Dell gone
Read more about: Munster 
Newswire is first to break the news that the Dell plant in Limerick is going to close in 2010. 1,900 job loses. I would guess around 10,000 jobs in the region could be gone as well. This is also Irelands biggest exporter so I guess our balance of payments is also taking a massive hit.
Edit by Cian @ 10:55: The WSJ had this a few months ago – there was time for action.
Just to add a few figures;
In 2006 Michael Martin estimated the value of Dell as a contribution of at least 5.5 per cent of Irish exports, 2 per cent of GDP and over 4 per cent of all expenditure in the Irish economy.
According to Mark Hennessey before Christmas, “the contribution which has been made by Dell to the Irish economy from its operations in Limerick and Bray, Co Wicklow, is extraordinary: at least 5.5 per cent of Irish exports, 2 per cent of gross domestic product and more than 4 per cent of all expenditure in the economy.”
While Dell’s pullout could yield a net decline of 5% or so of GNP an interesting conversation at The Property Pin highlights that that is a notional impact on our economy since Dell kept the money but the multiplier impact and the corporation tax impact could be much much worse.
Wow, yea, just looking, were first at 9:17 AM. Hard to be excited about it though..:-(
Actually it will be 10002. The government have abondoned Limerick and left the Polish government win these jobs with massive grants. O’Dea and Power are F**KED. What’s the record for most votes lost from one election to another. O’Dea will go from record first preferences to fighting to retain his deposit. Power will be lucky if anyone outside his family votes for him.
after the years of speculation and denials, this is not unexpected. It is horrible news for Limerick and the mid-west region. Following the collapse of Waterford Crystal and now Dell it leaves the regions on the brink.
The move has been suggested for years, workers have feared for their jobs since Poland was announced – surely there was enough time to get a strategy together? Its probably not the time for political recrimination with so many lost jobs but many will be (rightly) asking why more wasn’t done. And done earlier.
I cant help but agree with Colm, O’Dea and Power are in trouble – but this will hit the party as a whole. They have moved from presiding over boom to watching firms pack up and leave or pack in altogether.
I remember blogging about dell living for the plant in poland in 2005. http://dossing.blogspot.com/2005/11/death-of-limerick.html
http://www.breakingnews.ie/ireland/mhsnmhojojoj/
If I hear Coughlan say one more time that she is “disapointed” with the job losses I am going to slap her. Say you are fucking angry woman – show some signs of actual emotion, like some bloody compassion for the hoards of poeple in the South West who just lost their jobs.
She really is a dope.
And only a dope would spell disappointed wrong.
Just like construction, we should never have been so dependent on them in the first place.
I believe Keith the orginal plan to get foreign industry in back in the 1980s by I think Des O’Malley was that we would bring them gain expertise and then come up with our own companies. i.e. Dell comes in people learn how to run a computer company then start an Irish one. Alas we came to comfortable the government will take alot of the blame for these companies pulling out and their will be more but we as a nation have to take some of the blame. We got to comfortable all these high tech companies and how many spin-offs created by people who used to work for them?
I agree, and we also let our Universities turn into trumped-up vocational schools too, pouring out more and more unimaginative one-trick ponies, which meant there were few people with the ability or imagination to take the entrepreneurial step (even if not as a founder, but an early employee) and create native companies to buffer the country against the inevitable.
The litmus test of a good software developer is that they have personal software projects they work on during their own time and/or contribute to open source projects. I’ve met a painfully low number of people in my own area in this country who do either, and that does not bode well for Ireland, at least as far as software development and its related industries go.
The older among us may remember the devastation when DEC left Galway. But that happened at a very different time when the DEC alumni were eventually able to get other IT jobs and Galway was perhaps stronger for it. This is happening to a more depressed city at a much more difficult time for the global economy.
The sky is falling.
Business follows the market. Unfortunately, with laptops being sold even in supermarkets, it has become clear for some time now that Dell had neither the market nor the products to meet the needs of the market. I am sure that if they do not make radical changes to their product and sales methods their market in Eastern Europe won’t last either.
I am writing this on an Acer netbook using neither slow and virus-prone Windows or a hard drive. It is truly a beautiful machine with everything necessary for most home users(even a workable word processor and spreadsheet built-in) and it is half the price of an average laptop. I heard that Dell is going to produce a netbook but I haven’t seen it.
I worked in an Irish IT (software design for consumer electronics and communications) company that was doing very well until the dot com burst in 2001. After that the company never recovered. The entire landscape changed rapidly – the use of low cost locations accelerated (it was already under way before the dot com burst but really gathered pace after it). Potential customers would reject our bids saying we were way too expensive – even though we had a proven record for quality. Instead the company began losing bids to India, the Czech republic, poland, Serbia. An unfortunately this all happened at a time when Irish costs (from utilites to rent) were rising rapidly. The result was that the said company continued to struggle and in the end began to shrink. It opened an office in Eastern Europe which is now bigger than its Dublin office. Over the past 6 or 7 years the effect for the employees was wage freezes (and for a time wage cuts). I recall I plotted my inflation adjusted wage over about a 6 year period. It had declined about 15% – despite my having an extra 6 yrs experience. And this is a company that is not in manufacturing but is in the so called “value added” area. The company I’m talking about is still going but is struggling and Dublin based employees think that over time the Irish office will just be phased out.
When I think of Dell and people saying ‘well, it’s manufacturing, it was inevitable’ I say watch out, first it was factory jobs in the non tech area I(like fruit of the Loom), then it was the manufacturing in the tech area such as Dell (though there were thousands of others that went more quietly – in 1997/8 Nortel had over 600 manufacturing jobs in Galway and another 1000 near Belfast, now only a few hundred R&D remain.) But now the problem is moving to the high value area – there is no reason why Eastern Europe and Asia cannot provide these services – and they do – except at about half the price.
This does not mean that all Irish exporting companies in high value are doomed. But in my opinion there is a danger there that they will be badly affected over the next decade. In other words, this big notion that we will quickly evolve to a ‘knowledge economy’ and transform Ireland back to the ranks of the top economies is probably more based on fantasy than fact.
It is pretty obvious that this story is part of the bigger picture of globalisation where certain very large emerging economies have played a rapid catch up in terms of their industrial capability. It’s a kind of belated and hyper industrial revolution happening in some of the hitherto undeveloped economies. That’s a simplification, but I think it gets close to what is happening. The result will be (over a long period, perhaps 30 or 50 years) that there will be a dramatic evening up in the balance between what were developed and undeveloped countries. It seems likely to me that the phenomenon will be more than likely volatile and uneven. And it certainly will cause significant harm to the standard of living in the West (though the corollary is much improved conditions in what were undeveloped countries). Looked at objectively, it seems a development that is thoroughly fair and not before its time, but that is hardly much consolation to those who are directly affected.