Dell may need 2nd factory in U.S.
(from Austin American-Statesman, Thursday, October 22, 1998, page D1)
Official: Keeping up with growth key for continued success
by Kirk Ladendorf American-Statesman Staff
Dell Computer Corp. probably will build another manufacturing center in the United States to handle its fast growth, the company's vice chairman said Wednesday.
There are no immediate plans to do so, said Mort Topfer, one of the company's top three executives, but if the company maintains its growth rate, another location will be needed.
It will keep its headquarters in Central ETexas, where the company was founded and has grown into a $14 billion personal computer company. It has 13,500 employees in its Round Rock and Austin operations.
"We will never leave this area," Topfer said. "We will never move our headquarters.
"A lot of our future expansion here is dependent on the ability of the area to support the growth. I do think that sometime in the future we will have a second campus in the U.S."
There has been concern that Austin would not be able to provide enough workers for Dell as it continues to grow. The company added 2,000 employees to its Austin work force during its second quarter that ended in July.
Topfer made his comments in response to a question during a meeting with Austin American-Statesman reporters and editors.
He also talked about the challenges for hiring, the company's perspective on the world economy and national economy.
Here is an edited portion of the interview. More of the session will be printed in the next Tech Monday [poster's note: Oct 29].
Q: Dell has added employees at an extraordinary rate. What challenges does that growth pose?
A: We added 2,900 people worldwide in the second qurter (ended in July) with about 2,000 of them in the Austin area. It's very challenging. The fact is, no company has ever grown by 50 perecent in sales (Dell's sales grew by 52.8 percent in the first half of the current fiscal year) when they are our size. We have been very focused on buillding the infrastructure to be able to sustain the growth.
We are a very people-driven kind of company. And we need to continue to hire people, which is our basic core asset, if we are going to continue to drive the growth. And with a 9 percent worldwide market share, we are very optimistic about our ability to continue to grow. We meet with the board of directors every few months. They ask us, "What are your challenges and concerns?" We say it's people, hiring and training them and not lowering the quality. You can always hire a lot of people. The difficulty is not lowering the quality.
Q: How many people do you expect to hire next year?
A: If we continue to grow at this pace, it will be similar to the number that we hired in the past year. We hired 7,500 people worldwide over the last 12 months. That is a very significant number of people.
Q: What are you watching in the world economy?
A: We watch a lot of economic information. There is a great concern about Asia-Pacific, specifically Japan. Japan is a very big influence on the entire region, including China. When the yen was going to 160 (to the U.S. dollar) there was a lot of concern about possible devaluation. I think those fears have kind of gone away. We are very focused on Brazil's economy since we are moving in there. When you have a 1 percent share (in several emerging markets) we think you are isolated from the economic conditions. In difficult times, our price/performance advantages make us an even more attractive supplier.
While our growth has slowed in the Asia-Pacific region from 75 percent (a year ago) to 35 percent (this year), we are sill growing at a very rapid rate relative to the market growth. Our value proposition gets more attractive in difficult economic times.
Q: Do you see a U.S. recession in the next year?
A: No, we don't. We really believe the PC industry will continue to grow on the order of 17 percent (for units sold) for the next two or three years, which is historically where it has been.
I think the economy is strong. It will remain strong. We don't see any recession. We are not planning for any recession next year. The recent moves by the Fed (Federal Reserve Board) have strengthened that view.
[poster's note: please excuse any typos I may have introduced in retyping this article.] |
