to see put in effect.

That if companies want to "cut costs" by shipping manufacturing and other labor overseas, then they will have to pay that difference to what their costs would be to manufacture their products here domestically in taxes.

Then:
1) It provides no advantage to overshore company labor overseas, as ultimately the costs will still be the same if they build it there vs. here IF they want to sell in the U.S. marketplace.
2) There is an added revenue stream coming in to our government to reduce the costs of our spending to get us out of trouble.
3) It will allow new entrepeneurial companies to start in this country and use American workers that don't have to feel as threatened by being squeezed by competition that will offshore all of their operations and not give them room to compete.

Before 1980, this was the way this country did business, and before income taxes, this was the way our government gathered revenue to pay for itself.

We need to bring that back. Then those wanting to create these new technologies have less to worried about being squashed, and America's innovation can lead the business world again. And hopefully Wall street will be less of a leach on our economy if other parts can grow again, and be based on American workers (and hopefully more powerful unions, etc. too).

Now, a company that doesn't want to pay tariffs can sell more to overseas markets as well as making product overseas, etc. That's their prerogative. I'd argue then that they are no longer American companies, if they try to claim themselves as such, and would automatically shoot themselves in the foot for any kind of tax breaks or government contracts.

I think the window to do this is still available, as long as a good part of the world's wealth is still in this country. But that window is starting to close as more and more of American's fall out of the middle class and as more of the wealthy find ways of moving their wealth to the Caymans or Switzerland to shelter it from taxation. We need to fix this soon, or it will be harder to correct later.

[Francesca9]

11. Listings don't matter. The key question is Why?

Who cares where a company lists its shares?

Dell is creating jobs in India and not the US.

The key question is Why?

[Francesca9]

3. We need the jobs and we need the votes

If this isn't stopped there will be far fewer votes.

[Mimosa]

6. TRUE n/t

[pintobean]

9. That makes sense.

They can understand the customer service representatives, and with Dell, they're going to need to.