Week of November 15, 1999
  Snapshot from the Field

Dell Adding Second PC Plant in Nashville

Only three months after opening a manufacturing plant in Tennessee, Dell Computer (www.dell.com) has announced that it's building a second assembly facility in Nashville, which will up its local-area work force to almost 2,500 employees. Combined with existing jobs, the new facility puts Dell ahead of its projected growth curve in the Nashville area, which earlier this year landed Dell's first U.S. factory located outside of Central Texas.

"We are putting the capacity where it makes the most sense to support the consumer and the small business lines of our business," Dell spokeswoman Cathie Hargett explained at the announcement of the new Nashville plant.

Dell's new facility will add some 700 jobs to the work force that the company is rapidly building in Middle Tennessee. Already, Dell has amassed a local area work force of some 1,700 employees.

Some 1,300 of those workers are operating in leased space on a site located 25 miles (40 km.) east of Nashville, where they're assembling Dell's Dimension line of desktop personal computers. That 1,300-worker contingent will continue to operate out of the leased location when the new manufacturing plant opens in 2000, Dell officials say.

Dell has another 400 local area employees who are working in customer support inside leased space location in Nashville. That location, however, is temporary. The customer-support group will later move into a 300,000-sq.-ft. (27,000-sq.-m.) office building that's now under construction.

Both the customer support group and the new announced manufacturing plant will be located on Dell's massive Nashville area site, an 800-acre (320-ha.) tract east of Nashville International Airport. The Dell manufacturing facility will be located on that site on the 150 acres (60 ha.) that the city owns.

New Expansion Is About 'Managing Growth,' Dell Says

Spanning 300,000 sq. ft. (27,000-sq.-m.), the new manufacturing facility in the Nashville area will be roughly the same size as the newer plants that Dell has established in Central Texas, where Dell originated. Dell has established a major cluster in Central Texas that tops 20,000 employees. In concert with the U.S. economic boom of the 1990s, that large cluster, however, has, strained both work-force availability and infrastructure in Central Texas, Dell officials say. That, in turn, prompted the decision to further ramp up the company's growth in Nashville.

"This is about managing our growth in a way that is good for everyone," said Dell's Hargett.

At the same time, though, Hargett added that Dell will continue expanding in its Central Texas birthplace, which is epicentered around the Austin metro.

Dell CEO: 'We Are Making Good On Our Pledge'

Dell's expansion into Tennessee has not been without controversy. At the center of the controversy have been the guaranteed 40-year property-tax exemption and other incentives that Dell will receive. All told, the Dell incentive package is valued at US$166 million. That, in turn, has triggered rumbling among some critics, who say Dell's new jobs don't merit the lavish outlays.

Dell chairman and Chief Executive Officer Michael Dell seemed to be cognizant of the controversy when making the announcement of the company's new Tennessee expansion.

"We are making good on our pledge to the people of Tennessee," Dell said in Nashville.

Dell 1,700 existing Nashville-area jobs are well ahead of the company's original projections of 1,000 jobs by the end of 1999. And the announcement of the second plant puts Dell well ahead of the long-term pace it projected earlier in 1999, when the company said it expected to have at least 3,000 Nashville-area employees within five years.

Dell Suppliers Moving In

Dell supplier operations are also beginning to migrate to Nashville, another part of the job-creating trend that local economic development officials are hoping will continue.

Two recent Dell supplier additions to Nashville's corporate citizenry are Austin, Texas-based Brandt & Hill, which supplies manufacturing lines and distribution systems, and Houston-based PalEx, which is the United States' largest maker and recycler of wood pallets.

Both companies' initial Nashville-area operations are small. Both, however, say they plan to grow major operations in the area, serving not only Dell, but other companies as well.



©1999 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.