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Lawsuit Shows Dell Hid Extent of Computer Flaws 272

Geoffrey.landis writes "According to an article in the New York Times, documents revealed in a lawsuit against Dell show that the computer maker hid the extent of possible damages due to a faulty capacitor in the computers it shipped from 2003 to 2005. Dell employees were told, 'Don't bring this to customer's attention proactively,' and 'emphasize uncertainty.' (PDF) 'As it tried to deal with the mounting issues, Dell began ranking customers by importance, putting first those who might move their accounts to another PC maker, followed by those who might curtail sales and giving the lowest priority to those who were bothered but still willing to stick with Dell.' In other words, the most loyal customers got the worst treatment."
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Lawsuit Shows Dell Hid Extent of Computer Flaws

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  • Re:Ha (Score:5, Interesting)

    by Monkeedude1212 ( 1560403 ) on Friday November 19, 2010 @04:10PM (#34284970) Journal

    This will surprise precisely no one who's ever done business with Dell.

    No kidding.

    I call in for a Warranty covered Repair. Why are they trying to upsell me speakers?

  • by RocketRabbit ( 830691 ) on Friday November 19, 2010 @04:24PM (#34285146)

    The US Federal Government buys more Dell machines than any other major customer. And Dell sucks, really really hard.

    Sure, their server hardware is OK, but it's just off the shelf stuff which is more expensive than a lot of competition, including the superb Supermicro. So, the only conclusion is that Dell has employees that suck a really good dick.

    Now this comes out. I wonder what the total damage done to the taxpayer was? Probably in the hundreds of millions when you figure in the lack of services caused by downtime, contractor handoffs of parts before they actually get the problem fixed, and subsequent testing which is mandated at many facilities.

  • by Constantin ( 765902 ) on Friday November 19, 2010 @04:42PM (#34285352)

    Dell may have been more customer-antagonistic than other manufacturers, but even alleged luminaries in the business were tainted by this issue.

    My first Apple base station was based on a Lucent design that Apple put a graphite-colored plastic enclosure around. Naturally, the Job/Ivs-ian approach to mechanical design did not allow these base stations to have ventilation holes in them, even though they had a comparatively big internal linear power supply and were using a 486 chip. Combine that with all the remaining hardware and you had a nice hot little box, especially if you used the dial-up modem. A year later, and the marginal Lelon capacitors powering the the base station started bulging like Champagne corks or popping off altogether.

    Naturally, Apple told its customers that the they were SOL if the unit was out of warranty after a year of ownership. Those who had AppleCare warranty could get refurbished units - usually in marginal cosmetic condition - and only if they mentioned that AppleCare covered attached peripherals. Apple never proactively contacted owners of graphite base stations to acknowledge the issue and to point owners towards repair options.

    I got mad enough to investigate the issue, discovered the bad capacitors and created a web-page to teach others how to replace them or have service providers replace the capacitors for them. Not that hard to do. I also gave folk instructions on how to add ventilation holes to help these poor base stations cool better. The Lucent design covered much of the board with an EMI shield, which exacerbated the thermal problems - it's like encasing the electronics inside two heat shields.

    As the issue affected more and more customers, Apple started a non-publicized warranty program that allowed customers outside the warranty period to get their unit replaced - but only if they knew what knowledge-base article to point the Apple drones to. Naturally, just as the program appeared one day, it also disappeared after a while - without a press release, notice to customers, etc.

    All along, the typical answer from an Apple phone-drone was that they had never heard of the issue before. So, if you did a little digging at Apple, I would not be surprised if the SOP manuals for phone-drones include the 'suggestion' that every issue reported by an irate customer is 'unusual', 'never heard of before', etc. It's one way to mollify customers, especially those who don't know of the myriad of other customers affected by the same issue.

    The only times I had Apple admit something outright was with the Santa Rosa graphics chipset problem, and probably only because by MacBookPro was covered under AppleCare. However, by then, a lot of of other folk had already been affected by this issue and NVIDIA was presumably paying for the PCB repairs. So I'm not sure if I can give Apple a pass on that one either. The first sets of customers were probably told that unless the unit was under warranty or AppleCare that they'd be buying a new motherboard and paying Apple for the privilege of getting it installed too.

    Would the base stations have lasted longer if Apple had elected to use name-brand capacitors instead of Lelons? Perhaps, but any electronic appliance last longer with lower operating temperatures. Sadly, this is an issue that seems to continue to haunt Apple - a desire to design pretty enclosures whose thermal performance is at the borderlines of what the electronic hardware can tolerate.

  • by Anonymous Coward on Friday November 19, 2010 @04:46PM (#34285390)

    Quite true, from my time working in staples, I can say it's pretty clear. Cheapest > best 95% of the time. No matter what I would say or do, I couldn't talk people out of buying the $300 machines during the horrific era when manufacturers were releasing vista on systems with 512MB of ram.

    "Yes the e-machine has windows vista, and is $300, but I have to warn you, the hardware on it is far to weak to run what they have installed on it. If you buy this machine, you can expect it to crash several times a day and everything to run painfully slow, now for 400 we have one with 2 gigs of ram on sale that will run much smoother and more reliably"
    customer: "Let me call my brother, he knows alot about computers, *calls*
    Customer: "He does agree with you, let me think about it"
    30 minutes later
    Customer: "Get me the cheap one"

    A manufacturer that actually made quality products would be going after a niche market of customers that did their research and have money, which would be at best maybe 5%. then cut that in half because half of those would probably be more likely to build thier own systems.

