Dell ditching computer factories

 

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By Reuters

Posted on 5 Sep 2008 at 11:49

Dell is aiming to sell the majority of its computer factories within the next eighteen months, as it attempts to cut costs.

According to reports in the Wall Street Journal, Dell has been approaching contract computer manufacturers in Asia with offers to sell the plants.

However, the company has reportedly encountered a number of obstacles in selling its plants, with contract manufacturers hesitant to buy factories in places with high labour costs, such as the US.

A number of facilities are also 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.

Contract manufacturers can generally produce computers for less money because their entire operations are narrowly focused on finding efficiencies in manufacturing, as opposed to large firms like Dell, which must balance marketing and other considerations.

No one was available at Dell for immediate comment.