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[Gene GeRue <genegerue AT ruralize.com>]

Who's Afraid of China?
By GARY RIVLIN

Published: December 19, 2004

Austin, Tex.
SHAYNE MYHAND, the day-shift manager of Dell's flagship factory here, does 
a lot of chaperoning. As many as four or five times a day, he finds himself 
playing host to corporate chieftains and midlevel scouts who come to marvel 
at the dazzlingly efficient assembly plant that may be the best hope for 
keeping blue-collar jobs in the United States.
A 31-year-old with a crisp, militarylike bearing, Mr. Myhand begins each 
tour the same way, moving to a display case and grabbing an unimpressive 
wooden plaque commemorating Dell's production of 49,269 personal computers 
in the last three months of 1991. "On a good day, during peak demand, we'll 
exceed that number by lunchtime," he said, with a slight nod and a faint 
smile gracing his lips. He told a visitor that even now, during the 
Christmas season rush, an order that hits the factory floor at 9 a.m. is 
typically stacked in the back of a truck motoring down an interstate 
highway by 1 p.m.
Inside Dell, the world's largest computer maker, executives study the 
assembly process with the intensity of Alfred Kinsey and his researchers. 
They wheel in video equipment to examine a work team's every movement, 
looking for any extraneous bends or wasted twists. Designers give one 
another high-fives for eliminating even a single screw from a product, 
because that represents a saving of roughly four seconds per machine built 
- the time they've calculated it takes an employee, on average, to use the 
pneumatic screwdriver dangling above his or her head.
Computer software clocks the assembly-line performance of workers, whether 
they're putting together PC's or the servers and storage equipment that 
Dell sells to large companies. The most able are declared "master builders" 
and then videotaped so that others may watch and learn. The weak are told 
that it takes a special set of talents to cut it on the Dell factory floor 
- and shown the door.
Steely-eyed cold, to be sure, but at a time when economists and politicians 
fret over the future of American manufacturing as China emerges as the 
workshop of the world, Dell isn't just defying a global trend; it's helping 
to set the standard. "When everybody is outsourcing - when everybody is 
outsourcing - Dell continues to manufacture in the United States because 
over two decades of fine-tuning, they've figured out how to do it cheaper 
and smarter," said Charles R. Wolf, an analyst at Needham & Company who has 
been following Dell since 1991. (He has also been reaping the financial 
rewards as a longtime Dell shareholder, seeing a 33-fold return on his 
investment.) "They're truly in the 21st century when it comes to 
manufacturing."
No other major computer maker produces computers in the United States. Long 
ago, Dell's top rival, Hewlett-Packard, outsourced assembly of its PC's to 
third parties, primarily based in Asia, as did I.B.M., the world's 
third-largest PC maker. And I.B.M., which created the PC market in 1981, is 
leaving the business, announcing this month that it is selling its PC unit 
to Lenovo, the Chinese computer giant. "It's been a long time since one of 
our competitors actually made a computer," said Michael S. Dell, the 
founder and chairman of the company that bears his name.
Dell, by contrast, operates three giant assembly plants in the United 
States - two in Austin and the third outside Nashville. Each is large 
enough to house six contiguous football fields. Last month, the company 
announced that it would build a fourth plant, twice as big as the others, 
near Winston-Salem, N.C. And, inside the company, executives talk about 
opening a fifth one, probably in Nevada, where it would build computers 
according to each customer's specifications. At a White House conference on 
the economy on Wednesday, Kevin D. Rollins, Dell's chief executive, 
boasted, not quite accurately, that all the computers the company sells 
domestically are made right here in the United States. "None is outsourced; 
none is made in other countries and shipped in," he said, though Dell 
laptops are in fact assembled overseas.
Dell's decision to expand its American manufacturing presence, however, has 
nothing to do with patriotism. Executives here say their decisions are 
based on the bottom line as well as on geography; it is simply more 
efficient to stamp out computer equipment closer to the customer. "The 
reason we continue to manufacture in the United States is that

The rest of the article is at:
http://www.nytimes.com/2004/12/19/business/yourmoney/19dell.html