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Dell to sell its factories to cut costs

Posted on Friday, September 05 2008 @ 22:46:53 CEST by


Wall Street Journal claims Dell is trying to sell its computer factories to cut costs.
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.

The plan is the latest sign of changes in the global PC business, and the increasing pressure on Dell to improve its profitability. 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. Dell, which led the industry in lean manufacturing approaches and build-to-order PC manufacturing, now finds itself lagging rivals in wringing the most savings by outsourcing operations to production partners.

Any factory sales are contingent on Dell finding buyers. The most likely candidates are big contract manufacturers -- most of which are based in Asia -- that may hope to get a bigger piece of Dell's business. A company that purchases a Dell factory would likely be contracted to continue making computers there for Dell, said one person with knowledge of the talks.



 



 

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