Dell Closes Ireland Plant; 2nd Largest Employer

Wide Angle writes in with a PBS report on tough economic news from Ireland: Dell announced that it will relocate its manufacturing plant in Limerick, Ireland to Lodz, Poland. "Dell's announcement... is a severe blow to the Irish economy, which has been hit hard and fast by the global economic crisis. Dell is Ireland's second-largest corporate employer and the country's largest exporter. Nineteen hundred shift workers will lose their jobs. ...Dell's closing is not a result of the economic downturn, but of a pattern all too familiar in the United States — corporations' perennial search for cheaper labor. Since 2000 several companies, such as Procter & Gamble, Intel, Gateway, and NEC Electronics, have moved manufacturing jobs from Ireland to China, Eastern Europe, and elsewhere. When Poland joined the European Union in 2004, it became an attractive place for companies to set up manufacturing plants. ... However, Ireland has managed to maintain and attract... 'knowledge-intensive jobs.' Google's European headquarters are based in Dublin, and Facebook announced late last year that they would locate their international headquarters there. But the overall economic picture for Ireland is bleak."

Comments

willingness to relocate

[bugs2squash]

Perhaps Eire should have factored in that companies agile and willing enough to relocate once to Ireland would likely be sufficiently agile and willing to move to follow the sun again.

Re:willingness to relocate

[Anonymous Coward]

Everyone in Eire with half a brain knew this was coming anyway...
Those relatively low tech manufacturing jobs were only ever going to be useful as a means of bootstrapping ourselves into a properly high tech economy.
Not sure the government knew this, but everyone smart working in tech did.

Re:willingness to relocate

[spun]

This is what happens when capital and goods can freely cross borders but people can't. Capital will simply chase poverty in a never ending circle around the globe. When one poor, desperate country starts to get wealthy, corporations will simply move to the next one, and let the first slip back into poverty.

Re:willingness to relocate

[Shakrai]

This is what happens when capital and goods can freely cross borders but people can't. Capital will simply chase poverty in a never ending circle around the globe. When one poor, desperate country starts to get wealthy, corporations will simply move to the next one, and let the first slip back into poverty.

So what's the solution? If you get rid of the restrictions on people moving you destroy national sovereignty and identity. If you get rid of free trade/adopt protectionism you drag the economy down a few pegs and probably destroy at least as many jobs as you save.

I hate what we've become but I'm at a loss for how to fix it. Ideas?

Re:willingness to relocate

[spun]

I don't see how dropping restrictions on people moving will necessarily destroy national sovereignty or identity. If a country has a strong and vital government and cultural identity, they can certainly retain control and identity even with an influx of new citizens.

Re:willingness to relocate

[bugs2squash]

I think that Irish citizens could move to Poland if they wanted to.

Besides, what you say is to be applauded, eventually the corporations will move around to even the poorest contries. Then the only way they will be able to make themselves poor again is by waging war or grossly mismanaging their governments (per the US model).

Re:willingness to relocate

[Shakrai]

I don't see how dropping restrictions on people moving will necessarily destroy national sovereignty or identity.

If you tell a Government that they can't control how many people cross their border is that not by it's very definition a restriction on national sovereignty?

How would it help anyway? How many Americans would really want to move to India when their job gets outsourced? How many Irish would want to move to Poland? Leaving aside the lower standard of living (compared to the US) in most places where jobs are outsourced what about language and cultural barriers?

Re:willingness to relocate

[Anonymous Coward]

So Ireland should just do whatever EU leaders want? If the rest of us in europe were given a vote, I doubt Ireland would have been the only one to reject it.

Re:willingness to relocate

[lee1026]

Problem is, the number of poor countries that are stable enough to invest in is not large, and once a country becomes a wealthy, it rarely slides downwards very far. Thus, this should end relatively soon, as soon as corporations run out of countries.

Re:willingness to relocate

[Shakrai]

You say "destroy national sovereignty" (and all of the restrictions therein) like it's a bad thing.

You see restrictions where I see freedoms. Globalization has already created a race to the bottom for labor and environmental standards. Will our freedoms and rights be next in line? Will the United States be forced to adopt European restrictions on free speech? Will Europe be forced to adopt Islamic restrictions on free speech? Will the United States, Finland, Switzerland and Norway be forced to adopt stricter gun control laws?

