Dell’s Deceptive Genius

Let us now sing the praises of Round Rock-based 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.

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.

But—oops—turns out that Michael’s genius has a few unsightly hickeys 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,’ ” said one internal email. “Don’t bring this to customers’ attention proactively,” instructed another Dell document.

The company even tried to shaft the law firm it hired to defend it against aggrieved customers, balking at 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. But should we really entrust our public business to this kind of corporate ingenuity?

 

Find more information on Jim Hightower’s work–and subscribe to his award-winning monthly newsletter, The Hightower Lowdown–at www.jimhightower.com