Dell To Close North Carolina Desktop Plant

The decision Wednesday to close the plant located in Winston-Salem, N.C., will become effective in January of 2010, with approximately 905 employees losing their jobs as a result. Dell said it plans to meet customer need for desktop computers by dispersing its volume across different plants in its ecosystem.

"From a desktop perspective, we have seen declines in demand from customers and growing traction with notebooks among customers. With that dynamic in mind, we made the difficult decision to close the plant," the spokesperson said.

The decision to close the facility comes as part of Dell's stated initiative to remove $4 billion of operational expenses by the end of fiscal year 2011, but it also occurred due to a decline in revenues in the desktop market, according to a Dell spokesperson.

The volume previously handled by the North Carolina plant will be transferred to several company-owned locations around the world, including facilities in the U.S., Poland and India. In January of 2009, Dell laid off 1,900 employees at its Limerick, Ireland, plant. Production from the manufacturing plant in Ireland was transferred to an existing facility in Poland and third-party OEM partners.

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The Round Rock, Texas-based computer manufacturer was offered an estimated $300 million in tax incentives to build the manufacturing plant in Forsyth County, N.C., in 2005, The Business Journal of the Greater Triad Area reports. But with the company making the decision to close to plant, Dell is on the line to repay much of the incentive money.

North Carolina Governor Beverly Perdue Friday told the AP that she intends to make Dell repay "every red cent" it was granted in tax breaks and incentives for not sustaining its end of the bargain.

Dell, for its part, plans to honor its commitment to the state of North Carolina.

"Dell will continue to comply and honor the terms of the agreements we have in place. We received various monies under various incentive packages and will address each one separately. We will honor our commitments," said a spokesperson.