Re:willingness to relocate

[Idiomatick]

Well they are both part of the EU so gp is wrong you can move from ireland->poland for free.
Secondly, It is a GOOD thing that business' chase poverty! Something shitty happens to a country and big countries move in which will act to save their asses. Ireland will not become poorer than Poland because of this, as the summary says they are retaining higher paying post-secondary jobs. This could be rewritten to show how ireland is moving up in the world. Now they don't NEED the Dell jobs (atleast not as much as Poland does). This if left unfettered causes an equalization of wealth. Which is a fair thing, a good thing unless you happen to currently live at the top.
 
We on /. like to bitch about India stealing our jobs but really they need them more than we do. Think of it like global charity except they have to earn the money.... and it is involuntary. Try to see some of the good :/

Re:willingness to relocate

[YesIAmAScript]

"Eire and Poland"?

Why half pedantic?

You mean Eire and Polska I guess. Or as most of us know then, Ireland and Poland.

Re:willingness to relocate

[Bertie]

Actually Limerick's at least as much of a poverty-stricken dump as many places in Poland, and stuff like this will only make it worse.

Ireland has seen a lot of development and increased prosperity over the last while, but things like this show how transient that can be if you're too dependent on outside sugardaddies providing that prosperity. It's easy come, easy go for the organisations providing the jobs - if somebody else turns up with a bigger development grant and a workforce with lower wages, moving won't cost them a thought.

The trick is to take the inward investment and use it to build up your skills base so that ultimately you can stand on your own two feet, but that's a whole lot easier said than done. Places like Taiwan have done it rather beautifully, and Estonia, financial troubles apart, seems to be on the right track, but it's tough.

Re:willingness to relocate

[Anonymous Coward]

To a "recruiter" in Bangalore, the United States looks like one homogenous entity with few cultural distinctions among locations. I tried to explain to a recruiter why I would not be interested in Salt Lake City Utah (e.g., relocating there from San Diego California where I already had a mid-career level job), but she could not understand the basic issue (Salt Lake City being a place where a person of my ethnicity, social idiom, and core beliefs will be less comfortable.)

Would the story be different if Dell were an Irish, or even a UK company? Why can't HP compete?

Re:willingness to relocate

[ckaminski]

Unfortunately, local governments usually give huge tax breaks to corps looking to set up shop - so you lose that ability to bank "found" money and foster local industry growth.

Re:willingness to relocate

[Shakrai]

The sooner we get rid of the petty tribal "us vs them" mentality we get from all the imaginary lines we've drawn on our globe, the better.

Those imaginary lines are a lot more important than you think. My country guarantees me several freedoms that other countries (or even the UN Declaration of Human Rights) don't provide for. You'll have a hard time convincing me of the wisdom of getting rid of those "imaginary" lines.

Re:willingness to relocate

[Manchot]

Both Eire and Poland are in the EU, free movement of people is guaranteed.

That's easy to say, but not so easy to do. Consider the following:
1. Moving usually incurs a huge cost, both in terms of time and money. When you're moving out of the country, those costs are multiplied.
2. Moving is stressful, and most people don't like forcing that on their family.
3. The social costs are high. You'd be leaving your friends, most of your family, and basically everyone you know behind. There's a reason that most people live within driving distance of where they grew up.
4. You'd have to learn Polish.

So yeah, while you're "free" to move, you're only free to do so if you're willing to accept all of the above. I think that point #3 is the most salient one, simply because humans are social beings and while the social costs aren't easily quantified, they're easily the dominant factor for most people.

Re:willingness to relocate

[Shakrai]

What we do now is offset this drain on the economy (overall inefficiency) by outsourcing a lot of the production which allows you to actually purchase the products you want and need.

And when you outsource all of that production and gut the middle class whom is going to be left to buy your products? Playing devils advocate here but I've lived in an economically depressed region my whole life and I have yet to see any benefits come to my region from free trade. What I have seen is a lot of jobs shipped to Mexico (thank you NAFTA) and very few jobs coming into town to replace them.

Re:willingness to relocate

[causality]

You say "destroy national sovereignty" (and all of the restrictions therein) like it's a bad thing.

