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December 2, 2008 7:38:47 PM CST

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Dell to Sell Factories as It Retools Strategy

Posted Sep 5, 08 9:30 AM CDT in Business 

(Newser) – Dell is looking to sell off its computer factories, the Wall Street Journal reports, drastically altering a business model that was once the envy of the industry. Journal sources say the aim is to sell most, if not all, of the plants in the next 18 months; most likely buyers would be big contract manufacturers expert at finding efficiencies in manufacturing.

Dell’s direct-order, custom-built PC business relied heavily on large desktop commercial orders, but a consumer shift to laptops sold via retail outlets has cost Dell its industry-leading position. Joining its rivals in outsourcing operations to production partners could improve shrinking margins. "A lot of companies are already on that model," Dell's production chief tells the Journal. "We're playing catch-up there." Last week, shares slipped 18% after the company posted disappointing quarterly profits.

Source Wall Street Journal

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