Released documents from a lawsuit reveal questionable business ethics at Dell.In 2005 it was widely known that several major computer vendors, including Apple, Dell and HP, had problems with faulty capacitors on motherboards for desktop PCs. The problem was also board supplied directly by Intel. In November 2005, HP said that the faulty capacitors were supplied by the major Japanese manufacturer Nichicon (see Cnet article PCs plagued by bad Capacitors).
Dell was probably hardest hit by the faulty capacitors: In November 2005, recorded an extraordinary expenditure of $ 300,000,000 to cover the costs of replacing the motherboard for desktop PCs on the type Optiplex GX270 and GX280.
The defective capacitors were apt to bulge and leak fluid over the PCB and surrounding components. Leaks could lead to a series of serious problems and put PCs completely out of the game.
In 2007, the U.S. net provider Advanced Internet Technologies (AIT) to the case against Dell. AIT claimed that Dell had refused to take responsibility for the failure of the 2000 computers they had purchased, and that triggered the loss of millions of dollars.
Key Documents in this lawsuit so far has been withheld from the public, was recently released. The newspaper New York Times has plowed through these documents. The minutes of their leaves Dell small honor.
The point is that Dell does not recalled Optiplex PC's with faulty capacitors, but continued to sell them, knowing that they would fail.
Dell hired the independent expertise to assess the extent of the problem. The expert report is the most revealing of the newly released documents. It proved that the probability that the main cards with the faulty capacitors would collapse was far greater than Dell's own estimates, up 97 percent over a three year period.
Despite this, Dell sold in the period May 2003 to July 2005, 11.8 million Optiplex PCs with motherboard controlled by defective capacitors.
The expert report also states that sales and support departments to the Dell did what they could to cover up the problems.
Support People were told they had to avoid mentioning problems related to the motherboard. Sales people were warned that they should avoid talking about any problems. Customers complained about the machines, which had replaced the computer's motherboard, got to the new motherboard with the same faulty capacitors.
Customers who complained were somewhat fanciful explanations. AIT was told that they had driven PCs too hard and used them in the hot areas. Department of Mathematics at the University of Texas was told that the PCs had been overwhelmed by difficult mathematical calculations.
Dell was not only generally unwilling to discuss the problems. In some cases they have been unwilling to fix them. It was partly the case with law firm Alston & Bird is now defending Dell in action from the AIT: The perceived failure of the 1000 computers, and experienced false willingness from Dell, according to an e-mail exchanges that are among the newly released documents in the lawsuit.
On the other hand, detects documents that Dell, after receiving complaints and handy to replace the motherboard, also extended warranty.
A problem for Dell is that the error was caused by defective capacitors, often explained with very different reasons. This entails a risk that other problems customers launch the same type of action AIT.
A critical point in the AIT lawsuit is about whether the computer problems led to valuable information was lost for the customers. AIT claim it. Dell denies it.
Neither the AIT or Dell would comment on the ongoing lawsuit against the newspaper.