You see restrictions where I see freedoms. Globalization has already created a race to the bottom for labor and environmental standards. Will our freedoms and rights be next in line? Will the United States be forced to adopt European restrictions on free speech? Will Europe be forced to adopt Islamic restrictions on free speech? Will the United States, Finland, Switzerland and Norway be forced to adopt stricter gun control laws?

What really bothers me about governments and large organizations in general is that they fail to understand the saying, "no matter how far down the wrong path you have travelled, turn back." Governments almost never say "this sounded like a good idea at the time but it's just not working, things are getting worse, time to abandon this idea and try something else." If they do say that, it's over the course of decades or sometimes centuries even though the knowledge of better solutions (or at least that this solution isn't working) has been around for a long time.

I wish there were some type of initiative/referendum that citizens could use to challenge laws, not because they are unconstitutional or otherwise legally invalid, but because they have failed to deliver the results that were promised. If there were a way to get rid of otherwise legally valid laws that can be objectively proven to be counterproductive, not because enough voters put enough pressure on the legislators to repeal the law, but because at least one citizen can rigorously prove that it has failed, this would represent real progress.

Re:willingness to relocate

[EastCoastSurfer]

eems like by preventing jobs from leaving the country, the company itself may not earn as much, but you've saved jobs within your own country. That's in my eyes, and anyone who is not a shareholder in said company and selfish, more important. Assuming that the company is going to use the money it saves to reinvest in your home country is not a sure thing to me.

Here's the problem. Assume a company employes 50 people making widget X. It costs the company Y$ so they sell it for Y$ + % profit. Widget X is used by the whole country.

Now, it's suddenly cheaper to make widget X in another country, so the company moves its operations. By doing this the 50 people lose their jobs, but now the entire country gains the use of widget X for a lower price than before. For a short time it sucks for those 50 people, but in aggregate society is paying less for an item which frees up more money for investing that one hopes would lead to jobs that would hire back those 50 people + more.

If you don't let the making of widget X move (or tax it so it's like it didn't move) you continue to support an inefficiency. The entire economy now supports this inefficiency for the perceived benefit of 50 people, when in the long run it's better for the whole economy and probably for those 50 people to lower the price of widget X.

It can be argued that this cycle is not one that can go on indefinitely, but it's a cycle that has risen the standard of living around the world for quite a long time.

Re:willingness to relocate

[Shakrai]

I wish there were some type of initiative/referendum that citizens could use to challenge laws, not because they are unconstitutional or otherwise legally invalid, but because they have failed to deliver the results that were promised

Well there is one way but people seem too stupid to utilize it. They'd rather keep voting in the incumbent because "he's done good things and has experience" or just blindly vote for the guy who shares the same party affiliation as them. Those of who are smart enough not to do this have our votes buried by those who aren't or by rigged electoral processes (gerrymandering in the US, I'm sure other countries have their own version).

Re:willingness to relocate

[bnenning]

If Free Trade worked, Mexico, America, and Canada would be doing better today then they were in the early 1990s

Citation needed. If protectionism worked, North Korea would be the wealthiest nation on earth.

Yes, it's class warfare. But the war is over, and the middle class has lost.

Yeah, just look at all those homeless people huddling in Apple Stores.

Re:willingness to relocate

[Anonymous Coward]

If you're speaking in English, call it Ireland.
If you're speaking in Irish, call it Eire.

Don't mix and match in what was probably an attempt to sound intelligent and learned.

Actually, call it Eire to distinguish that you mean the republic as it states in its constitution as opposed to the entire island.

Re:willingness to relocate

[pla]

Those imaginary lines are a lot more important than you think. My country guarantees me several freedoms that other countries (or even the UN Declaration of Human Rights) don't provide for.

No. YOU (and I, and any Slashdot reader from a modern Western democracy) have granted certain rights to our governments in exchange for them making certain aspects of our lives easier and safer. The governments of the world have no actual rights they can ever grant us, only rights they can (try to) take away.

Now, I will agree with you that many cultures do not hold dear many of the freedoms we normally take for granted... But that has more to do with fear and ignorance than the position of any given line on a map... Simple example, radical Islam and Evangelical Christianity. Both want scarily similar restrictions on personal freedom, but only one (the last eight years in the US aside) uses the mask of national sovereignty to lend itself some pretense of legitimacy.

