Dell said on Wednesday that it plans to close its desktop computer manufacturing plant located in North Carolina by the end of January. The announcement comes just two days after the plant celebrated its fourth year in operation.
The shuttering will put 600 workers in the unemployment line next month, and about 905 employees will be cut by the time the plant closes in January 2010. Dell said it will provide affected employees competitive severance packages, including severance pay, incentive payments, benefits continuation, and outplacement services.
Severance packages come as little consolation to employees who may have been put on the chopping block as a result of a dispute over a $280 million incentive package to open the plant in North Carolina. In 2004, the state agreed to give Dell $280 million in tax breaks, build roads to the factory, and open Dell repair classes in local colleges. In exchange, Dell agreed to invest $100 million in the factory and create 1,500 jobs within five years. But the agreement prompted a lawsuit claiming that using tax revenue to fund grants for private companies goes against the state's constitution.
Dell made no mention of the lawsuit when announcing plans to shut the plant, and instead pointed fingers at the economy.
"This is a difficult decision, especially for our North Carolina colleagues, but a necessary one for our customers and our company," said Frank Miller VP of Dell's Public Business Unit Supply Chain.