In a bid to reduce its costs, Dell, the world’s second largest maker of personal computers, plans to sell its PC manufacturing factories in the U.S. The firm intends to outsource production of its desktop personal computers to contract manufacturers that are located in regions like in South-East Asia, where labor costs less than in Europe or the USA.
According to the Wall Street Journal, Dell plans to either sell of close down its own factories within the next 18 months and then approach contract manufacturers to produce Dell-branded desktops. The majority of Dell’s notebooks are already made by contract makers, such as Quanta, but desktop PCs from Dell are usually built according to orders of customers on the company’s own factories.
The company owns factories in Texas, Tennessee, North Carolina, Florida, Ireland, India, China, Brazil, Malaysia and Lodz, Poland, where it opened a plant early last year, the WSJ reports. Outsourcing production to contract makers like Flextronics or Foxconn would cut manufacturing costs of Dell.
It is not clear how Dell plans to continue with its built-to-order strategy when all of its desktops are made by contract manufacturers. It is likely that the company will try to ensure that its manufacturing capacities in the U.S. are sold to a maker, who would agree to build systems according to Dell’s orders as soon as possible.
But it will hardly be easy to sell factories to contract makers in the USA, as high labor costs have already made contract makers to leave the country in order to produce products in countries with considerably lower costs of labor.
Dell did not comment on the report, however, it said that the company does have plans to reduce its manufacturing costs.