Dell Strategy Includes U.S. Presence

North Carolina plant is one of three new U.S. sites to answer increasing demand for PCs.

The next time someone complains about all the good U.S. manufacturing jobs moving overseas, be a contrarian and tell them about Dell Inc.'s new plant in Winston-Salem, N.C. The $47.3 billion computer manufacturer expects to employ 700 people in the first year of production at the 500,000 square-foot plant -- and 1,500 people within five years. An economic development group in the region says including suppliers to Dell and increased economic activity, 6,000 jobs will be created. The plant is expected to open this fall.

"Winston-Salem's Alliance Park location is best suited to bringing our new operation online in time to meet growing customer needs, providing good proximity to an available workforce and supporting our logistics objectives," Ro Parra, senior vice president and general manager of Dell Americas said last December, when the site choice was announced.

The plant is Dell's third manufacturing site in the U.S. The other two are in Austin, Texas, and Lebanon, Tenn. In 2004 the company announced it also will build a customer service center in Oklahoma for home and small business customers and a distribution center in Ohio to support its recently announced foray into printers and printer products.

Dell's global manufacturing strategy includes owning its own plants. With global demand for PCs on a solid upswing following several years of rapid decline, Dell -- which also has plants in Limerick, Ireland; Penang, Malaysia; Xiamen, China; and Eldorado do Sul, Brazil -- needs more capacity. According to a January report from International Data Corp. (IDC), shipments of PCs globally rose 14.7% in 2004 to 177.5 million units. Total shipments in 2004 were more than 26% better than in 2000, according to IDC. (The research firm says Dell has the largest share of the global PC market, followed by Hewlett-Packard.)

The resurgence in PC buying is good news for Winston-Salem. In the past 15 years, the community has lost hundreds of thousands of tobacco and textile production jobs. Winston-Salem is one of three anchor communities that have been dubbed "the Piedmont Triad" -- others are Greensboro and High Point -- in an effort to attract high-tech and medical manufacturing.

"This is a very exciting announcement for the Piedmont Triad region," Don Kirkman, president and CEO of the Piedmont Triad Partnership, said when the Dell plant was announced. "The fact that Dell chose the Triad for this project affirms our region's strategic location for advanced manufacturing and distribution companies serving East Coast markets."

Dell's Winston-Salem plant will produce PowerEdge servers, PowerVault and Dell/EMC products, and OptiPlex and Dimension desktop computers primarily for the U.S. market. Winston-Salem's distribution advantages played into the company's site choice.

"Our mid-Atlantic location provides access to nearly all major East Coast markets within a one-day truck haul," Kirkman said. "We are halfway between New York and Florida, Washington and Atlanta, and Charlotte and Raleigh. The I-85 corridor between Charlotte and Raleigh is rapidly growing . . . and the Triad sits in the middle of that urban corridor."

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