Dell looks to sell factories worldwide

Sep 05, 2008

By Scott Moritz

Dell (dell) is getting more serious about trimming costs and is exploring plans to sell its PC manufacturing plants, according to a news report Friday.

Once the leader in the low-inventory, built-to-order model for producing PCs, Dell is now relying more on contract PC makers. As part of that shift, Dell is trying to sell some or all of its manufacturing facilities, according to a report in The Wall Street Journal.

The newspaper, citing anonymous sources, says Dell is looking to sell most or all of its factories within 18 months.

The move comes just over a week after the Round Rock, Tex.-based giant disappointed Wall Street with lower-than-expected profits in the second quarter. The company has struggled to revamp its sales strategy to focus less online orders and more on retail sales in big outlets like Best Buy (bby). The shift has been costly, however, in terms of marketing and distribution expenses.

Now Dell is looking to contract manufacturers to cut costs and beef up its notebook computer segment.

"We are actively reviewing all aspects of our logistics, supply chain, and manufacturing footprints. This review is focused on identifying efficiencies and cost reduction opportunities," the company said in a regulatory filing Thursday. The company says it has already sold two facilities, one being a PC production plant in Austin, Tex.

Dell was down 2% in premarket trading Friday.

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