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Court documents suggest Dell mishandled capacitor plague

Cyril Kowaliski
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Remember the capacitor plague early last decade? You know, when capacitors on motherboards spontaneously began bulging and leaking, causing PCs to die like so many medieval peasants? As the New York Times reports, court documents from a subsequent lawsuit against Dell have now become public, and they show evidence of Dell both mishandling the crisis and misleading customers. Juicy stuff, even if the lawsuit is three years old at this point.

According to the Times’ coverage, Dell suffered from the capacitor plague more than others, shipping "at least 11.8 million computers" with potentially faulty components between May 2003 and July 2005. Worse still, 97% of affected Dell OptiPlex systems were "expected to cause problems . . . over a three-year period." Nevertheless, Dell attempted to play it cool:

In one e-mail exchange between Dell customer support employees concerning computers at the Simpson Thacher & Bartlett law firm, a Dell worker states, "We need to avoid all language indicating the boards were bad or had ‘issues’ per our discussion this morning." . . . In other documents about how to handle questions around the faulty OptiPlex systems, Dell salespeople were told, "Don’t bring this to customer’s attention proactively" and "Emphasize uncertainty."

The PC maker did write off a $300 million charge to cover replacement costs, and it did extend the warranty of affected systems. However, the firm stopped short of issuing a recall, and it allegedly wasn’t cooperative when customers called in to complain. The Times cites one example: AIT, an "Internet services company," which Dell purportedly accused of causing its PCs to fail by running them in hot, cramped environments. Dell’s solution? Try to sell AIT "more expensive computers." In cases where Dell actually did issue replacements, word is that faulty motherboards were sometimes replaced with other boards that had the same failure-prone capacitors.

The lawsuit hasn’t gone to trial yet, and Dell isn’t commenting publicly, so that’s pretty much it as far as juicy details go. (Well, the full article has a few more nuggets here and there.) Interestingly, though, the Times suggests Dell’s poor crisis management is one of the reasons the firm is falling behind competitors like HP and Acer these days. The author of the piece hints that Dell’s glory days as a role model for other businesses might be behind it.

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