Dell closing in on plans for new U.S. plant?

North Carolina legislators are to discuss a proposed package of incentives for the PC maker during a session set for Thursday. Photos: Inside Dell's Austin assembly plant

Dell is moving closer to announcing plans to build a new factory in the United States.

As previously reported, the Round Rock, Texas, PC maker is indeed eyeing a spot in North Carolina for a plant that would serve its Americas business, according to David Frink, a Dell spokesman.

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"We're obviously looking at North Carolina, and we've previously announced we're intent on building another manufacturing facility to support our growing Americas business," Frink said Tuesday. The factory would mainly serve customers in the United States and Canada.

Dell hasn't just been talking about expansion in the United States, however. The company also sees the need to build plants in Europe and Asia over the next few years to support its push to gain market share in PCs and servers, Kevin Rollins, Dell's CEO, said in a recent interview with CNET

Over the "next few years," Rollins said, "we are going to need new capacity in Europe and Asia."

Dell was the top PC maker in the world during the third quarter--it had 18.2 percent of the market, according to IDC--and its Mort Topfer Manufacturing Center in Round Rock can crank out a new desktop every few seconds.

But the company has an ambitious goal of reaching $60 billion or more in annual revenue. To hit that mark, Dell has said it will have to increase its share of the PC market to nearly 30 percent. Such a gain would require an increase in manufacturing output.

While Dell wants to build the new plant in North Carolina, the company is waiting to hear from state officials there. The next step in the process will come when lawmakers discuss a proposed package of incentives for the PC maker during a special legislative session scheduled for Thursday, Frink said.

"We're extremely interested in the North Carolina special session," Frink said. "We appreciate the due diligence they're doing in looking at that package. (However) I can't speculate on what our plans will be pending completion of the session."

It's likely that a decision could come soon after the session, according to local newspaper reports.

The Greensboro, N.C.-based Business Journal reported this week that a decision from Dell could come as soon as Nov. 9. The paper said the PC maker has been evaluating locations in the Triad area, a cluster of three towns--Greensboro, Winston-Salem and High Point. The new factory would cost $190 million to build, and it would employ about 1,900 people, the paper reported. Overall, the plant could bring about 8,400 jobs to the area, as Dell's suppliers would also have to locate near the new plant, the paper said.

The Triad area sits at about the midpoint of the populous Eastern seaboard states, a favorable geographic spot for Dell.

"We have to know where our suppliers are, where customers are, and we have to integrate those for just-in-time delivery," Rollins told "The issue has become one of logistics. The cost of moving a PC around is much more expensive than the labor cost (of building one), and so we locate close to customers."

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