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Dell and Limerick
Read more about: Limerick East
Dell in limerick is Dells must efficient plant in the world. It is also the lifeblood of Limerick with 3000 employed. Six out of every 100 workers in the Limerick, Clare and west Tipperary region relies either directly or indirectly on Dell for their jobs. That is a significant number. If this factory was lost Limerick and the entire mid-west region would suffer. It is also Ireland’s top exporter. So the recent news of Dells losses must be a worry.
Shares of Dell Inc. plunged to their lowest level in nearly five years Friday after the world’s largest computer maker slashed its second-quarter earnings outlook below Wall Street’s estimates, blaming its aggressive price cutting and a slowing global market.
The sell-off wiped out nearly $5 billion of Dell’s market value in a single day.
The cost cutting measures that Dell are doing are due to a decrease in demand for computers and a price war between Dell and HP. These recent losses may tempt Dell to move away from Limerick and move fully to the plant it is building in Lodz, Poland that will create 3000 jobs directly and another 9000.
If this happens the effect on Limerick can not be over estimated. The likelihood of the 3000 employees finding alternative employment in the area is unlikely. Also with the recent census showing that the governments spacial strategy of failing miserably with the population moving to Leinster serious consideration has to be given by the government about how to cushion the effect of Dell leaving Limerick and also to attached other industry to place outside the pale.
If the pull out happens before the next election the entire Limerick East constituency will be open. Even Will O’Dea might not be safe.
From what I’ve heard, the Dell operation in Limerick makes more profit per head than anywhere else in the world.
Losing Dell would blow a hole the size of gibralter in this economies outlook.
I’m preferring the new look by the way. Very nice.
I can’t take the credit for that. hat belongs to Keith of Talideon.com.
Lads, I’m not sure that Dell made ‘losses’. My understanding is that profits were reduced that is not the same thing as make losses.
Dell in Limerick is Dell’s most efficent plant, which isn’t the same as most profitable, even though it may be that as well.
As with everything else there is a profit/costs relationship which can only be sustained so long, even with high productivity, in the presence of rising wages, inflation, insurance, productivity costs etc.
So eventually its going to be cheaper to locate to Poland (or wherever) even if it means a cut in productivity. And when that happens Limerick and the region will suffer.
Action should be taken now to work with Dell and within the region to see what can be done to help keep costs down and productivity up. Although we seem to have lost control of the first one and increased productivity means long term planning in infrastructure and education and a host of other things which this government doesn’t seem to be capable of.