Dell seeks to sell its computer plants

Dell Inc., one of the largest providers of computer products to the federal government, is seeking to sell its manufacturing plants worldwide, according to the Wall Street Journal.

Citing sources familiar with the situation, the newspaper said Dell has approached numerous overseas contract computer manufacturers and is hoping to sell most, and possibly, all its factories within 18 months. So far, however, there have been no buyers. The most likely manufacturers that might be interested in purchasing Dell facilities are in Asia. They could build Dell computers at lower costs.

Rivals such as Hewlett-Packard Co. switched to contract manufacturers years ago, the newspaper said.

The move is prompted by efforts to reduce manufacturing costs, disappointing quarterly sales figures and increasing shareholder pressure to improve profitability, the newspaper said. Also, the company's model of providing large volumes of desktop computers has been hurt by the shift to laptops.

"Dell has lagged behind competitors in coming up with a streamlined system to build portable PCs," the Journal said.

Dell, of Round Rock, Texas, ranks No. 15 on Washington Technology's 2008 Top 100 list of the largest federal government prime contractors.