Dell

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Dell Inc
Type Publicly-traded
Founded 1984 (as PCs Limited)
Founder(s) Michael Dell
Headquarters headquarters:Round Rock, Texas (USA)
Area served worldwide
Key people Michael Dell (Founder, chairman, and CEO), Michael Canon (pres. of global operations), Ronald G. Garriques (Pres. of global consumer group), Mark Jarvis (CMO and Sr. VP), Brian Gladden (Sr. VP)[1]
Industry technology
Products desktop PCs and workstations; servers and networking products; laptop computers; and storage solutions, including storage area networks, network-attached storage, direct-attached storage, disk and tape backup systems, and removable disk backup[1]
Services infrastructure consulting services, deployment services, asset recovery and recycling services, training services, support services, and managed services[1]
Revenue 62.49 billion USD[1]
Operating income 4.347 billion USD[1]
Net income 3.572 billion USD[1]
Total assets 23.1 billion USD[1]
Employees 82,700 (full-time)[1]
Website http://www.dell.com

Dell is the world's largest direct-sale computer company. It provides computer products for the consumer and business markets. Besides desktop and notebook PCs, Dell offers network servers, workstations, storage systems, printers, projectors, and Ethernet switches. It also sells third-party software. Dell has a growing services unit that provides systems integration, support, and training. In 2006, it had sales of $55.9 billion and profits of $3.5 billion. It plans to start selling in retail stores in 2007.[2]

Ties to the American Legislative Exchange Council

Until 2012, Dell was a corporate member of the American Legislative Exchange Council (ALEC) as of 2011. The corporation is a member of the Education Task Force, and materials from the 2011 ALEC Annual Meeting listed it as a new member.[3]

Dell confirmed on June 21, 2012, that it would not be renewing its ALEC membership.[4]

For other ALEC corporations, please see the list here. For other corporations which have cut ties to ALEC, please see that list here.

About ALEC
ALEC is a corporate bill mill. It is not just a lobby or a front group; it is much more powerful than that. Through ALEC, corporations hand state legislators their wishlists to benefit their bottom line. Corporations fund almost all of ALEC's operations. They pay for a seat on ALEC task forces where corporate lobbyists and special interest reps vote with elected officials to approve “model” bills. Learn more at the Center for Media and Democracy's ALECexposed.org, and check out breaking news on our PRWatch.org site.


Company History

Historical Financial Information

Business Strategy

Use stock parts to produce PCs according to customer orders.

Political and Public Influence

Ad boycott against Air America Radio

Dell refused to advertise on the progressive Air America Radio. In October 2006, around 90 companies, including Dell, told ABC Radio Networks that they did not want their ads to play on any radio stations that carried Air America Radio. [5] [6] [7]

Political Contributions

The Dell political action committee gave $136,696 to federal candidates in the 2006 election - 22% to Democrats and 78% to Republicans. [8]

During the 2002 election cycle, Dell gave $425,250 in soft money contributions, $415,250 of which went to Republicans, and $10,000 of which went to Democrats. [9]

Lobbying

The company spent $1,560,000 for lobbying in 2006. $717,000 went to six lobbying firms with the remainder being spent using in-house lobbyists. [10]

Corporate Accountability

According to Dominican media reports, a Santo Domingo court sentenced the local Dell, Inc. subsidiary to pay RD$116.5 million (approximately US$3.6 million) in indemnification to Dominican information technology firm Xolutiva, S.A. The Dominican company sued Dell for RD$300 million for violating its rights as the Dell’s local representative.[11] The Civil and Commercial Chamber ruled against Dell for violating Law 173 on International Representations, holding that Xolutiva represented Dell in the country since 1997, but Dell unilaterally decided not to renew the contract without due compensation. The court ordered Dell to close its operations in the Dominican Republic.

