Rapidly expanding PC maker Lenovo plans to create 115 manufacturing jobs in Guilford County, where workers will produce Think-brand notebook, laptop and tablet computers.
The No. 2 PC maker confirmed Monday that it is expanding its operations in Guilford County, where it opened an order fulfillment and distribution center in 2008, to include a manufacturing line. Lenovo currently occupies about 250,000 square feet in Whitsett, about 10 miles east of Greensboro, and employs 160 full-time workers there.
The company’s positive experience in Whitsett, combined with the area’s skilled workforce and “excellent education and training infrastructure,” made it the ideal choice for a U.S. production line, David Schmoock, president of Lenovo’s North American business, said in an email message. He added that the company recently expanded its Whitsett plant and therefore can launch a production line without adding new space.
Schmoock said the move “reflects our confidence in the U.S. PC market” and noted that the company could end up expanding its production capabilities in Whitsett “based on customer demand.”
The company’s new PC manufacturing line, which will cost about $2 million, is under construction and is expected to begin operating early next year. Hiring is expected to begin later this year.
Schmoock said Lenovo isn’t receiving any state or local incentives for expanding in Whitsett.
In an email message outlining the expansion, the company said its first U.S. manufacturing plant will enable it “to deliver products to customers even more quickly and reliably in many situations.”
Lenovo is based in China but has its executive headquarters in Morrisville, where it employs about 2,000 workers. The company entered the U.S. market – and in the process became a major employer in the Triangle – when it acquired IBM’s PC business in 2005.
The new manufacturing jobs are sorely needed in a state where the unemployment rate stood at 9.7 percent in August. That rate is higher than all but four states, with the loss of manufacturing jobs contributing to the situation.
Lenovo said it was “defying a trend that has seen electronics manufacturing jobs migrate overseas for more than two decades. … The U.S. PC production line is the latest investment in Lenovo’s aggressive strategy to expand its in-house manufacturing capabilities around the world.”
Over the past two years Lenovo also has invested in new manufacturing plants or manufacturing joint ventures in Brazil and China.
Lenovo currently manufactures PCs for the U.S. market elsewhere, including in Mexico and China. Schmoock said that the cost of production will be “slightly higher” in North Carolina, but the move will help the company stand out from the competition and better serve customers.
Lenovo is the world’s second-largest PC maker but is on the verge of moving into the No. 1 spot thanks to sales that have far outpaced the competition for more than two years. The company has benefitted from acquisitions, aggressive pricing, attractive products and miscues by competitors – such as HP’s flirtation with exiting the PC business altogether.
Lenovo’s rising sales have put it in expansion mode even as a sluggish PC market, and competition from Apple’s iPad, has pushed its competitors to retrench. Hewlett-Packard said in May that it planned to cut 27,000 jobs, and Dell is planning to cut costs by $2 billion over three years – a move that undoubtedly will trigger layoffs.
In the latest quarter Lenovo’s worldwide PC shipments rose 24.4 percent, compared to a nearly 2 percent decline for the industry. Overall the company, which also produces mobile phones and smart TVs for the Chinese market, posted a 35 percent increase in revenue to $8 billion in its fiscal first quarter, which actually lagged the torrid 54 percent jump in revenue it enjoyed the preceding quarter.
Although Lenovo is No. 2 in worldwide PC sales, it’s No. 4 in the U.S. market, according to research firm IDC.
Lenovo has scheduled a press conference about its expansion for 2:15 p.m. Tuesday at its Morrisville headquarters. Gov. Bev Perdue and a host of other public officials are scheduled to be on hand.