  • by Mad Leper ( 670146 ) on Friday November 19, 2010 @04:53PM (#34285490)

    We had almost 90% of our GX270 desktops (about 200 deployed at the time) fail due to the bad cap issue, and Dell Canada repaired every single one within 24 hours, no questions asked. Since then we’ve had near zero issues with any Dell laptops or desktops (over 1,000 deployed and in use), and the few failures we’ve had since then Dell has fixed without any hassle.

    Dell Canada never gave us a hard time over repairs for the bad cap problems. Whenever we placed a support call all it took was a mention of “blown caps” and they immediately sent over a tech & parts for onsite repair. By all accounts we were a “loyal customer” but certainly did not receive “the worst treatment”.

    Either Dell USA grossly mishandled the bad cap issue in their own backyard or there were a lot of Dell customers out there that didn’t arrange for proper support (by not purchasing through Dell Corporate) and purposely skimped on their warranties.

  • by characterZer0 ( 138196 ) on Friday November 19, 2010 @05:07PM (#34285672)

    I absolutely am not being facetious. Consumers buy too much stuff to be informed about all of the products and the companies behind them. Democracy has the exact same problem.

  • by thaylin ( 555395 ) on Friday November 19, 2010 @05:13PM (#34285722)
    I used to work as a systems administrator for the company suing dell, AIT, and to be honest from the setup we were required to use you could not tell whether the problem was because of dell or the high heat on the machines. The problem stems from the owner of the company's desire to cut costs anywhere he could. He stopped buying actual servers and went to buy desktops and sold dedicated hosting services on them as though they were servers. We would have groups of 3 pizza racks stacked with 12 of the VCR dells per shelve. The heat from all the machines was terrible, we even had plastic melting on some of the machines. To cool the system we had 2 used industrial ACs, that were always breaking, in addition we had 3 of the large stand up fans that really did no cooling at all. What is really ironic about this suit is that the company at the time advertised nightly backups on all accounts, however only about 1% of the customers, the ones on our netapp, was actually backed up. For the rest the company would not buy the hardware to actually backup customers.
  • by Trip6 ( 1184883 ) on Friday November 19, 2010 @07:08PM (#34286900)

    ...because this post is in response to those who espouse "the man fucked us over again" attitude you see a lot of here.

    Just for a minute, step outside your cubicle and put yourself in charge of Dell.

    First of all, you have no choice but to manufacture your laptops in China, Viet Nam, Malaysia or some other God-forsaken country because it takes a lot of labor to assemble your products, all your competitors do the same thing and people want a full featured laptop for $599. If you stamp a "Made in USA" sticker on the box and charge $899, a price at which you'd lose money if you built it here, your product sits on the store shelf like an old turd.

    Secondly, you have to source subcomponents like capacitors (or in the case of Mattel, paint for Barbies) from a network of vendors within the country you're building in. This sub-supplier network could go 3 or 4 or more companies deep by the time you get down to the raw materials used to make the parts.

    Of course you got samples, tested the shit out of them, and insisted that all the components and sub components come only from approved suppliers. You put in incoming QC tests to make sure the parts adhere to spec, but it simply isn't possible to test every single component every single time they come in. You've got ongoing WIP tests at every step of the way to make sure the subassemblies and end product stays in spec.

    Then some peasant in Northern China decides to send some bad raw materials used to make the capacitors used in the Dell (and other) machines up the stream to the capacitor factory. The factory making the caps has no idea the material is bad and the caps test out fine. They only fail over time so they pass any and all incoming QC tests your factory has put in place, and the end computer they go in tests out fine before shipment.

    Then you get the first return from the field. And then the second. After root cause analysis, you finally recognize that the capacitor is faulty, and basically you then say Holy Fucking Shit. Because the lead time to get the caps was 12 weeks, and by that time you've got 150,000 suspect machines in the field, another 150,000 in work in process, and another 150,000 worth of parts in the parts bins waiting to be assembled.

    You now have to figure out how and why machines fail, over what time span, and under what usage patterns. Will this thing burn down a customer's house!? How badly are you fucked in terms of warranty - how many machines will fail before the warranty is out, and what is the company's exposure? What about all the stuff in the supply chain - do you pay to have it reworked or do you deem the risk low enough that you continue to build and ship?

    Then, you start the customer triage process. Who are the most strategic customers that will have the most downside due to the failure? Do we do a proactive recall, or wait until machines fail and come back in? if we don't do a recall, do we alert the public or just wait and deal with the failures as they arrive and hope it doesn't get any worse?

    Of course, as part of this process, you've found the mother fucker in China who screwed you, had him shot, then put in tests to make sure this never happens again, and tried to get some sort of money out of the sub supplier to cover the millions you have at risk due to this problem. Good luck with that, by the way.

    Then some douche bag on Slashdot calls you a greedy pig for not replacing every machine without question.

    Welcome to the world of the manufacturer.

    And by the way, the above if GROSSLY simplified to enhance comprehension.

If graphics hackers are so smart, why can't they get the bugs out of fresh paint?