Breaking News-DELL expands ,new facilities in Austin this year & 1 in Nashville.
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What slow down??????? Best news I heard all day.
yup 5fer is a damn lier.
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Dell plans expansion in Austin, Nashville
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Tennessee move marks first U.S. venture outside the region
By Jerry Mahoney
American-Statesman Staff
Published: April 1, 1999
ROUND ROCK -- In a major expansion with impact well beyond Central Texas, Dell Computer Corp. expects to add two facilities in North Austin this year and, for the first time, push its U.S. growth outside the region by starting a campus near Nashville, Tenn.
The expansion to Nashville is a major milestone for Dell, which was born in a University of Texas dorm, and is spurred by the increasingly dominating role it plays in the Austin-area economy. It also signals that Dell expects to continue its industry-leading growth during uncertain times for the major PC makers.
The company will announce the expansions today.
On Wednesday, Dell Vice Chairman Kevin Rollins told the Austin American-Statesman that the company will add a second manufacturing plant and an office building on the 570-acre campus it opened last fall in Northeast Austin. Those buildings and three office buildings under construction on its 350-acre Round Rock campus will accommodate 4,700 new employees this year, lifting Dell's total to more than 22,000, Rollins said.
Rollins said the Nashville expansion will create new jobs and will not diminish Dell's Austin-area presence. The company added 4,000 jobs in Central Texas last year. The move is based on Dell's concern, which is echoed by Austin officials, that the company is becoming too big a fish even for the region's growing pond.
Directly and indirectly, Dell accounted for 60 percent of the region's job creation last year, Rollins said, and 14 percent of the economic production of goods and services.
"That's good news, but at some point that can become a little bit scary news," he said.
"We want to make sure that as we continue to grow, that we do that responsibly and we don't overgrow, overtax the community, have the community become so dependent on that that we become a possible liability," Rollins said. "We desperately, desperately don't want that."
Dell officials, who regularly brief Austin Mayor Kirk Watson on their plans, told him about the Nashville expansion last month. Joining Rollins in an interview at the American-Statesman offices, Watson offered his full support. He recalled that Austin's overdependence on real estate development during the ill-fated boom of the 1980s sent ripples through most of the economy at the slightest downturn.
"At some point they become such a dominant component of our economy that we need to be smart about how we approach that, not just as a community seeking economic development and seeking to grow, but also as a company," Watson said.
Experts agree that it makes both economic and political sense for large and growing companies to locate facilities in different regions of the country. That not only prevents a potentially stifling dependence on one area's work force, highways and utilities, but it also creates goodwill for the company in diverse regions, said Jeff Swope of Champion Partners, a Dallas company that specializes in relocating major corporations.
"If I was Dell, it would make a lot of sense to spread the wealth around," Swope said.
The decision marks a significant step in the evolution of Dell and Austin, whose reputation as a technology center stems primarily from the presence of computer chip plants owned by Motorola Corp., AMD and Samsung, and IBM's huge software operation in North Austin. Each is a satellite facility of a big corporation whose headquarters are somewhere else.
Rollins said Dell considered more than 20 cities in the Southeast, Southwest and West before picking Nashville. The region met the basic transportation requirements for shipping finished PCs, and it has a labor force of qualified or trainable workers, he said.
In addition, Dell is negotiating incentives such as tax breaks with local and state officials, Rollins said. Columbia/HCA Healthcare Corp., the national health-care provider, received tax breaks valued at $90 million over 10 years when it moved to the Nashville area in 1995.
"We really haven't nailed down the county yet," Rollins said. "It's around the Nashville area and there are a number of sites, a number of counties and a number of cities that we're still negotiating with to finalize what we put where."
He said Dell, the world's No. 3 PC maker, has not decided whether the first Tennessee facility will be an office building for such jobs as technical support and customer service or whether it will be another manufacturing site.
A spokesman for the Nashville mayor said Dell indicated it wanted a 1,000-acre site but that Davidson County, which includes Nashville, did not have a site with that much land.
While it is not regarded as a technology center, Nashville has other features that may strike a chord with Dell employees who transfer to jobs there. It has a deep heritage in country music and it is the state capital. Vanderbilt University in Nashville has about 11,000 students.
Public officials whose bids for Dell failed to land the project were being notified early this week. Rollins said Tennessee officials were told the news Wednesday.
Gov. Don Sundquist declined through a spokeswoman Wednesday to comment, saying it was Dell's announcement to make.
Rollins would not project how big the Nashville-area campus might become. But an official in Colorado, which made a bid for the campus, told the Colorado Springs Gazette that Dell expected to start with 2,000 workers and potentially grow to 10,000.
Dell's aggressive growth comes against a backdrop of an industry whose shipments are growing while revenue is being squeezed because of falling computer prices. Rollins said he expects industrywide shipments to increase 17 percent this year, and predicted Dell will continue to grow faster than the industry.
Because of that confidence, Dell opened three facilities last year, and will open seven more this year in U.S. and foreign cities.
"They're doing all things right to make money in this business," said Bill Schaub, a vice president at Dataquest Inc., an industry consulting firm.
Dell shares rose $1 to $40.87 1/2 Wednesday in Nasdaq trading.
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