Labor

Foxconn Electronics, a factory located in China that supplies $20.7 billion worth of products annually to Apple, Dell, Hewlett-Packard, Intel and Sony, and other top name brands, has come under criticism for alleged labor violations. According to British newspaper the Mail on Sunday[citation needed], labor rights violations at Foxconn Electronics include the following:

  • Wages below the legal minimum, with workers reportedly earning $50 a month
  • Routine work shifts of 15 hours
  • Poor and unsafe working conditions
  • Inadequate dormitories

China Labor Bulletin research director Robin Munro stated, "They're not sharing proportionally in the benefits and profits in this huge globalization effort…. The only reason they can survive in these cities is because all they do is work." Foxconn states that there are huge discrepancies between the truth and allegations cited in the report.[12]

Dell is one of the major purchasers of electronics produced at the Lite-On Computer Technology production facility in Shijie Town, Dongguan Province, China (founded 1997).[13] By early 2008, the facility employed about 5000 people who enter the company by paying agencies based in Shijie town, Dongguan, 500-600 yuan (for men) or 200 yuan (for women). [14] While Lite-On production schedules follow a normal 8-hour workday, breaks consist of only 10 minutes twice a day and are unpaid – further, overtime work in the evenings, on weekends, and especially during busy seasons, is mandatory and can reach up to 100 hours a month, in violation of both Chinese Labor Law and the [EICC] standard. [15] Basic wages at Lite-On complied with Chinese minimum wage laws (690 yuan/month in 2007), but until mid-to-late 2007 when overtime began being paid at twice the standard weekend rate (8.24 yuan/hour) the company violated overtime wage laws by paying over 2 yuan less per hour. [16] A fire in the factory in February of 2008 has caused workers to be extremely concerned about their safety, and as of May 2008 production had not yet fully resumed at full capacity due to the damage the fire had caused. [17] Workers are charged up to one quarter of their wages on food, electricity, and water for eating and living in the factory dormitories, which house up to 16 people per room. [18] Research conducted by [SACOM] and [Bread for All] in early 2008 concluded that workers at Lite-On were unaware of their rights under either [EICC] standards or any of the codes of conduct of Lite-On’s customers, including Dell.[19] Dell had been purchasing power supply devices from the Yonghong Electronics factory in Shenzhen, China, but after a 2006 report by Students and Scholars Against Corporate Misbehavior detailing the labor abuses and employment of underage children at the Yonghong factory, Dell "cut and run," suspending its business relations with the factory but refusing to address any of the issues raised in the report.[20]

Lite-On Xuji Electronics Co., Ltd. Is a keyboard manufacturer based in Dongguan, China. The factory was founded in 1995, and while Dell is its major buyer, Lite-On Xuji sells keyboards to Acer, Apple, Foxconn, Gateway, HP, IBM, Lenovo, Logitech, Microsoft, NEC, Sony, and Toshiba.[21] According to a 2008 report conducted by SACOM and Bread for All, the factory employed 3000 workers who work between 10 and 12 hours a day.[21] The factory began paying workers legal wages and overtime wages in 2008, while they had been paying illegally low wages in 2006 and 2007.[22] However, workers continue to work more than 100 overtime hours per month, well about the legal limit of 36 overtime hours monthly.[22] Due to long hours standing, repetitive tasks, and high work speed, workers suffer from swollen legs, back pain, and other repetitive motion injuries, as well as irritation from paint and paint thinner fumes name="high tech 31-2"> Jenny Chan, the Research Team of SACOM, and Bread for All. May 2008. “High Tech – No Rights? A One Year Follow-up Report on Working Conditions in China’s Electronic Hardware Sector.” P. 31-2.</ref>. Despite these problems, Xuji factory has no program in place to “identify, evaluate, and control the hazards that arise from physically demanding work.”[22] Management threatens workers who make mistakes with the possibility of the withdrawal of factory client orders. name="high tech 31"> Jenny Chan, the Research Team of SACOM, and Bread for All. May 2008. “High Tech – No Rights? A One Year Follow-up Report on Working Conditions in China’s Electronic Hardware Sector.” P. 31.</ref> Worker dormitories are very crowded and noisy, housing 16 workers per room, who must share all facilities in common and often have trouble sleeping due to noise. name="high tech 32"> Jenny Chan, the Research Team of SACOM, and Bread for All. May 2008. “High Tech – No Rights? A One Year Follow-up Report on Working Conditions in China’s Electronic Hardware Sector.” P. 32.</ref> While workers were not aware of their labor rights under the EICC, they still “expressed the urgent need” for safety training as well as shortened standing work hours or at least longer breaks and rest periods. name="high tech 32"> Jenny Chan, the Research Team of SACOM, and Bread for All. May 2008. “High Tech – No Rights? A One Year Follow-up Report on Working Conditions in China’s Electronic Hardware Sector.” P. 32.</ref>

