Dell cuts 1,900 Limerick jobs
Published 08/01/2009 | 12:08
Computer giant Dell is to axe 1,900 jobs at its flagship manufacturing plant, the company confirmed today.
In a devastating blow for the region, the US multinational will end production at its Limerick factory in the west of Ireland in favour of a new facility and cheaper workforce in Poland.
Dell said the move was part of a three billion US dollar global cost-cutting drive announced last year.
Business leaders in the Limerick region said the knock-on effect of such a massive jobs blow would cripple the local economy, with up to 6,000 other workers in related companies now at risk.
Sean Corkery, vice-president of Dell operations in Europe, the Middle East and Africa, described the cuts as a difficult decision.
"We are proud of our 18-year tenure as a major manufacturer in Ireland," he 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."
Dell is pressing ahead with the swingeing cuts despite personal pleas to the firm's founder Michael Dell by Irish Tanaiste (deputy prime minister) Mary Coughlan and Defence Minister and Limerick TD Willie O'Dea during a trade mission in Texas last year.
The lay-offs will begin in April, with management hoping the 1,900 cuts will be finalised by this time next year.
Dell will continue operating in Ireland with 1,100 workers at the Raheen facility focused on supporting overseas manufacturing through product development, engineering and logistics. The 1,300 marketing and sales staff at Dell's Cherrywood plant in south Dublin will not be affected.
The computer maker is one of Ireland's largest employers.
Established in Ireland in 1990, Dell employed more than 4,500 staff at its height and is the country's biggest exporter and second largest company.
It accounts for approximately 5% of Irish GDP and last year contributed 140 million euro (£126 million) to the mid-west economy in wages alone.
he Dell cuts are being billed as Ferenka II - after the Dutch wire company which shut its Limerick operation in 1977 with 1,400 job losses after growing to become the city's leading employer.
The Tanaiste said she was deeply disappointed by Dell's move to Poland.
"My immediate thoughts and concerns are for the workers and their families and those directly impacted," Ms Coughlan said.
A taskforce has been set up to help those affected in the area, involving the University of Limerick, local institute of technology, Enterprise Ireland, training agency Fas and other state agencies.
"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 of its workforce or the operating environment in Ireland," Ms Coughlan said.
"I recognise that a fundamental change in its business model was considered necessary by the company to enable it to continue to compete in the global market.
"A successful Dell is in our interests as, even with this level of redundancies, Dell remains a major employer in Ireland and a major contributor to the economy."
Ms Coughlan said the Government and enterprise agency IDA Ireland will work with Dell to attract other investment outside manufacturing.
Fine Gael TD and deputy finance spokesman Kieran O'Donnell said workers needed every support available.
"Dell has already taken the welcome step of offering to retrain the workers being made redundant, but this must be backed up by the Government," Mr O'Donnell said.
Labour TD for Limerick East Jan O'Sullivan said: "When the knock-on impact on supplier companies is taken into account, the total job losses will run to many thousand and the economic cost through loss of spending power is almost incalculable.
"This is a black day for Limerick.
"However, Limerick has recovered from economic blows in the past and I have no doubt that, with the political will and the appropriate supports, we can recover from these losses also."
Local TD and junior minister Peter Power urged people to remain positive about the future of the Limerick economy.
"My thoughts today are with the employees and their families who have received notice of the closure of the manufacturing facility and to assure them that any Government support that can be given will be available to them," he said.
President of the University of Limerick Professor Don Barry said college staff have been assessing how the Mid-West region can respond to the expected massive job losses.
"UL has a well-established track record of collaboration with industry and I want to reaffirm our commitment to the role of this institution as an economic driver for the region and the country," Prof Barry said.
"We in UL will do all in our power to enable those affected acquire the skills to rejoin the workforce as quickly as possible."