Connect to share and comment
Ireland’s second largest employer opts for lower-cost labor labor.
(AP) U.S. computer maker Dell Inc. announced Jan. 8 it will slash its Irish work force and shift its European manufacturing operations to Poland in a move certain to undermine Ireland's recession-hit economy.
Dell is Ireland's second-largest corporate employer, its biggest exporter and in recent years has contributed about 5 percent to the national gross domestic product. Economists warn that each Dell job underpins another four to five jobs in Ireland.
Managers told its approximately 4,300 Irish employees that 1,900 of them — overwhelmingly assembly-line workers — would lose their jobs between April 2009 and January 2010.
By then, the company said, it plans to have transferred the entire Irish production of laptops and desktop computers to a new Dell plant in Poland's third-largest city, Lodz — where labor costs are at least two-thirds lower than Dell's rates in Ireland — and to subcontractors chiefly in Asia.
"This is a difficult decision, but the right one for Dell to become even more competitive, and deliver greater value to customers," said Sean Corkery, vice president of operations at Dell's major facility in Limerick, southwest Ireland. He personally broke the news to large groups of employees.
Corkery pledged to "treat affected employees with dignity and respect and offer them every practical support."
But employees leaving the Limerick plant expressed anger at planned layoff payments: a maximum of one year's base pay estimated at $30,000 for employees with at least eight years' service.
Dell is the dominant employer in Limerick and unemployment is already higher than a soaring national rate nearing 8 percent.
Dell has sent hundreds of Polish staff to Limerick over the past two years to receive training from the Irish workers they are replacing.
"The anger inside there is unbelievable," said Limerick native Mike Killeen, 36, outside the Dell assembly line where he has worked for seven years. He said Corkery "was savaged inside — and rightly so."
Killeen said Dell continued to record annual profits in the billions. "This is not about a company that's in trouble. This is about greed, corporate greed. They're going to Poland because apparently they can make an extra 3 percent," he said.
Dell said the remaining 1,100 Irish workers in Limerick would continue to coordinate manufacturing operations throughout Europe, and research and develop new products. Another 1,300 employees at Dell's marketing and sales center for Europe, located in suburban Dublin, were not directly affected by Thursday's cuts.
Dell put Ireland operations on the likely chopping block a year ago when it announced global cutbacks, citing its declining profits and the loss of its status as the world's No. 1 PC maker to rival Hewlett-Packard Co.
Deputy Prime Minister Mary Coughlan — who last year lobbied the company's chief executive and founder, Michael Dell, to keep cuts in Ireland to a minimum — said the government had been braced for heavy losses.
But Coughlan said the government hoped Dell would choose Ireland for future investment, reflecting the nation's ambition to become a European hub for research and development.