Re:willingness to relocate

[Shajenko42]

For a short time it sucks for those 50 people, but in aggregate society is paying less for an item which frees up more money for investing that one hopes would lead to jobs that would hire back those 50 people + more.

I think I see the problem with your argument.

Re:willingness to relocate

[boteeka]

Now, it's suddenly cheaper to make widget X in another country, so the company moves its operations. By doing this the 50 people lose their jobs, but now the entire country gains the use of widget X for a lower price than before.

Wouldn't it be nice if it were true? Sadly, the truth is that probably the price would stay where it was, and the profit % would increase. Everybody in the company's management happy.

Re:willingness to relocate

[gkai]

Sorry, I do not believe this is true, even if it is the standard economic explication of relocalisation.
What I believe is that relocating jobs to to cheaper places is akin to thermodynamics: there is no global increase, but a leveling...and as long as a non-equilibrium exist, it can be exploited to produce work, i.e. enrich the ones that have the decision power and are not trapped in one legal system - i.e. large supra-national conglomerates.

So what we have now is middle class of western countries getting slowly poorer, a slow creation of a new middle class in some non western countries, and a very few world "elite" getting richer quite fast. Income ratio between the most and less wealthy in western nation is spreading steadily since the 70ties...

Imho, the standard of living around the globe (for western world) has been increasing mostly because of 2 things:
- technical progress and cheap energy: one average man hour can produce much more goods that it used to...but this is leveling lately (energy less cheap because it is no longer in infinite supply, technical progress lacking a new revolution, electronic is maturing, and biotech/nanotech not yet), and it is a potential source of unemployment.
- using the demographic growth for a global credit: the debt of today will be paid by the people of tomorrow...which will be more thus will have to pay less...
There is no more demographic growth in western countries, and it is levelling up fast globally - fortunately because here too we are getting closer to hard limits. In fact, demographic decrease and/or population aging means that people of tomorrow will be less for sharing the debt created by more people today - oups.

The pyramidal scheme is collapsing...and, as always in those case, I fear that the end result will not look pretty...

The Race to the Bottom

[HockeyPuck]

We the consumer, demand cheaper priced products, why should we be surprised when manufacturers look for methods of reducing their costs? You don't exactly see them firing up manufacturing plants in Tokyo or Manhattan.

It's a Global Economy, get used to it.

Re:The Race to the Bottom

[_Sprocket_]

We the consumer, demand cheaper priced products, why should we be surprised when manufacturers look for methods of reducing their costs? You don't exactly see them firing up manufacturing plants in Tokyo or Manhattan.

Corporations also demand more profit. Reducing costs helps that bottom line. Whether moving manufactoring locations ends up positive on that bottom line or not isn't always clear at the outset.

It's a Global Economy, get used to it.

It's been a global economy for decades. That's not the change.

That's fine

[Chrisq]

That's fine as long as you have a job to pay for it. If all the manufacturing and knowledge based jobs end up in the cheaper locations then can the Western Economies keep going. I know that many economists say that it is the beginning of the service economy, and we can all be rich in the west by buying and providing services for each other but I am rather skeptical. If a whole country consists of PR teams, lawyers, restaurant owners and so on can they really "generate" enough money to be able to buy their "real" things from cheap overseas sources?

Re:That's fine

[Joey Vegetables]

The distinction between "manufacturing" and "service" jobs is somewhat artificial. Every step in the manufacturing process is a service. Finding raw materials is a service. Getting them out of the ground is a service. Refining them is a service. Transporting them from place to place is a service. Assembling them together into a finished product is a service. Making the machines to do so is a service. All of these are services; "manufacturing" is simply a convenient shorthand to describe those services whose end result is an assembled physical product, as opposed to the many other services whose end result is not.

Thus, the fact that we have a service-based economy is not in and of itself a problem, provided that our services are sufficiently valued in world markets to purchase the manufactured goods we need as well as the other necessities and wants of life. It is a problem ONLY if our skills, or the products that are created using those skills, are no longer sufficiently valuable to earn us the kind of living we want, in which case, the obvious remedy (which scales up) is to learn new skills.

Re:That's fine

[mark72005]

That's fine as long as you have a job to pay for it. If all the manufacturing and knowledge based jobs end up in the cheaper locations then can the Western Economies keep going.

I hope the textile industry never moves out of the united states.

