Thursday January 8, 05:01 PM
New blow for Ireland as Dell moves regional centre
By Andrew Bushe
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DUBLIN (AFP) - Ireland suffered another economic body blow on Thursday as US computer giant Dell (NASDAQ: DELL - news) announced the closure of a major regional plant, slashing 1,900 jobs in the recession-hit former Celtic Tiger.
Ministers voiced regret at the decision by Dell, whose Limerick production centre for Europe, the Middle East and Africa represents some five percent of Ireland's GDP, to move operations to Poland.
"I recognise that a fundamental change in its business model was considered necessary.. to enable it to continue to compete in the global market," said Deputy Premier Mary Coughlan, saying she was "deeply disappointed" at the move.
Dell, which has been hard-hit by the economic slowdown and increased competition, last month announced a major reorganisation of its worldwide operations.
And in a statement on Thursday it said "will migrate all production of computer systems for customers in Europe, the Middle East and Africa from Limerick to its Polish facility and third-party manufacturing partners over the next year."
"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 for Europe, the Middle East and Africa.
The Dell factory in Limerick, western Ireland, was set up in 1990 and was one of the jewels in the crown of Ireland's so-called Celtic Tiger economy, employing 4,500 people at its height. Dell remains Ireland's biggest exporter.
But Ireland was the first country in the eurozone to formally go into recession last September, as its property boom collapsed and job losses mounted.
Prime Minister Brian Cowen said the relocation of the jobs to Poland was a "major blow" to Limerick and its surrounding region, as well as further afield because of associated business.
"This decision represents a major loss to the region," he said.
"The government will continue to work with Dell to identify further development opportunities which may arise as the company continues to develop the new business model which is responding to the global business environment."
Peter Power, a local lawmaker and junior foreign minister, described it as a "bleak day" for Limerick. "The government made every effort to dissuade Dell's parent office in Austin, Texas from making this decision.
"It is clear however for some time that Dell has decided to outsource all of their manufacturing facilities globally and this is the direct cause of today's announcement," he added.
Dell said its "Global Innovation Solutions Centre" and other facilities would remain in Limerick despite the factory's closure, and it would continue to operate sales and marketing operations in Dublin.
Deputy Premier Coughlan, who is also minister for enterprise, trade and employment, tried to put a brave face on the Dell announcement.
"In my discussions and meetings with Dell, it was always made clear to me by the company that any decisions that it would take, were in no way a reflection on the quality its workforce or the operating environment in Ireland.
"Even with this level of redundancies, Dell remains a major employer in Ireland and a major contributor to the economy," she said.
But Kieran O'Donnell a Limerick lawmaker for the main Fine Gael opposition party said the announcement had implications not only for the Dell workers but also for "10,000 to 15,000 jobs in the region" that are linked into Dell.
"Ireland over the past number of years has become extremely uncompetitive which this government has stood over, and this must now by reversed urgently."
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