Computer giant Dell wants to sell most, if not all, of its manufacturing plants, possibly including the facility in Winston-Salem, according to a report in Friday’s Wall Street Journal.
However, it is uncertain if the company’s ultimate decision will be to sell or how that may impact the multimillion dollar incentive package Dell received from city, county, state and private agencies when it located in Forsyth County.
A Dell spokesman declined to discuss the article, saying the company didn’t comment on rumor and speculation.
“We’ve very publicly said over the past several months that we will continue to evaluate and optimize our global manufacturing and distribution network,” said Dell spokesman David Frink.
According to the Journal, if Dell finds buyers for the plants, the company would then contract with computer manufacturers to produce its PCs.
Bob Leak Jr., president of Winston-Salem Business, said he first heard of the possible sale when he read it in the morning paper.
“I’ve talked to them in the last couple of weeks,” he said, referring to Dell. “I do know the factory here is growing. They added jobs recently, they’re still producing the components the facility was designed to produce.”
And because of that, Leak said he was less concerned by the article. The Dell facility, which opened in Winston-Salem in October 2005, is ahead of schedule in producing the jobs and investments it pledged, he said.
“I see this as a company that is really looking at all the options to be as competitive in a global economy as they can be,” he said.
In 2004, Dell received an incentive package from the N.C. General Assembly with up to $225 million in tax credits spanning 15 years.
The company was expected to create at least 1,500 jobs and invest $100 million over five years.
In addition, the computer maker was to receive a Job Development Incentive Grant valued at up to $14.1 million over a dozen years.
If the plant were to be sold, it’d be up to the five-person committee that oversees the grant to decide what would happen, said Deborah Barnes, a spokeswoman with the N.C. Department of Commerce. The grant is based on performance, and no money is given up front, she said.
It was unclear Friday what the impact of a possible sale would be to the tax credit incentives.
In addition to state money, the city of Winston-Salem kicked in millions in incentives to sweeten the deal. So far, the city has paid $15 million in site preparations and incentives, with Dell receiving $6.5 million directly from the city, said Derwick Paige, the city’s deputy city manager.
The company also receives annual incentive payments as part of the package. It’s due about $7 million over the next 13 years, Paige said.
However, the city’s incentive package does contain “clawback” provisions, giving the municipality a way to recoup money if the company doesn’t produce the promised results. If the plant were to be sold, the fate of the incentive deal would be up to the Winston-Salem City Council.
“Our agreement is with them,” Paige said. “If they wanted to assign those incentives to someone else, that would take an approval by the elected body.”
In addition to the Winston-Salem plant, Dell has U.S. plants in Miami; Austin, Texas; and Nashville, Tenn. Dell’s international plants are in Brazil, Ireland, China and Poland.
Contact Lanita Withers at 373-7071 or lanita.withers@news-record.com
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