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Dell ends production at Winston-Salem plant

Saturday, November 20, 2010
(Updated 7:06 am)

WINSTON-SALEM (MCT) — Dell Inc. shut down the production lines at its Winston-Salem plant yesterday, ending a six-year run that started with great fanfare but ultimately failed to reach its economic potential.

Officials confirmed that assembly of desktop computers ended yesterday afternoon.

Any further activity at the 750,000-square-foot plant would be "part of the exiting and shut-down work required," said David Frink, a spokesman for Dell.

He would not give a final closing date.

When Dell initially said it was closing the $110 million plant in October 2009, local officials were told that it would take two to three months to remove equipment and completely shut down.

"We're proud of our North Carolina team members, the outstanding products they produced for our customers over the past five years, and of the contributions they made to the Piedmont Triad," Frink said.

Dell opened the plant in October 2005 -- about 10 months after becoming eligible for up to $38 million in local incentives and up to $267 million in state incentives.

The company pledged to have from 1,500 to 1,700 employees, including suppliers and vendors, in the plant. The length of the incentive contracts led to projections and expectations that the plant's lifespan would be at least 15 to 20 years.

But even before the plant was opened, analysts predicted it wouldn't last that long for two reasons -- the desktop-computer market was nearing saturation, and laptops were expected to overtake desktops in popularity.

Both came to pass much sooner than expected.

Dell chose not to assemble laptops here because it's less expensive to build them overseas. Production of servers -- a computer system that provides essential services across a network -- never materialized as hoped.

"We were fortunate to have had Dell in our community, both for the jobs it provided and the national and international recognition we gained by being selected for its plant," said Gayle Anderson, the president and chief executive of the Winston-Salem Chamber of Commerce.

The plant's work force reached a peak of 1,400. By the time Dell initially announced its plant-closing plans, it was down to 905. About 400 jobs were cut in November 2009.

The plant was given four reprieves, but Dell said on Sept. 10 it would close the plant this month.

Within weeks of making the decision to close, Dell agreed to pay back $26.5 million in local incentive money. Had Dell not agreed to do so, and kept the plant open through at least October 2010, it would have been eligible to keep half of the local incentive amount.

On Sept. 22, Dell chose a Chicago real-estate broker, Jones Lang LaSalle, to market the plant. Simpson Schulman & Beard, a real-estate company in Greensboro, will assist.

"Dell prefers to sell the plant to a single buyer, but has expressed a willingness to be flexible for leasing it on a long-term basis," said Chris Skibinski, the managing director of logistics and industrial properties for Jones Lang LaSalle's Charlotte office. He said that Dell has not disclosed a sale price publicly.

Mayor Allen Joines said that knowing for more than a year that the plant was closing didn't make the final production day less sad.

Although Joines expects Dell will take two to three months to exit, "if we had a hot prospect, they might could even bump that up a little bit. Dell's been good to let us show the property."

Jerome Sanders of Winston-Salem said he was not bitter about losing his job. He worked as a material handler and a burn operator, often working six or seven days a week and nine- to 11-hour shifts.

"It's been a long, hard road," Sanders said. "I've made it, and it is time for a new chapter."

Keith Bunch of Kernersville, an employee whose job ended Nov. 1, returned to the plant yesterday to say goodbye to his former co-workers.

"A lot of people left good jobs to work here," he said.

Losing his job at Dell hasn't scared off Bunch from manufacturing.

He said he plans to apply for a job at the Caterpillar Inc. plant, which will be built just yards away from Dell.

Accompanying Photos

Nelson Kepley

Photo Caption: The Dell plant in Winston-Salem.

Comments

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atticusfinch

November 20, 2010 - 7:58 am EST

$38 million in local incentives and up to $267 million in state incentives, all for a multi-billion dollar corporation that stayed only five years and never produced the promised benefits. If there has ever been a reason to end the insane waste of taxpayer money on corporate welfare, the Dell fiasco is it.

DrMaryJohnson

November 20, 2010 - 8:02 am EST

The local incentives were paid back, but what about the over 250 million in state incentives?

I mean, from what I understand, North Carolina is almost 4 BILLION in the hole.

What gives?

aintme

November 20, 2010 - 10:38 am EST

Why am I not surprised that the first two comments to this article would be about INCENTIVES and taxpayer dollars??? Is that all you people think about? Does it possess your every waking moment? These people lost their JOBS!!! Obviously you have no idea how tragic that is. I hope you never have to find out. Get a life.

Real Worker

November 20, 2010 - 12:30 pm EST

Dell in Kernersville ran as an EEOC wish list of every form or racial exclusion they could demand, and I have no sympathy for the ones who got their jobs that way. Let me explain, as I worked there as a temp facing a lot of resentment from Dell employees who believed everyone else owed them a living.
First, look at the factory floor level which was easily two-thirds black, becoming more concentrated as one climbed this questionable ladder of success, with supervision being nearly all black. The usual extreme double standard in behavior practiced against whites was predictable.
From there, look at the wall posters. Every bit of it featuring people was geared to representing ethnic groups far out of proportion to their actual presence in the thirty miles surrounding the plant. Much like the Dell workforce, really.
Taking this to an extreme, the entrance hallway had a huge bulletin board promoting only the Asian market. Twice while I was there, a large part of it was covered with a second display detailing the history of the gay and lesbian pride movement. I did not go to work for that kind of constant divisive propaganda from company management.
In a sense, I don't blame Dell. They did what government agencies demanded, be they local, state or federal. The ones who deserve our sympathy are the homeownwers of Winston or Forsyth who were taxed excessively in a redistribution scheme, from those who work in the west to those who expect to be taken care of in the east.

DrMaryJohnson

November 20, 2010 - 6:43 pm EST

Obviously, aintme, you have not read my blog. Why yes, I have a fairly good idea how "tragic" it is to lose my job . . . and yes,indeed, it has affected almost every waking moment since.

Moreover, my tragic story has not gotten any front page love from the N&R.

Oh, and I have a life - not the one I wanted when I came home on the government's dime (so I know something about incentives too), but it's a good life. Mostly because I didn't sell my soul to get it.

Lord Trigo

November 20, 2010 - 7:33 pm EST

Given the amount the state, county and city spent on this boondoggle, they could have sent all those employees to four years of college for far less. Instead they bought them a few more years in a manufacturing industry that is increasingly moving overseas. Now they're laid off in the midst of the worst downturn since the Great Depression with nothing more than the "nut goes here, bolt goes there" skills that someone can do in China for a fraction of the cost. The only winner in this situation was Dell, surprise, surprise. Dude, you're getting s****ed!

kurts12gauge

November 20, 2010 - 11:58 am EST

The NC Democrat legacy continues.....

Lord Trigo

November 20, 2010 - 4:31 pm EST

The incentive policy is dumb, dumb, dumb. Most new jobs are created by small businesses. The state could've have used that $230 million to give one million each to 230 startups, some of which would have been successful and resulted in jobs that would have stayed in this state for years. Instead the money always goes to big corporations who don't really need it and have no plans of staying any longer than it takes to build their new factory in China. Just another way of taking from the haves and giving to the have-mores.

jorrell245

November 21, 2010 - 12:24 am EST

Bev P. is so excited about job additions, why isn't she spouting off about the closure of the Dell plant? Oh, wait that's right, this is a job loss, tax dollar loss, and state incentive / investment loss situation, must be too yucky for her to associate herself with!

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