News-Record.com

WINSTON-SALEM (MCT) — Dell Inc. might sell some or all of its manufacturing plants, including the one it opened in October 2005 in Forsyth County, as part of its intensified effort to cut expenses, the Wall Street Journal reported today.

Dell reported Aug. 28 that it had a 17 percent decrease in net income to $616 million in the second quarter, primarily due to lower prices and restructuring charges. Dell also said at that time it had cut 8,500 of the 8,900 jobs it had planned to eliminate as part of its consolidation effort.

Dell officials could not be reached for immediate comment.

The article said that Dell has talked with computer manufacturers in Asia that could either buy the plants or operate them for Dell on a contract basis.

The Wall Street Journal reported that Dell is considering radically altering its quick-ship, made-to-order strategy because it is considered no longer as competitive. Dell announced in March that it was closing a desktop computer plant in Austin, Texas, which will eliminate 900 jobs.

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, according to the Wall Street Journal article. Other factories could close, the source said, and Dell might contract with other manufacturers to make its computers. The newspaper did not identify its source.

Dell has about 1,150 employees at the Forsyth plant where it assembles desktop computers for business and individual customers. That work force that has been relatively stable for close to 1 1/2 years.

It is unclear how the sale or outsourcing of Dell's manufacturing operations would affect the $37 million in local incentives and up to $268 million in state incentives that it is eligible to receive for building the plant in Forsyth.

Analysts have said that Dell could face several obstacles to selling or outsourcing its plants, including its incentive deals with local and state governments in the United States. Absorbing higher labor costs in the United States also could be a disincentive to Asian manufacturers.