HP Will Build Factory in the Netherlands

Hewlett-Packard Co., the world’s third-largest personal computer maker, said it will build a new PC manufacturing plant in the Netherlands to take advantage of the country’s excellent infrastructure and access to principal European markets.

The company said the new facility will employ about 600 people. It didn’t disclose the cost or location of the new plant.

The Palo Alto-based company has a printer plant in Amersfoort, the Netherlands.

Hewlett-Packard also considered building the new manufacturing plant in Dresden, Germany, and at a site in Poland, according to a company spokesman.

“They decided to go to Holland because of a huge tax allowance which we just could not match, even though we offered them really high subsidies,” said Rolf Wolgast, Dresden’s mayor for economic development. “In addition, labor costs are just too high in Germany,” Wolgast said. He declined to give any numbers or details of the offer. “We are very disappointed about the decision,” he said.

Dresden is the center of former East Germany’s microelectronic industry and has already attracted Siemens, which built a semiconductor plant that employs 2,100, and Advanced Micro Devices, which is building a microprocessor plant, scheduled to start production in 1999 and be in full operations in 2001.

The Polish site attracted Hewlett-Packard because of its comparatively cheap labor, said Wolgast, even though Poland doesn’t have a large pool of workers experienced at making computers.

Hewlett-Packard is the second-largest computer supplier in the United States, with computer-related revenue in excess of $31.4 billion in fiscal 1996.

Hewlett-Packard’s shares gained 88 cents to close at $70.50 on the New York Stock Exchange.