City Grills Dell

For The Nashville City Paper

The Metro Department of Finance is requesting that Dell Computer Corporation re-evaluate and resubmit the stated number of full-time employees the company uses to be eligible for nearly $1,000,000 of grant money from the city each year.

When Dell agreed to come to Nashville in 1999, the contract between Dell and the city included the city giving the corporation 150 acres of land valued at $6.5 million, 40 years of no taxes and $500 per person employed full time by Dell. In return, Dell agreed to provide the city with 1,995 full-time jobs.

However, a letter from Metro Finance Director David Manning to Dell Vice President Kip Thompson dated May 7 calls into question how the numbers have been calculated and the definitions the company uses in determining the calculations. The letter states: “There continues to be concern expressed to this office and through the media concerning whether the grant payments made by Metro to Dell could have included any full-time employees working through temporary employment agencies.”

Manning said because of how the contract was negotiated, the Department of Finance had no “explicit right” to look at Dell’s books or personnel files to determine the actual numbers.

“As you might imagine, auditing the books of Dell Computer Corporation would probably cost more than what we give them in a grant, so there are some practical limitations here as to what anyone could do,” said Manning. Manning said he did not have much concern about the issue as long as the certification came from an independent third party.

“I know that some have raised the question that they pay them, and I acknowledge that that’s a potential issue, but I still believe that is a reasonable way of reaching a determination in this matter,” Manning said adding that it was his aim to have the firm Dell uses to certify full-time employees, Price Waterhouse Coopers, be more explicit in what they are actually certifying.

Manning is requiring Dell to add “affirmative statements” to the submission of its Annual Settlement Statement that more clearly outlines the terms “Dell entity,” “Dell Nashville employee,” “exempt employee” and “Dell Nashville facility” as defined in Article 1.2 of the agreement.

“Specifically,” the addendum states, “no employees provided by Spherion or any other temporary staffing company are included in the calculation.” Applicants currently seeking employment with Dell cannot call or go to Dell directly; They must go through Spherion temporary agency and enter Dell’s full-time work force through temporary employment.

Some believe that Dell, though not breaking the letter of the law, broke the spirit of the law when it backed out of providing hi-tech manufacturing jobs and turned its Nashville facility into a shipping center. But it’s Dell’s position that the contract did not legally require manufacturing jobs. Manning is also requiring language that shows that Dell and/or the independent accounting firm is aware that there must be a clear delineation between how temporary employees and full-time employees are coded in Dell’s Department of Human Resources, effectively holding the accounting firm responsible for any misunderstanding.

Mark Drury, Dell’s spokesperson, said when Dell started operations in Nashville the company did the majority of hiring through Dell’s Human Resources Department but that the economy had slowed since then.

“We maintain a fairly constant level of temporary employees at Dell,” said Drury. “It gets larger and smaller depending on the peaks and valleys of our demand cycle. With the company’s employment in Tennessee having been fairly flat over the last year or so, essentially any time we’ve needed a position we needed to back fill, we’ve been able to go through the temporary work force.”

Drury said because the number of temporary employees fluctuated, he was not able to give an accurate figure for temporary employees.

“The company really has kind of taken on staying away from temporary numbers,” Drury maintained.

Albert Bender, a resident who has been vocally opposed to the agreement with Dell since the inceptions of the deal, said the city sold itself short in its frenzy to bring Dell to Nashville.

“It has meant a complete sellout of the resources for the city in terms of giving Dell unprecedented concessions that are extremely costly to the citizens of Nashville,” said Bender. “Manufacturing jobs would have softened the blow, but even with manufacturing jobs there were other parts of that contract that, specifically about them getting paid hundreds of thousands of dollars each year for their employees, should have been taken out.”

Manning said that the recertification should put the issue to rest.

“We do have an obligation to make sure it is being done right, but there are some folks who were against it and fought against it and they lost,” said Manning.

Dell Vice President Thompson could not be reached for comment.

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