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Dell’s move a big blow to Ireland

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Kai Ryssdal: As if seeding the world’s financial system with subprime debt wasn’t enough, today the American computer industry gave Ireland a sharp poke in the eye. Dell is going to cut 1,900 manufacturing jobs at its factory in Limerick in the west of Ireland. As happens when big manufacturers pull out, the move could trigger thousands more job losses down the line. And Marketplace’s Stephen Beard reports from the European desk in London, that would mean bad things for Ireland’s appeal to foreign manufacturers.

Stephen Beard: Dell has been credited with helping create the Celtic Tiger; the company is Ireland’s largest exporter, accounting for 5 percent of GDP. Today’s decision to shed almost half its workforce is devastating, says Parliament member for Limerick, Jan O’Sullivan.

Jan O’Sullivan: Losing 1,900 jobs, plus a very large number of knock-on jobs in other industries that are ancillary to Dell, is an enormous blow. And there’s really a huge pall of gloom around Limerick today.

Dell says the move is part of a global $3 billion cost-cutting drive. The production in Limerick will be shifted to a new factory in Poland. Maria Kelly of the Limerick Chamber of Commerce accepts the logic of the move. Ireland has become a high cost economy.

Maria Kelly: Dell’s two biggest competitors, Hewlett Packard and IBM, already produce their PC’s in low cost economies and I think we knew it was inevitable that Dell would be moving in a similar way.

But economist David McWilliams fears what he calls “the multinationals’ herd mentality.” They arrived in Ireland en masse. Now Dell could trigger an exodus.

David McWilliams: Once one begins to leave, it almost facilitates the decision, which was in the back of the head of the others, that maybe Poland is the new Ireland. And what we did for the last 30 years, the Poles will do better for the next 30 years.

Today, Dell described the Irish job cuts as a difficult decision, but the right one to deliver greater value to its customers.

In London this is Stephen Beard for Marketplace.

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