Limerick tale that’s just not funny
17 November 2008
Back in September, EMTww reported that Dell was outsourcing production in a bid to cost-effectively build computers (Outclassed and outsourcing). Since then, it has been rumoured that the Dell facility in Raheen, Limerick, the country’s biggest merchandise exporter, is to make 700 temporary positions redundant.
With approximately 4500 people employed in Ireland by Dell; 1300 at a sales and marketing plant in Dublin and over 3000 in Limerick, this is a large percentage of the workforce. As well as this, an EMS supplier to the computer giant, Flextronics, has been in the news as they have announced plans to cut 118 jobs in Ireland.
So has Ireland lost its appeal, or is this just a familiar story that could occur anywhere in Europe? It has been said that the reason for cut backs is due to restructuring during the global economic downturn, but is this just a convenient excuse to shed jobs?
It has been reported that Michael Dell was in China last month to seek business opportunities in the Chinese market. Apparently, the company's procurement in the country will total about $70 billion in 2009.
IDA (Industrial Development Agency) Ireland states that the country is home to companies such as Intel, Microsoft, HP, Apple, Google, and others, but a recent survey by the agency stated that 61% of a sample selection of companies claimed that they would re-locate to Eastern Europe. Nearly a quarter (23%) said that they would move to India. It seems that the high cost of doing business in Ireland and the country’s apparently poor infrastructure were cited as being the main reasons for a hypothetical re-location.
Questions have to be asked about the other large investors in Ireland. Last year, EMS provider Sanmina-SCI undertook a €30 million investment for the transformation of its Fermoy facility in County Cork to transform it into a manufacturing and design centre for the medical industry. Supported by IDA Ireland, the investment created around 50 new positions, and the facility employs 400 permanent employees and 200 temporary employees, making it the largest medical unit within Sanmina-SCI. But are these jobs safe in the current economic climate?
As for Celestica in Galway, and other EMS companies, will the east prove to be more appealing than Ireland? Only time will tell.
This week’s leader was written by Paul Wolfe, EMTww’s Assistant Editor.
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