I don't see how the US economy can keep going if all the woolen mills and shirtwaist factories shut down and take their jobs overseas.

Re:That's fine

[bugs2squash]

I guess one of the criticisms leveled at geeks is that they think they know everything...

So in that spirit, here's my "expert" analysis of world economic matters !

Isn't manufacturing computers just a service ? If you were Martha Stuart, you'd just get up early and grind-up the sand from the beach yourself to make your own CPU.

To my mind there's scant economic difference between a janatorial service and a manufacturing "service".

Furthermore; a janitor's job has to remain local and the janitor must be retained to keep the place sparkly, as opposed to a one-time manufacturing process for a durable item.

Janitors are an extremely high-value service, that's why so many of us have a personal computer built for us but don't have our houses cleaned for us.

Re:That's fine

[hairyfeet]

The problem is (to quote a certain big eared Texan) that "giant sucking sound" which is of course all your money going out while almost none of it ever comes back. Those countries in the third world like India and China simply aren't going to buy enough of your "services" to come anywhere close to balancing out. And frankly basing so much of our future on things that can be copied for almost nothing like that "IP" crap is a recipe for disaster. From what my friends who are from there or who have gone their for business tell me NOBODY buys actual movies, software, games, etc. It is pretty much ALL bootlegs.

Hell we don't really make anything here anymore. Our electronics, our durable goods, hell even the clothes on our backs are from overseas. Do we even make the bullets for our military anymore? What are we going to do when the world doesn't want any more dollars because the fed cranks them out by the truckload? Frankly all this globe hopping helps no one but the giant multinational corporations, who can simply walk away when your country hits the skids. And as for learning new skills? How are you going to compete with someone in India who can get a masters degree for 20K when yours costs 150k+?

Good for Poland

[exhilaration]

Poland has very high unemployment rate, one of the highest in Europe, and is also one of the poorest countries in Europe.

I realize that this sucks for Ireland but Poland is in far worse shape and needs the jobs just as badly if not more.

Make 'em pay

[Frosty Piss]

The fact is, since China has the unfair advantage of near-slave labor, the rest of the world as a whole needs to have stiff import tariffs to equalize this imbalance.

This really shouldn't be completely about the "world economy" and if it can be done cheaper in China, "why not"? It is completely fair to take into account other factors such as China's complete disregard for workers rights and environmental issues, not to mention truth in labeling with regards to all the poisons they put in food products.

Make 'em pay, it's the only way to get their attention.

Re:I don't care who slaps together my inspiron

[MightyMartian]

Having spent over an hour and a half on the phone with Dell Canada on Monday just to get a quote (and a quote for twenty computers I might add), I'd say there is such a thing as "too cheap".

Less taxes.

[diskis]

The 10 year discount is up. That's why they are moving, and Dell isn't the only corporation doing this. Ireland has a low corporate tax, and discounts it even further for the first 10 years a corporation operates there.

Where are all the free market whiners?

[Anonymous Coward]

Ireland has been the strong argument lately as to why the US needs to stop taxing business so much. How's this crow taste?

This is just more evidence to the idea that companies will always game the system because there will always be some country out there that provides them the opportunity. Should the US really restructure its tax base to compete with the ever expanding global market, or should we just admit that we've got more priorities to take care of than some smaller nations that can make these deals and just go about our usual routine?

Re:POTATO FAMIN!

[Anonymous Coward]

(Score:-5 Offensive)

Re:I don't care who slaps together my inspiron

[Shakrai]

I can't wait to see what happens when our economy takes such a nosedive, and unemployment becomes rampant that companies start moving jobs here since our labor is so much cheaper than china, india, taiwain, etc...

Actually our economy won't get that bad but a lot of economists were talking about what $200-$300/bbl oil would do to free trade. At a certain point it will become more expensive to ship goods than to just produce them here at home. The various economists and talking heads all disagreed as to what that point was but all agreed that it would happen sooner or later if oil prices had kept skyrocketing.

Of course the economic meltdown has dragged oil down but how long is that really going to last?

Global Economy == Global Poverty and Ruin

[mlwmohawk]

A number of years ago I read an essay about countries and states offering concessions to multi-national corporations in order to get manufacturing jobs.

The executive is this:

Companies will take what they can, exploit all the benefits, and when it makes financial sense to move they will. This "cut throat" capitalism will lead to utter destruction because all it does is drive down wages world wide.

