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Monday, September 15, 2008

Dell on verge of Limerick pull-out

‘Meltdown Monday’

On a day which saw Americas 4th largest bank file for chapter 11 bankruptcy, Dell is teetering on the verge of pulling operations out of Limerick tonight with a newspaper report in the U.S stating the company has been discussing ceasing operations at its Raheen plant for nearly two years now. Reports say Dell has approached contract computer manufacturers with offers to sell most of its factories around the world.
“Dell executives have privately discussed closing the plant for two years, said two people with knowledge of those discussions. One of those people said Dell executives early last year decided to close the factory, though they didn't establish a firm timeline.

This person said the goal is to move production capacity from Ireland to Poland, where Dell opened a factory early last year -- though the company is moving cautiously to limit any disruption of manufacturing and defections of sales and operations staff Dell wants to retain. In addition to factory workers, Dell has more than 1,000 office workers who will likely remain in Ireland, that person said.”
Via Wall street Journal.
Thousands of people, businesses and families would be affected by the move which Mayor John Gilligan said would be ‘dreadful news’. 3000 people work in the Raheen factory.

The report indicates that if Dell were to cease its Limerick operations, production would be moved to its plant in Lodz, Poland where its production costs would be far less. It is clear that Poland would offer a cheaper workforce and would allow the company to easily access new markets in Russia along with Eastern European bloc countries and the middle east.

One report states the pull out could begin in 18 months.

Meanwhile Hewlett-Packard says it will slash 24,600 jobs which amounts to around 7.5% of the combined workforce of HP and its recently acquired company, EDS.

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