Beleaguered Dell puts box assembly factories up for sale worldwide in effort to slash costs

Beleaguered Windows PC box assembler Dell “is trying to sell its computer factories around the world, a move to sharply overhaul a production model that was long a hallmark of the PC giant’s strategy but is no longer competitive,” Justin Scheck reports for The Wall Street Journal.

“In recent months, according to people familiar with the matter, Dell has approached contract computer manufacturers with offers to sell the plants. One person briefed on the plan said he expects the company to sell most — and possibly all — of its factories ‘within the next 18 months.’ Other factories could close, this person said. Dell would enter into agreements with the contract manufacturers to produce its PCs,” Scheck reports.

“The Round Rock, Texas, company last week reported disappointing quarterly profit that helped send shares down more than 18%, and has been trying to reduce expenses since early last year,” Scheck reports.

“Dell could face several obstacles to selling its plants. Contract manufacturers may be hesitant to buy factories in places with high labor costs, like the U.S., said one person with knowledge of the talks. And some facilities could be encumbered by agreements with local governments. Dell’s North Carolina plant, for example, received several million dollars of state and local tax incentives that are contingent on the factory meeting certain employment and local-investment goals by 2015,” Scheck reports.

Full article here.

[Thanks to MacDailyNews Readers “Luis E.” and “John M.” for the heads up.]

54 Comments

  1. Quit waiting for the tipping point, because Apple is definately pouring out of the kettle now. One shoots up and everyone else levels off, or goes broke. Amazing.

  2. Maybe Apple could buy one of these factories to make the butt load of multi-touch devices that will be flooding the market by 2010.

    But it would irk that component-whore Michael Dell to cash a check signed by Steve Jobs (but we all know he’d cash it).

  3. Dell’s deal with North Carolina involved concessions worth a lot more than a ‘few million” dollars. Sounds like Michael owes the people of NC a lot of money.

    Indeed, it would be nice to be present as the Dell logo was removed and the Apple logo went up on that facility. Unfortunately, Apple is too wedded to the high margins that come with production in China.

  4. Who cares.

    Dell is not much different from Staples or those companies that print your corporate logo on pens and mouse pads. Some other company will emerge to take Dell’s place in the world of commodity office tools.

    Dell is DEAD.

  5. Interesting you don’t hear a word out of Mr. Dell. He was a real BIG MOUTH before with his wise cracks about how Steve Jobs should put Apple out of business, that they have nothing left.

    Looks like Mr. Dell should put his foot in his BIG MOUTH NOW!!!!
    How does that shoe taste Michael? ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

    And you can blame Microsoft and Windows Vista as the big failure to add to your failure. Of course you can’t leave OSX out either.

  6. @John

    “Looks like Mr. Dell should put his foot in his BIG MOUTH NOW!!!!
    How does that shoe taste Michael?”

    I wonder if he’s tasting the new shoes that Bill Gates is wearing courtesy of Jerry Sienfeld?

  7. You have to admit, though, it is very sad to see that all of those jobs once again will be outsourced to China and American workers will be heading for the unemployment line. We can’t go on like this forever.

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