The cuts at Dell will be felt far beyond its Limerick plant, as the fallout puts dozens of businesses and thousands of livelihoods in Munster at risk, writes Carl O'Brien, Social Affairs Correspondent.
THEY SAY you can tell what time of the day it is in Limerick by the sudden traffic jams on the approach roads to the Dell plant. Whenever there's a change-over in one of the three working shifts, the city's bypass is clogged with vehicles, as hundreds of cars from across the midwest inch towards the Raheen Industrial Estate in the south of the city.
Parking in the area is at a premium; if you don't make it early enough to get a space in the company's three sprawling car-parks, there's only the hard shoulder of the main road, a footpath, or maybe a grass verge. In a city such as Limerick, it's easy to see how a company that employs 3,000 workers and is the bedrock of the midwest's economy, can dominate everything for miles around.
On Thursday morning this week, the scene was the same as it is most days here, as traffic backed up along the main approach roads. Except on this bitterly cold morning, it felt like the modern equivalent of a drab industrial scene in an LS Lowry painting, as hundreds of silent figures made their way towards the sprawling Dell computer campus under a cloud of rumour over the future of the company.
In the end, the news was expected, but choking nonetheless. A total of 1,900 of the 3,000 workforce will be laid off over the next 12 months. The manufacturing computer plant will be transferred from Limerick to Poland, where wages are around two-thirds cheaper than in Ireland. Local business leaders estimate that the knock-on effect on companies that rely on Dell for work could see in the region of 7,000 to 10,000 further jobs at risk, threatening to send the local economy into meltdown. What was once the bedrock of the midwest's economy, they said, was suddenly crumbling to pieces.
The cold chill from the announcement is being felt everywhere: from suppliers of cardboard boxes and documentation for the computers, to the logistics firms that export the products, to taxi firms that ferry hundreds of shift workers every week to the pubs, restaurants and pizzerias that have sprung up in the shadow of the plant. All are fearful that they, too, will be part of a domino effect of job losses as shock waves reverberate from the plant's closure.
With unemployment rates in Limerick among the highest in the country, and jobs going by the day across a range of industries, the chances of re-employment for many are slim, at best. In all, the events of this week are yet another reminder that the country's largest employers no matter what sector they're in - Waterford Crystal, Tara Mines and now Dell - are vulnerable to the vicissitudes of a wildly turbulent global economy.
As workers poured out of the briefings arranged at Dell's headquarters on Thursday, many headed for home, heads bowed, preferring not to speak, and bracing themselves for an uncertain future. Others fumed at the way they had been assured by management over recent months that their jobs weren't at risk.
A group of four women, who have been friends for years at the plant gathered outside the gates, phoning and texting loved ones with the news. "There are lots of husbands and wives here, even sons and daughters too. We're all going to lose our jobs," said one woman from Croom, Co Limerick, who declined to give her name. "I've a seven-month-old, a mortgage of €220,000, and my husband's job is at risk. After 18 years of loyalty, is this how you repay your workers?"
Another was fearful of the impact of the job losses for those across the region that rely on Dell for employment. "I travel from Ballylanders, Co Cork, near Mitchelstown, each day. There are people commuting from Tipperary town, Nenagh, north Kerry. It's basically most of Munster that's going to be affected."
"We'll just have to look for another job," says Sharon Kelly, 27, from Prospect in Limerick city, who joined Dell after leaving school 10 years ago. "I'm hoping for the best outcome that there is, but the way things are looking at the moment there seems to be more jobs going every day."
She's paying off a mortgage on a house which she bought at the height of the housing boom two years ago, and a car loan. Eamon Ryan, 59, from Nenagh, Co Tipperary, bristles with anger over the terms of the severance package, considering the long service many workers have given the company. "The redundancy deal is paltry. It's six weeks' pay per year of service based on base-rate pay, and doesn't include overtime earnings and it does not include shift allowances, which it should do," he says.
"As soon as they announced that they were building a factory in Poland two years ago, it was quite clear that Limerick was going to become redundant. We were just going in to hear what was inevitable anyway."
