Dell to Sell Factories as It Retools Strategy

PC maker will shed infrastructure in effort to stay competitive
By Clay Dillow,  Newser Staff
Posted Sep 5, 2008 9:30 AM CDT
In this May 29 file photo, Dell Inspiron 1525 laptops are on display at Best Buy in Mountain View, Calif. Computer maker Dell Inc. says its fiscal second-quarter profit fell 17 percent.   (AP Photo/)
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(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.