Sunday, February 25, 2007

After Motorola, is Dell next?

The return of Michael Dell to the helm of the company he founded would seem to herald a renewed focus on lower costs with the target of regaining their position as the No.1 PC company in the world. And what does this mean for Ireland and Limerick in particular?

Despite the protestations that Dell's new plant in Lodz, Poland is for solely for extra capacity and to service new markets it is hard to avoid the nagging suspicion that the intent is to replicate the efficiency of the Limerick plant in a much lower cost environment. A considerable number of the Dell employees in Limerick at present are Polish and this would create a ready made supervisor structure for the Lodz plant should they decide to relocate. It is possible and indeed likely in the event of any relocation that Dell would aim to retain their network research centre which is quite recent and also retain some of the Limerick facilty as a distribution hub for the UK and Ireland. This would still mean job losses running at over a 1,000. Such a event would represent a major indictment of the government's efforts to address competitive costs in the Irish economy and the fact that the lack of competitive pressures has allowed some players in particular sectors to exploit the sweat of others to excess.

Ireland's competitiveness has been eroded over the last 5 years as costs have increased in large part driven by sectors that not, from solicitors to hair dressers, estate agents to restaurants these are the main private sector drivers of increased costs. Yet the state itself stands indited of increasing costs of doing business.

It is hard to avoid a believe that someo commentators can't read beyond the press releases they are given whether by the state or the private sector. When the national broadcaster RTe can't tell the difference between high salaried development jobs being lost at Motorola and new call centre jobs at VMWare you have to question their basic knowledge of the tech sector. The jobs lost at Motorola are those of people with 10/20 years software development experience and somehow RTe are happy to be spun with the notion that call centre/tech support jobs are an adequate replacement.

As someone who comes from a tech background, I've a degree in electronic engineering and a general interest in construction and any aspect of making things, I've always found the lack of awareness when it comes to the technical world that we have to suffer from out friends in the fourth estate worrying.

If someone like Dell were to pull out or begin a process of withdrawal from their manufacturing from Ireland to somewhere like Lodz then I believe it will spell the death knell of Celtic Tiger 1.0. Do we have time or a government with the ability to get CT 2.0 out the door in time to safe our long term growth?


Anonymous said...

There would be far more than 1000 jobs at risk, it would be closer to 4000 I reckon, that is only directly. It would devastate the Limerick/Mid-West region!

Irish said...

Suppliers of all kinds of products and services rely on the Dell contracts. The companies would also have to shed staff if Dell left.

Irish Taxpayer

Dan Sullivan said...

Lads, I agree with ye. I was trying to keep my remarks focused on Dell itself as I'm not sure exactly how many jobs are in fact sourced from outside suppliers but are actually working inside the Dell plants in Limerick. I know it is in the thousands though. I think the government is being shockingly ambivalent about the recent job losses.

Electronic Product Engineering said...

This world without a doubt is in turmoil. I mean with the US predential election leaning more towards CHANGE, Im just curious to see exactly what will be done.

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