NEW YORK – Dell Inc. (DELL) said Tuesday it plans to open a third U.S. manufacturing plant, based in North Carolina with 1,500 workers, in a rare example of a U.S. high-tech company expanding domestic production.
Dell, the world's largest personal computer maker, said the new desktop personal computer production plant will open in the Triad area (search) of central North Carolina in the fall of 2005.
The staff will grow from 700 workers in the first year to 1,500 within five years and supply PCs to eastern U.S. businesses and consumers, Dell said. Its other U.S. plants are in Tennessee and Austin, Texas, where the company is headquartered.
Dell is the only major U.S. computer maker to have U.S. manufacturing operations, though it also has four other production plants in Ireland, Malaysia, China and Brazil.
Its big rivals depend upon contract manufacturers mostly in Asia to build PCs and other electronic products at low cost.
While all U.S. computer makers depend on electronics components from Asia, Dell's strategy is to assemble PCs as close to customers as possible, arguing that logistical and distribution costs exceed U.S. labor costs.
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.
Dell Chief Executive Kevin Rollins said in a television interview that the company had yet to decide on a location in the region bounded by Greensboro, Winston-Salem and High Point, N.C., an area known as the Triad.
In a separate statement, North Carolina Gov. Mike Easley (search) said the new plant could generate up to 6,000 additional jobs for the region and pump net revenues of $743 million into the state economy over 20 years.
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. The tax credit will amount to up to $225 million over 15 years, Gov. Easley said.
Rollins also said the company has been benefiting from a corporate PC upgrade cycle over the past year.
Dell expects to continue gaining U.S. and global market share, he said ahead of the company's third-quarter earnings results due Thursday.
"We believe that the corporate market is fundamentally strong," Rollins said, reiterating its 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.