Dell slams IBM-Lenovo deal

Speaking before reports of IBM is to sell its PC business unit to China's Lenovo Group were confirmed Dell founder and cheif...

Speaking before reports of IBM is to sell its PC business unit to China's Lenovo Group were confirmed Dell founder and cheif executive said that his company's US facilities give them an edge against other North American suppliers.

In an industry largely seen to be in the midst of consolidation, Dell has avoided making acquisitions, largely because the company's founder views this as a "healthier and more sustainable" way to grow, he told attendees at the OpenWorld conference.

"When was the last time you saw a successful merger or acquisition in the computer industry? It hasn't happened, at least not in a long, long time," Dell said.

Although Dell posted record numbers during its most recent financial results, the company's two largest competitors Hewlett-Packard and IBM - have struggled to turn a profit selling personal computers.

Dell attributed his competitors' problems to outsourcing.

"It's been a long time since our leading competitors actually made a computer," he said. "They have outsourced manufacturing computers a long time ago, but Dell continues to invest heavily in the manufacturing and design of computers."

Last month, Dell announced plans to open a third US manufacturing facility in North Carolina. The company already has US manufacturing operations in Austin, Texas, and Lebanon, Tennessee.

Moving facilities offshore may have seemed appealing during the industry-wide sales slump of the last few years, but it has left some companies at a disadvantage as demand picks up again, Dell said.

Dell has some first-hand experience in the problems that can accompany offshoring. A year ago the company moved customer support operations for its Optiplex desktops and Latitude notebooks back to the US after corporate customers complained about the quality of service they were receiving from international facilities.

Dell, however, does have a number of manufacturing facilities located outside the US, including factories in Ireland, Malaysia, China and Brazil.

Robert McMillan writes for IDG News Service

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