Dell bypasses Germany for new European factory

High-cost, highly regulated Germany will not be the site of a new factory that Dell plans to build in central Europe.

“Germany is no longer in the running,” said Dell spokesman Stefan Böttinger.

Dell plans to reach a decision on the site of the new plant by the end of the year, according to Böttinger. He declined to comment on when the new facility would go into production or which countries were still in the running.

“What we want is a central European location to be able to meet growing demand for our products on the continent,” he said.

Currently, Dell has only one plant in Europe, located in Limerick, Ireland.

Böttinger mentioned labor costs as one of the factors for selecting the site of the new plant. “This is an important one but there are others, such as logistics, taxes, skilled people, and labor laws,” he said.

Dell had been studying the possibility of building a factory in eastern Germany, the former Communist-controlled German Democratic Republic, which has received huge subsidies from western Germany to rebuild itself.

Rumors circulating in the media point to one of the new members of the European Union in the East, such as Poland, the Czech Republic or Hungary, as the most likely candidate to win the new factory.

In September, the U.S. hardware manufacturer opened a new service and sales center in the eastern German city of Halle. The center is responsible for small- and medium-size enterprise customers, according to Böttinger. It joins the service and sales center in Frankfurt am Main.