Let us now sing the praises of Dell Incorporated. The computer giant offers an object lesson for the laissez-faire ideologues who keep insisting that we should turn our government over to corporations, since they are so efficient and customer-oriented.
In a fairly short time, Michael Dell’s concept of tight inventory control, direct marketing, and cheap-labor production in offshore factories quickly turned him into both a multibillionaire and a celebrity CEO hailed as a genius.
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But – oops – turns out that Michael’s genius has a few unsightly hickies on it. His corporation is now being sued by some of its biggest customers for peddling shoddy products, then deliberately deceiving buyers about the shoddiness.
Beginning in 2003, for example, Dell shipped millions of faulty desktop computers to customers. Even after executives learned that the products had a bad component that would cause a 97 percent failure rate, they urged employees to keep this quiet. “We need to avoid all language indicating the boards were bad or had ‘issues,'” says one internal email. “Don’t bring this to customer’s attention proactively,” instructed another Dell document.
The company even tried to shaft the law firm it had hired to defend it against aggrieved customers, balking against fixing 1,000 faulty computers Dell had foisted on the firm. Good grief! Shaft your best friend, cheat your own mother, but messing with your lawyer is a death wish.
Adding to Dell’s problems is a tumbling market share and plummeting stock prices, aggravated by federal charges that the corporation has been cooking its books for years. Indeed, the genius himself is even facing federal accusations of fraud and misconduct.
Genius is as genius does. Why should we entrust our public business to such people?
“Suit Over Faulty Computers Highlights Dell’s Decline,” The New York Times, June 29, 2010.
“Dell’s Price Fall Leads UBS Analyst To Raise Stock’s Rating,” www.wsj.com, July 1, 2010.
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