Dell cutting back in Ireland while gearing up in Poland

 
The American computer manufacturer Dell is eliminating jobs at its main European manufacturing plant in Limerick, Ireland, and gearing up to start production in Poland to cut costs, the Irish Independent newspaper reported.Although the number of jobs to be cut in Limerick is minimal for the moment, and will be achieved by means other than layoffs, the writing is clearly on the wall for the Irish plant. Lower wages and property prices in Poland mean Dell is likely to build up the workforce at its planned facility in Lodz and, over time, reduce Limerick’s. The Ireland and Poland developments come as Dell is cutting costs worldwide to cope with falling sales of desktop computers last year. In June, CEO Michael Dell said the company would reduce its global workforce 10 percent. The cuts would be in all parts of the world, Dell said. On June 13 the company said it would shed 100 jobs in Limerick through attrition and buyouts rather than layoffs. “Dell employs 3,500 people in its Limerick plant so voluntary job cuts of between 80 to 100 people, representing less than 3 percent of the workforce, falls well short of their global target of 10 percent and highlights Dell’s continued commitment to Limerick and the region,” said Reg Freake, a former Dell executive who is president of the Limerick Chamber of Commerce. “The situation could have been a lot worse.”Limerick, the mainstay of Dell’s European manufacturing operation, opened in 1990. Overall, Dell employs about 5,000 in Ireland. The total includes hundreds at the Cherrywood customer service center in Dublin, the largest in Ireland. Dell plans no job eliminations there.The center handles sales within Ireland plus sales to the home-computer market and small-and-medium business market in the UK. “Dell has become one of the biggest exporters and contributors to employment and commerce in Ireland,” Freake said. “However, we mustn’t become too complacent or assume that the economy is rosy.” Dell?s decision to locate a production facility in Lodz is aimed at taking advantage of lower labor costs, property costs and production costs in Poland. Poland also has a well-educated workforce, analysts say.Once the Lodz plant is completed this fall, its workforce can grow steadily to the size of the one in Limerick, according to Iwona Janicka of Warsaw, who is responsible for Dell investments in Poland.   The plant “will play an important role in providing additional capacity to support Dell?s long-term growth,” she said. Lodz is one of the most attractive investment locations in Poland, analysts say. It is a large, rapidly developing industrial, economic, intellectual and administrative center. Early in this decade Mayor Jerzy Kropiwnicki worked with the consultants McKinsey and Company on an economic development plan for Lodz. Since 2005 the city has been following the plan to create entrepreneurial centers in household goods, logistics and other business areas. Estimates are that the new strategy will generate 25,000 jobs by 2010 and 40,000 by 2015. Other international companies that have been located in Lodz in recent years include Bosch-Siemens, a joint venture between Robert Bosh GmbH Stuttgart and Siemens AG Munich, Europe’s largest engineering firms; Indesit, an Italian company that is one of the three largest producers of household appliances in Europe; Gillette, the shaving equipment manufacturer that is part of the American household products maker Procter & Gamble; America’s VF Corporation, the world’s largest clothing company and a leader in jeanswear; ABB, the Zurich-based power- and automation-technology giant; Philips, the Dutch electronics company; Polska Grupa Farmaceutyczna, the Polish pharmaceuticals distributor, and America’s Hutchinson, a world leader in precision manufacturing.