Dell Plans 3rd U.S. Plant, to Hire 1,500

Tue Nov 9, 2004
By Eric Auchard

NEW YORK (Reuters) - Dell Inc. (DELL.O: Quote, Profile, Research) plans to open a third U.S. manufacturing plant, the world's largest personal computer maker, said on Tuesday, in a rare example of a high-tech company expanding U.S. production.

Dell, the only major U.S. computer maker to have domestic manufacturing operations, said it will open its North Carolina plant in the fall of 2005, producing desktop PCs for eastern U.S. businesses and consumers.

The staff will grow from 700 workers in the first year to 1,500 within five years, Dell said.

North Carolina Gov. Mike Easley said the new plant could generate up to 6,000 jobs and pump net revenues of $743 million into the state economy over 20 years. A state tax credit to Dell will amount to up to $225 million over 15 years, he said.

Big U.S. high-tech companies depend on contract manufacturers, mostly in Asia, to build PCs and other electronic products at low cost.

While Dell also uses parts from Asia, it assembles PCs as close to customers as possible, counting on efficient logistics and distribution to offset higher U.S. labor costs.

Dell, based in Austin, Texas, already has plants there and in Tennessee. It has four other plants in Ireland, Malaysia, China and Brazil.

Dell had 22,200 U.S. workers in its latest fiscal year, 1,000 more than the prior year. It had 50,000 employees worldwide in July.

GROWING DOMESTICALLY, AND WORLDWIDE

Chief Executive Kevin Rollins said in a CNBC television interview that Dell had yet to decide on a location in the region bounded by Greensboro, Winston-Salem and High Point, North Carolina, an area known as the Triad.

The 500,000 square foot facility will cost about $60 million in the first year and receive tax credits from the state, a Dell spokesman said.

Rollins said Dell, scheduled to report third-quarter results on Thursday. has benefited from a corporate PC upgrade cycle over the past year. The company expects to keep gaining market share, he said. "We believe that the corporate market is fundamentally strong," Rollins said on CNBC, reiterating Dell's prior outlook.

This is the third U.S. facility Dell has announced this year. It recently opened a sales office serving home and small business customers in Oklahoma that will employ about 700 workers, company spokesman Mike Maher said.

Dell opened an order fulfillment and distribution center in Ohio that will employ 250 people. And it set up a 500-employee North American customer service center in Edmonton, Alberta.

Shares of Dell dipped 12 cents to $37.56 in afternoon trading on Nasdaq.

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