WINSTON-SALEM – Since Dell Inc. announced last week it will close its Triad desktop computer manufacturing plant and put 905 people out of paychecks, observers have asked if there were options to keep the operation going.

Could the Texas-based computer conglomerate have shifted production to laptops, a more popular consumer item? Could Dell have taken advantage of its record state and local incentives package to weather the recession a little longer until desktop orders picked up?

Perhaps an answer to the puzzle can be found in two sentences in a petition filed this week with the U.S. Department of Labor. The Trade Adjustment Assistance Act petition would permit Dell’s Winston-Salem workers to receive additional unemployment benefits because their jobs were lost to foreign competition.

The petition states: “Our (Dell’s) work volume is being transferred to a global manufacturing network.

The work will be given to third-party providers who operate in Mexico and other countries around the globe.”

Mexican labor costs basically are 10 percent of U.S. costs, according to information through the American Manufacturing Trade Action Coalition (AMTAC) in Washington. Labor costs in China, where most major furniture manufacturers have relocated from the Triad this decade, can be 5 percent to 8 percent of American labor costs, AMTAC reports.

Five years ago when Dell committed to North Carolina, state officials and business leaders expressed hope that a high-tech company would weather offshoring pressures better than furniture and textile operators, which eliminated tens of thousands of manufacturing jobs in the Piedmont by shifting overseas.

Dell serves as a sobering example that no type of manufacturing is immune to offshoring pressures.

“The closings of hundreds of textile and furniture factories were simply a preview of what was bound to happen to other sectors like high-tech,” said AMTAC Executive Director Augustine Tantillo.

State, Winston-Salem and Forsyth County officials were concerned about competition from other states when recruiting the Dell plant earlier this decade, said Greg LeRoy, executive director for the group Good Jobs First in Washington. But all along, the greatest threat was from overseas, said LeRoy, who’s written about the Dell experience in North Carolina.

“For manufacturing of all kinds, the issue for the state today is globalization,” LeRoy said.

pjohnson@hpe.com | 888-3528