Dell plots worldwide factory sell-off

Outsource to compete

By Chris Williams • Get more from this author

Posted in IT Channel, 5th September 2008 08:56 GMT

Dell is trying to offload ownership of its factories worldwide as part of an overhaul of its production strategy, reports say.

The one-time PC champ has been in negotiations with major contract manufacturers and expects to flog most or all of its facilities "within the next 18 months", according to the Wall Street Journal. Dell's end-to-end ownership of design, manufacture, sales and distribution - once its key advantage over rivals - has become a burden as the main market growth area has switched from corporate desktops to consumer laptops.

The factory buyers would continue to build Dell machines on the sites. The plan is that by selling to the enormous Chinese groups that now make the vast majority of the world's computers Dell can improve its profitability, which has suffered recently.

Last week, the firm disappointed investors by reporting quarterly profits down 17 per cent despite rising revenues.

Dell doesn't have any manufacturing in the UK, but opened its third Irish site in 1998. It could struggle to sell factories in developed countries to contract builders who rely on low Asian labour costs.

Earlier this year Dell closed one of its Texan factories. ®

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