Dell: The “Ripple Effect” begins
Dell EMF 3 in Raheen
Feel free to carry on discussion relating to Dell’s announcement here in the comments.
UPDATED: 0020 hrs: A cursary glance at the front pages of the morning’s papers thanks to the Vincent Browne Show leaves no doubt what the big story is today.
10,000, the number screams out of the front page of the Examiner. The number represents the estimated job losses following yesterday’s announcement by Dell Computers to end manufacturing at it’s EMF plant. The 10,000 are the people working for companies which are contracted by dell, or who have benefitted from the hundreds of millions of euro poured into the local economy by Dell’s employees.
The story makes the front page of the Independent, where it says that a massive €7 per hour is the difference between wages at Limerick and wages at Lodz in Poland.
I will have more a more detailed look at the papers when I get my hands on them.
Meanwhile, employees of RR Donnelly, formerly known as Banta Global Turnkey, have informed TV3 news that they have been told that their jobs are now on the line.
RR Donnelly is one of numerous companies who have dell as either their largest customer, or their only customer, and employs upwards of 700 people in Limerick.
UPDATE 0055 hrs: RTE’s Prime Time feature is now availible online.
Employees are definately not happy with the severance package, as can be seen from employee Eamon Ryan’s comments.
In semi-related news, the EU is carrying out an investigation into the awarding of a €53m grant from the Polish government to Dell. If Poland is found to be in breach of state aid regulations, it will be prevented from making the payment to Dell.
However, the investigation will take up to six months to carry out. It began in December of 2008.
UPDATE 1900 hrs: The Dell jobs losses features prominently in the tabloid papers also. The Daily Mail warns of a further 1,500 job cuts following yesterday’s announcement. The paper also slates the Tainiste, Mary Coughlan for being “too busy” to visit Limerick at this time of crisis.
The Daily Star reports on the suspicious payment by the Polish Government to Dell which is under investigation by the European Eunion authorities. The €52.7m payment is suspected of being in breach of competition law.
Back home, the IDA has tried to play down claims made by Defence Minister Willie O’Dea that the organisation is trying to secure 750 new jobs in Research and Development and customer care at Dell. The head of the IDA has told the Limerick Leader that it is too early to speculate on the number of jobs being sought. He also tells them that a number of other countries bidding for these jobs, however it is hoped that Dell would be “more sympathetic” to Limerick
Press releases: As numerous press statements are coming in, I will publish them in their entirety for you to read below the fold. Any non-statement updates will be published above the fold. Any politician wishing to have their statement published below should send them to editors@limerickblogger.org
Limerick County Council Green local Election candidate, Trish Forde Brennan
Green Party Representative, Trish Forde-Brennan, is calling on Green ministers, John Gormley and Eamonn Ryan, to give special priority to Limerick in terms of infrastructural development and in the investment of Green Businesses.While training will help Dell employees to find alternative employment, the reality is that jobs do not exist for many.Taking into account the knock-on effects to other ancillary businesses we must generate new modes of employment.I will work to persuade my Green colleagues to make Limerick the national centre for energy research & development and energy -related employment.
Fine Gael Limerick City Councillor and former City Mayor, Diarmuid Scully
Three years ago, during my term as Mayor of Limerick, I asked for and was granted a meeting with two senior executives in the IDA to discuss the economic development of our city. There was only one item on the agenda – Dell’s plans to locate a manufacturing facility in Eastern Europe and its potential impact on employment in Raheen.
The IDA was fully aware of the reality of the threat. They expressed the view that in the longer term it would be extremely difficult to retain manufacturing jobs in Limerick. Their strategy – in 2006 – was to work with Dell to increase the number of high end jobs in Raheen and to try to ensure that the inevitable loss of manufacturing jobs would take place slowly, over time, so that the wider economy in the region would be able to generate sufficient employment to absorb those workers leaving Dell.
The first part of that strategy appears to have worked. 1,000 non-manufacturing jobs are being retained. The second part is in tatters. The sword has fallen at the worst possible time for Limerick. Before this announcement, our city was already in the grip of a savage recession. Unemployment in Limerick city in 2008 rose at a faster rate than anywhere else in the country. By November it was already back to the levels it hit in the early 1980s.
With the Dell announcement, and the loss of up to 5,000 knock-on jobs, the number of unemployed in Limerick is almost certain to reach its highest rate ever.
To prevent a total catastrophe, the government must act now. There are a number of simple steps they can take to protect Limerick and the Mid-west, but they will require leadership and imagination – two qualities in shockingly short supply at the moment.
They should:
- Fund Regeneration. This €3billion project has been put on ice by this government. The plans are in place, but the money is not. Regeneration has the potential to create many hundreds of jobs in the construction industry. The knock-on effects would do much to limit the wider economic damage done by the Dell closure. It also makes good economic sense to build now when construction costs are falling.
- Protect homeowners – Ban repossessions. Many of those who have lost their jobs now stand to lose their homes as well. This cannot be permitted. We the taxpayers have bailed out the banks. As part of the re-capitalisation programme, the government must insist on a complete moratorium on the repossession of people’s homes.
- Reform Back To Education Allowance. Until our cost base is significantly reduced, it is unlikely that we will be able to attract large scale manufacturing into Ireland again. Those losing their jobs in Dell will need to re-skill for other careers. The BTEA as it currently stands is too restrictive. Many Dell employees are graduates. The only postgraduate courses open to them under the BTEA are those leading to a teaching qualification. Other relevant courses should be permitted and second qualifications in a different discipline should also be permitted.
- No two tiers of job seekers. The Dell severance package may not be overly generous but others will be worse. Those workers in retail and other service industries who lose their jobs because of the knock-on effects of the Dell closure are unlikely to receive anything above statutory. The supports now being offered to Dell workers should be offered to all job seekers in region.