Over time, some people in 3rd world nations seem to get less poor because they have "jobs." The previously better off economies, however, deteriorate because the working class income deteriorates. As the economic powerhouses like U.S.A, Europe, and Japan start to falter, the world wide market starts to falter, and companies start to close factories. As the factories close, the working class has even less money causing more factories to fail. Eventually, even the 3rd world factories don't make sense and the previously "less poor" return to their original poverty level, except that the world wide economy has been destroyed. All the capital ends up in the hands of a very very small number of people.

I'm kinda worried that it wasn't just an over imaginative worst case scenario.

Re:Global Economy == Global Poverty and Ruin

[IamTheRealMike]

You're kind of assuming that:

1. People in the West won't find new jobs to replace the ones that left

2. People in developing countries somehow are only capable of making things for export

Who cares?

[PinkyDead]

Ok, maybe that's a little blase, but there are two points that have to be considered here:

1. Ireland is not nor never has been a manufacturing country. Sure there have be some manufacturing companies such as Dell, but essentially Ireland is a combination of a strong agricultural and tourism in rural areas with technological and financial bias in the urban areas. Dell is nice to have, and I feel sorry for those that have lost their jobs in Limerick - but it is not a core industry, even if it is a core employer.

2. Ireland has been growing at an incredible rate over the past 10 years, far faster than anyone could possibly hope to adapt to. Looking at the government's actions over this period, they have acted like lottery winners, squandering the growth to create an ever-burgeoning public sector. Coincidentally, the National Competitiveness Council in Ireland established that our competitiveness has deteriorated by 32% over this period. This loss as well as others is a good wake up call - and an opportunity to regroup and establish a firmer foundation for the future.

It is also important to note that Dell is not leaving Ireland - they are closing their manufacturing plant. Ireland's corporate tax rate is still extremely attractive to US companies.

The basic problem

[Moryath]

The basic problem is that "free trade" never is.

"Free trade" concerning commodities that are easily made (or grown) in an area, like tropical fruit towards northern climates, is one thing.

"Free trade" based on paying workers shit wages, or based on the fact that one country (*coughmexshitcocough*) has absolutely crappy evironmental protection laws while their neighbors don't, doesn't - it temporarily drives down "costs" while ensuring that the environment gets ruined and poverty is taken advantage of.

The solution is "fair trade" instead - place tariffs on any and all imported goods from countries whose labor protection and environmental laws are inferior to our own, such that the cost to produce them there and them import is the same (or better yet, slightly more expensive) as doing the production either here, or in a country with proper worker and environmental protection standards. If the USA/Canada/European countries would do that, then the countries with shit worker protection and environmental laws will have to fall in line and we can actually get things addressed.

Re:The basic problem

[u38cg]

The funny thing is, none of these people have to work for low wages or as sweated labour; they are quite free to spend their days scavenging rubbish dumps for scraps of food. It's hardly taking advantage of someone to pay them the going rate as opposed to letting them starve in the streets.

Your proposal is to take us back to the 1930s, which, if I might remind you, didn't work out so well. It took a long time to unwind the economic impact of protectionism. Imposing these standards on trading partners removes any point in trading with them - so all your manufacturing jobs will come back onshore. In turn, wages will go through the roof, as will inflation in general. In turn, your trading partners have to match the new, higher wages, which is even harder for them to do. Problem.

On worker protection: the country with the least worker protection laws in the world is the United States. Yet bizarrely, you also have some of the highest standards, because you are held to them by the free market. Countries with notional but unenforced safety regimes, such as China, don't do so well at actually protecting their workers.

Unskilled laborers act as a warning to the young.

[HornWumpus]

Bad examples serve a purpose.

Let the 'unskilled laborers' fight over the shit jobs that are uneconomical to move overseas.

The wage for those jobs will naturally be low.

Life's a bitch. Thanks for playing...better luck next reincarnation.

The fair consequence of never developing skills is subsistence living.

Re:There once was...

[bytethese]

Must be green slips then huh?

Re:Unskilled laborers act as a warning to the youn

[CohibaVancouver]

Correct, but keep in mind this paradigm does not just apply to unskilled labour. "Skilled" jobs such as programming, tech support, design etc. also naturally seek jurisdictions were labour costs are lower.