Dell's Ireland plant to shed 1,900 jobs

Dell announced Thursday that it is closing its manufacturing operation in Limerick, Ireland, and shifting production to its Polish plant and to third-party contractors.

Assembling a desktop PC at Dell's Limerick plant.

(Credit: Dell)

The move will result in the loss of 1,900 jobs in a facility that employs 3,000 people.

Employees and unions in Ireland have long been expecting the decision, which is part of a $3 billion restructuring that Dell announced last year.

Dell said in a statement that the first Limerick employees would leave the company in April and the whole process of switching production will be completed by January 2010. Workers will receive a competitive severance package and career outplacement assistance from the company, the company added.

The PC maker has had a facility in Ireland for 18 years, where it has become a major force in manufacturing and the largest employer in the Limerick area. Commenting on the move Sean Corkery, vice president of operations, Dell Europe Middle East and Africa said: "This is a difficult decision, but the right one for Dell to become even more competitive, and deliver greater value to customers in the region."

According to Dell, the company's remaining employees in Ireland "will continue to co-ordinate EMEA manufacturing, logistics and supply-chain activities across a range of functions including product development, engineering, procurement and logistics." Dell will keep its Global Innovation Solutions Center and European Command Center in Limerick.

In late December, the company reorganized its management structure as it reacts to changing customer requirements. In March 2008, Dell closed a home state plant in Austin, Texas, as part of its plans to cut at least 8,800 jobs.

Colin Barker of ZDNet UK reported from London.

[ppgreat]

"This is a difficult decision, but the right one for Dell to become even more competitive, and deliver greater value to customers in the region."

Gotta love the business school boiler plate. Shedding jobs and physical plants doesn't make you more competitive. It is an attempt to shore up your mounting losses. If you don't produce a compelling product, you don't have sales. If you don't have sales, you run around trying to cut costs.

But what do you do when you run out of places to cut?

By design, Dell is a producer of cheap PCs and servers. It operates on razor thin margins. If something affects that tenuous business model (economy, poor customer service, Vista, etc.), it's hosed. It does not innovate because it can't afford to.

Dell is the new Gateway.

"Workers will receive a competitive severance package and career outplacement assistance from the company, the company added."

Career outplacement?...To do what? They have 8% unemployment already!
Competitive Severage Package?...Other reports state ~33K US for someone with 8 years.

This Post is lacking other important details that have to be pieced together from other more reliable sources.

[SportyandMisty]

This is all about international tax competitiveness -- not about products or effectiveness or efficiency. The only reason Dell (and other tech manufacturers) have manufacturing in Ireland is because EU rules require EU presence for manufacturing or suffer from exorbitant tax penalties. Now,, companies are relocating from Ireland to Poland and other Eastern European countries because of taxes: Poland offers long-term tax incentives, guaranteed low-cost electricity & water & gas... all to lure companies from one country to another.

Ireland just couldn't compete.

[Compumind]

PLEASE READ THIS!

In my opinion, Dell is a loser. Their product quality and innovation has been going downhill for the past 5 years. They are definitely going down the same path as Gateway. They already manufacture in China, so the question arises - Where next? Eventually, Dell will not pay wages, but give people in developing countries the basic neccessities of life - Food, Shelter, etc. As a matter of fact, the way this whole global economy is going, we (in the USA) might be there sooner than we think! :0(

[learnerplates]

Tough love alright. Dell supplied many people in the area with a decent living for 18yrs but now they're really out in the cold with no replacement. Would they have been better off not joining Dell in the first place and making a career instead, maybe. Not truely convinced that the corporate american ideal is the right way to go, creates lush grassland for a few years and then packs up and leaves a desert. Manufacturing moves eastwards, it'll come full circle yet.
Best of luck to Dell anyway I'm sure their investors are delighted with their couple of cents more.

[fokkwp]

Those Irish - just charging too much for their labor, living the high life, compared to the Poles and "contractors". "Contractors", for those who have been living on some other planet during the last few decades, are "Export Zones" in China, Thailand, Sri Lanka and wherever else - fairly temporary assembly areas that get huge tax breaks from the locals for a few years, pay nothing for upkeep to the local infrastructure, pull uneducated peasants off the farms to work for wages that allow them to sleep on a dorm bunk and send a few pennies home to the folks - then as the locals start to demand that the contractor pays taxes, they pull up and move on to an even cheaper location.

[sinofguns]

Another reason besides unimaginative products and poor support not to buy Dell.

[cnetSeanet]

I guess this officially turns Limerick, Ireland from a terrible place to an incredibly terrible place. Just after the NY Times published an article about the very sad state of employment and life in Limerick:

http://www.nytimes.com/2009/01/04/business/worldbusiness/04ireland.html?_r=1&scp=1&sq=limerick&st=Search

[Evertb1]

It's not all doom & gloom.
Some people are actually refusing to see this as the end of the world.
Good old entrepreneurial spirit saves the day again: http://opencoffeeclublimerick.com/?p=43