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Bad news coming for Limerick?
Read more about: Economy, Limerick East, Limerick West
And the overall economy? Today’s Wall Street Journal reports on what sounds like advanced deliberations inside Dell about shifting its manufacturing capacity from Limerick to Lodz in Poland. Office jobs in Ireland would be retained. But as the article explains, Dell is unusual among computer makers in its retention of substantial manufacturing capacity — most of the others have already outsourced a lot of the actual making of computers to cheaper locations. Dell is now seemingly in major reconsideration of this model (and the constantly dislodging D and I keys on my own Dell make me think it’s high time). One final point: note that for all the attention our corporate tax rate gets in the Lisbon debate, it’s not a trump card. Poland is much closer to big European markets and key shipping routes, and has labour costs far lower than in the Republic. Not that we don’t know it, but challenging times ahead.
That story is kind of an after story reporting on the reaction to the original story that previously appeared in the Wall St. Journal. Thing about moving to Lodz is that the Lodz plant while working from a lower basic cost base is proving much harder to get up to capacity than Dell expected. I don’t doubt that selling the Dell manufacturing capacity is on the cards, but it would make more sense for Dell to sell the vast bulk of their capacity and retain only what they need to do proof concept stuff. I would reckon a US site would be best for that but you never know they could plump for Ireland in that mix. It’s a bald fact that for all the higher cost base in terms of transport and salaries the Limerick plant is one of Dell’s most cost efficient and productive.