Human Rights

Miami resident Juan C. Arteaga initiated a class-action lawsuit against Dell Financial Services, LP, claiming the organization violated the Equal Credit Opportunity Act by denying credit to individuals based on their ethnic backgrounds. According to the complaint, Dell had confirmed Mr. Arteaga's credit application and had already applied his down payment for a new computer system when he was notified that the credit application was being denied because the company's verification department believed that Mr.Arteaga could not speak English and that a non-English speaker could not guarantee an account on the grounds that they may not understand the terms and conditions of the agreement. The case argues that despite Mr. Arteaga's impeccable credit, Dell made a judgment based on his accent and ethnic background. Dell's refusal to provide him credit is being referred to as a "clear and direct violation of the Equal Credit Opportunity Act." [23]

According to the Social Investment Research Analyst Network (SIRAN), ten years after the Federal Glass Ceiling Commission recommended disclosure of diversity data as a way to remove barriers and promote women and minority advancement, most US companies still fail to fully disclose Equal Employment Opportunity data to the public. Dell is listed as one of the companies that does not provide full public disclosure. Rather, full disclosure is only made available to the public upon request. [24]

Environment

Consumer Protection and Product Safety

Dell agreed to recall and replace 4.1 million of its laptop computer batteries made by Sony due to a glitch that can cause the batteries to burst into flames. The faulty Sony batteries were installed in notebooks that were shipped between April 1, 2004, and July 18, 2006. Dell spokesman Ira Williams stated, "In rare cases, a short-circuit could cause the battery to overheat, causing a risk of smoke and/or fire...It happens in rare cases, but we opted to take this broad action immediately." [25]

Anti-Trust and Tax Practices

According to the North Carolina Institute for Constitutional Law (NCICL), Dell used unfair bargaining tactics to win $242 million in tax credits from the state government and an additional $37.2 million in local subsidies from city counsels in 2004. In the interest of creating more jobs, the state government made a generous deal with Dell involving perks such as a $15 per unit tax credit on every computer and consumer device produced in 2006, requiring local community colleges to create a Dell specific training program, and allowing $10,000 per year tuition deduction for Dell employees at Wake Forest University. In exchange, Dell was asked to meet limited constraints including covering some worker healthcare costs and not firing half of the plant's employees before an agreed upon date. [26]

The Securities and Exchange Commission (SEC) began a formal investigation of Dell’s accounting and financial reporting matters. In August 2006, Dell revealed that the SEC was conducting an informal investigation regarding its accounting practices, including revenue recognition and end-of-quarter policies. The SEC first gave Dell notice about accounting practices in August 2005. Dell postponed reporting its quarterly results due to the “level of complexity” the company now faces with the SEC. [27]

Social Responsibility Initiatives

According to SACOM report, "High Tech No Rights" May 2008: "DELL: SLOWING DOWN Commitment: Average Transparency: Average Dell has one employee who follows implementation of the code of conduct in China only 30% of the time. In 2007, the company organized two training seminars for its suppliers (the exact number of suppliers are not made public) and underwent 32 audits. But these steps are modest considering that it has already been four years since Dell committed to work on social responsibility in its production chain. Worse yet, Dell was condemned for “cutting and running” from Yonghong Electronics, the worst corporate response to labor rights violations in supplier factories. Regarding transparency, Dell refuses to make public its list of suppliers and to confirm supplier names. But the American company has made efforts to hold dialogues with labor rights non-governmental groups."[28]

Business Scope

Lines of Business and Major Products Paragraph Units/Subsidiaries


Customers Suppliers Creditors Competitors
Customer 1 Supplier 1 Creditor 1 Competitor 1
Customer 2 Supplier 2 Creditor 2 Competitor 2
Customer 3 Supplier 3 Creditor 3 Competitor 3
Customer 4 Supplier 4 Creditor 4 Competitor 4


