11/09/04 — It's official -- North Carolina to get Dell plant

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It's official -- North Carolina to get Dell plant

By Wire
Published in News on November 9, 2004 1:59 PM

RALEIGH (AP) -- Dell Inc. said today that it would build a manufacturing plant in North Carolina, employing 1,500 people within five years to produce desktop computers.

The plant is scheduled to open in the fall of 2005 at a site to be determined in the area around Greensboro and Winston-Salem. It will employ about 700 in its first year of operation and up to 1,500 within five years.

"The education system, commitment to businesses and proximity to a large and growing base of Dell customers were important in our decision to expand into North Carolina," said Kevin Rollins, Dell's chief executive officer.

Dell also has plants in Tennessee and Texas.

Gov. Mike Easley said, "Dell's decision to locate in North Carolina means thousands of jobs are headed to the Piedmont Triad, bringing better benefits and skills to an area hit hard by job loss due to federal trade policies."

Easley held a news conference at the 0ld Capitol to announce the decision by Dell. "In addition to providing much needed jobs, the Dell project will provide over $700 million in net revenue over 20 years. This project makes good economic sense for North Carolina at a time when our workers need help the most."

Last Thursday, at a special session of the General Assembly called by Easley, legislators approved a $242 million incentives package aimed at convincing Dell to build a $115 million plant.

The exact location of the plant is to be announced later. Guilford and Forsyth counties in the Triad area are believed to be the leading contenders.

The heart of the incentives package -- valued at $200 million -- is a tax credit for each computer or peripheral unit Dell produces, assembles or manufactures in the state. The company would receive a $15-per-unit credit in 2006 and a $6.25 credit from 2007 through 2019.

To receive the credit, the company must employ 1,200 full-time workers within five years and make a $100 million investment in their plant. The legislation initially caps the annual credit at $10 million but it could expand to $25 million if employment at the plant hits 2,500 after 10 years.

Officials with the state Commerce Department have said the average employee salary at the plant will be $28,000, with a range from $18,000 to $140,000. Some lawmakers and interest groups have questioned whether it's worth the huge price to lure jobs in that pay range.

But state Commerce Secretary Jim Fain said last week that altering the package could jeopardize the deal. Fain wants Dell to break ground by the end of the month.

The credits would be prorated if the company eliminates more than 40 percent of its work force in any one year.

Dell, based in Round Rock, Texas, has 13 percent of the global computer market. The new North Carolina plant is intended to speed products to its customers in the eastern United States.

Through the first half of this year, Dell increased unit shipments by nearly 20 percent and increased its U.S. market leadership by two share points to more than 33 percent, the company said in a news release.