Dell Shutting Down Major Winston-Salem Plant

Posted Oct 9, 2009

The state of North Carolina must not be too happy with Dell Inc. (NASDAQ:DELL). As I write this article, I am sitting at the Duke University Fuqua School of Business in Durham, NC while on “vacation.” My cousin told me that many of his fellow MBA classmates visited the facility last year as part of an Operations class too. Ouch, sorry to hear the news North Carolina, but all of us are feeling the ruthlessness of the recession especially in the state of Michigan where I am visiting from.

When the Dell plant was first opened, politicians and analysts predicted that there would $300 million generated in state and local inducements. The plant was supposed to employ 1,500 people, create 500 related jobs, and even have a $24.5 billion impact over the next 20 years according to politicians. Instead the plant will shut down in the next four months.

Based in Round Rock, Texas Dell decided to shut down the facility as a plan to simplify their operations. Dell’s goal is to save $4 billion this year and another $4 billion next year. The company sold a remanufacturing plant in Tennessee this past June and is moving an operations facility from Ireland to Poland.

Allen Joines, the mayor of Winston-Salem said that Dell will pay back all of the money the city provided them with upfront costs and other incentive payments. Other major companies based in Winston-Salem include R.J. Reynolds Tobacco Company, Krispy Kreme Doughnuts Inc., TW Garner Food Company, and HanesBrands Inc.