Financial Information (2008)

Ticker Symbol:DELL
Main Exchanges:Nasdaq
Investor Website:http://www.dell.com/content/topics/global.aspx/about_dell/investors/main/investors?~ck=ln&c=us&l=en&lnki=0&s=corp

Shareholder % Total Shares held
Michael Dell 10.92%
SOUTHEASTERN ASSET MANAGEMENT, INC. 6.39%
Barclays Global Investors UK Holdings Ltd 3.84%
STATE STREET CORPORATION 3.77%
PRICE (T.ROWE) ASSOCIATES INC 3.35%
VANGUARD GROUP, INC. (THE) 3.28%

Largest Shareholders[29]


Dell Worldwide Website

Country Revenue Profits Assets Employees
USA Revenue 1 Profit 1 Assets 1 Employees 1
Canada Revenue 2 Profit 2 Assets 2 Employees 2
Mexico Revenue 3 Profit 3 Assets 3 Employees 3
Brazil Revenue 4 Profit 4 Assets 4 Employees 4
Panama Revenue 4 Profit 4 Assets 4 Employees 4
UK Revenue 4 Profit 4 Assets 4 Employees 4
Ireland Revenue 4 Profit 4 Assets 4 Employees 4
Germany Revenue 4 Profit 4 Assets 4 Employees 4
France Revenue 4 Profit 4 Assets 4 Employees 4
Singapore Revenue 4 Profit 4 Assets 4 Employees 4
Japan Revenue 4 Profit 4 Assets 4 Employees 4
India Revenue 4 Profit 4 Assets 4 Employees 4
China Revenue 4 Profit 4 Assets 4 Employees 4
Malaysia Revenue 4 Profit 4 Assets 4 Employees 4
Taiwan Revenue 4 Profit 4 Assets 4 Employees 4
Austrailia Revenue 4 Profit 4 Assets 4 Employees 4

Governance

Key executives and 2006 pay: [30]          Options
exercised
Michael S. Dell, Founder, Chairman and Chief Executive Officer    $2,760,000    $149,470,000
Donald J. Carty, Vice Chairman and Chief Financial Officer    N/A    N/A
Paul D. Bell, Senior Vice President    $1,070,000    $0
Rosendo G. Parra, Senior Vice President    $1,070,000    $5,640,000
Kevin Rollins, Advisor    $2,740,000    $0

In 2006, Kevin B. Rollins, Dell's Chief Executive Officer, made $9.07 million in total compensation including stock option grants from Dell Inc. From previous' years, Rollins has another $106.07 million in unexercised stock options. [31]

Contact Information

One Dell Way
Round Rock, TX 78682
Phone: 512-338-4400
Fax: 512-283-6161
Web: http://www.dell.com

Articles and Resources

Books on the Company

  • Michael Dell and Catherine Friedman, Direct from Dell: Strategies that Revolutionized an Industry. New York: HarperCollins Publishers, 1999.
  • Steve Holzner, How Dell Does It: Using Speed and Innovation to Achieve Extraordinary Results. New York: McGraw-Hill, 2006.

Related SourceWatch Articles

External Resources

  • Jenny Chan, the Research Team of Students and Scholars Against Corporate Misbehavior

(SACOM) and Chantal Peyer (Bread for All) "High Tech No Rights?" May 2008.

External Articles

References

  1. 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 Yahoo! Finance accessed July 2008
  2. Dell Profile, Hoovers, accessed August 2007.
  3. American Legislative Exchange Council, "Education Task Force Meeting," agenda and meeting materials, August 5, 2011, on file with CMD
  4. Brendan Fischer, Dude, You're Getting Dumped: Dell Computers is 20th Corporation to Dump ALEC, PRWatch.org, June 21, 2012
  5. Marc Fisher, "Air America, in the Throes of Victory?", The Washington Post, December 10, 2006.
  6. "Air America on Ad Blacklist?", FAIR, October 31, 2006.
  7. "Air America Blackout", FAIR.org/ABC memo, October 25, 2006.
  8. 2006 PAC Summary Data, Open Secrets, accessed August 2007.
  9. Center for Responsive Politics
  10. Dell lobbying expenses, Open Secrets.
  11. [http://www.contractormisconduct.org/index.cfm/1,73,222,html?CaseID=705 "Dell, Inc.: International Contract Dispute", Federal Contractor Misconduct Database, July 2, 2007.
  12. "Apple Launches China Labor Probe" Associated Press, June 16, 2006.
  13. Jenny Chan, the Research Team of Students and Scholars Against Corporate Misbehavior (SACOM) and Chantal Peyer (Bread for All). “High Tech – No Rights? A One Year Follow Up Report on Working Conditions in China’s Electronic Hardware Sector.” May 2008. p. 10.
  14. Jenny Chan, the Research Team of Students and Scholars Against Corporate Misbehavior (SACOM) and Chantal Peyer (Bread for All). “High Tech – No Rights? A One Year Follow Up Report on Working Conditions in China’s Electronic Hardware Sector.” May 2008. p. 27.
  15. Jenny Chan, the Research Team of Students and Scholars Against Corporate Misbehavior (SACOM) and Chantal Peyer (Bread for All). “High Tech – No Rights? A One Year Follow Up Report on Working Conditions in China’s Electronic Hardware Sector.” May 2008. p. 28.
  16. Jenny Chan, the Research Team of Students and Scholars Against Corporate Misbehavior (SACOM) and Chantal Peyer (Bread for All). “High Tech – No Rights? A One Year Follow Up Report on Working Conditions in China’s Electronic Hardware Sector.” May 2008. p. 28.
  17. Jenny Chan, the Research Team of Students and Scholars Against Corporate Misbehavior (SACOM) and Chantal Peyer (Bread for All). “High Tech – No Rights? A One Year Follow Up Report on Working Conditions in China’s Electronic Hardware Sector.” May 2008. p. 28.
  18. Jenny Chan, the Research Team of Students and Scholars Against Corporate Misbehavior (SACOM) and Chantal Peyer (Bread for All). “High Tech – No Rights? A One Year Follow Up Report on Working Conditions in China’s Electronic Hardware Sector.” May 2008. p. 28.
  19. Jenny Chan, the Research Team of Students and Scholars Against Corporate Misbehavior (SACOM) and Chantal Peyer (Bread for All). “High Tech – No Rights? A One Year Follow Up Report on Working Conditions in China’s Electronic Hardware Sector.” May 2008. p. 28.
  20. Jenny Chan, the Research Team of SACOM, and Bread for All. May 2008. "High Tech - No Rights? A One Year Follow-Up Report on Working Conditions in China's Electronic Hardware Sector." p. 10 & 16
  21. 21.0 21.1 Jenny Chan, the Research Team of SACOM, and Bread for All. May 2008. “High Tech – No Rights? A One Year Follow-up Report on Working Conditions in China’s Electronic Hardware Sector.” P. 30.
  22. 22.0 22.1 22.2 Jenny Chan, the Research Team of SACOM, and Bread for All. May 2008. “High Tech – No Rights? A One Year Follow-up Report on Working Conditions in China’s Electronic Hardware Sector.” P. 31.
  23. [http://search.dailybusinessreview.com/sp?eId=100&gcId=397535&rNum=6&url=http%3A%2F%2Fwww.dailybusinessreview.com%2Fnews.html%3Fnews_id%3D38710&siteIdType=2 Daily Business Review, "Class Action," May 9, 2006.
  24. "EEO Project", Social Investment Research Analyst Network (SIRAN), December 7, 2005.
  25. Associated Press, "Dell to Recall 4 Million Batteries", 8/14/06
  26. The Register, 06/23/2005
  27. BBC News, "Regulators Step up Dell Inquiry," 11/17/2006
  28. Jenny Chan, the Research Team of Students and Scholars Against Corporate Misbehavior (SACOM) and Chantal Peyer (Bread for All). May 2008. "High Tech No Rights?"
  29. Yahoo! Finance
  30. Dell Key Executives, Yahoo Finance, accessed October 2007.
  31. AFL-CIO, 04/05/2006