BUT IT'S NOT just workers at Dell who are plunged into the most uncertain of futures. Just up the road from the computer giant in Raheen Industrial Estate, there are thousands employed in other firms that are heavily dependent on Dell for work. Banta Global Turnkey, with a workforce of several hundred and which supplies kits and instruction manuals for computers, may be forced to go to the wall. Sercom, which helps with the computer assembly at Dell, is also under severe pressure, as is Flextronics, which provides logistics and warehousing services for the computer giant. Transport firm Walsh Western, which exports the computers through Shannon Airport, will also be badly hit. Sodexo, a catering company that supplies several of the firm's canteens, is also bracing itself for a steep loss of business.
That's just the firms surrounding the plant. The ripple effect also threatens the livelihoods of people such as James Collins, who has built up his 1,200 sq m bar and restaurant a couple of kilometres from the plant in Dooradoyle over the last four years. He has a strong lunch-time and evening trade from workers in Raheen Industrial Estate.
"It's a shattering blow for this area. Most of my customers are employed by Dell or firms associated with Dell. We run a big operation here, overheads are high and you've got to get customers through the door to make ends meet," he says. "Christmas parties, sports and social clubs, we've done barbecues, department nights out. Because we're big, we can cater for the numbers. Who knows what effect this will have?"
Taxi companies such as Fixed Price Taxis, one of the biggest in the city, get hundreds of fares each week from Dell as they transport shift workers to and from the company. "It's tough enough as it is with all the cabs on the street, but this will impact on us very, very badly," says taxi driver John Begley, 38. "You're always guaranteed fares with a company like Dell; that's all going to end now."
Some pizzerias, such as Domino's and Pizza Hut, which regularly supply late-night shift workers, say they may have to consider putting staff on protective notice. Restaurants such as the Unicorn, a couple of miles away on St Nessan's Road, are also fearful of the consequences. "This is uncharted waters. I've never experienced anything like this," says proprietor Bryan Greene, 32. "We've had Christmas parties with a lot of the firms up in Raheen. Drinks sales have slumped significantly and I'd fear of what's going to happen now."
Yet one of the surprises regarding Dell's decision to shut down its manufacturing centre in Limerick is that it took so long to reach the decision. When the company arrived almost two decades ago, they were heady times for the computer industry in Ireland. In its heyday in the late 1990s, one in every three computers sold in Europe was manufactured in Ireland. Since then the industry has been in terminal decline. Around 10,000, or about one third of the jobs in the sector, were lost between 2000-2004.
Once great computer firms that were standard bearers for the economic boom left with a whimper: Gateway, AST and Digital, among others. The reason was simple - production relocated to lower-cost centres in central and eastern Europe and China. In Dell's case, an efficient and flexible workforce meant it survived for longer, but the writing has been on the wall for at least the past two years.
"People here have done everything to adapt to changing circumstances," says one employee. "It used to have the moniker, 'Dell Hell' because of the low wages and long hours, but in more recent times people have felt lucky just to have a job."
IF THERE IS any silver lining to the gloom over Limerick this week, it's this: the impact of the job losses may not be as bad as feared, given the history of other computer manufacturers that have pulled out of the country. That's according to economists such as Prof Frank Barry of Trinity College Dublin, who says manufacturing jobs tend to be replaced by higher value, non-manufacturing posts, such as sales and technical support. In the case of Dell in Limerick, a total of just over 1,000 workers will remain who are involved in these functions.
"There is a bright side of the coin," says Prof Barry. "If you look at IBM, it ceased making hardware and moved into services. Intel has continued to upgrade. Apple used to assemble computers, but has evolved into a service-support campus with more highly skilled jobs."
The closure of Digital's manufacturing operations in Galway in 1993 is probably the closest example to Dell's announcement this week. It was the linchpin of the local economy, employing almost 800 people in manufacturing, and a further 600 or so in software and administration.
Within four years of the job losses, employment at the company had grown back to 1993 levels. In addition, various initiatives and informal networks among former Digital staff all played a part in the ongoing transformation of the local economy and the emergence of Galway as a leading European medical-instruments cluster (see panel).
An important caveat, though, is that job losses in Limerick are taking place at a time of an unprecedented downturn, which economists say is likely to deepen even further. In this atmosphere, it's questionable what capacity there will in the short-term for the local economy to absorb such rising levels of unemployment.
Not everyone is despairing, though. Dell worker Denis Ryan, 53, is philosophical over the future. At home in his bungalow in Newcastle West, Co Limerick with his seven-month-old son Darragh, he remains defiantly upbeat over what lies in wait.
"This is my third recession," he says. "I remember the 1970s, when it seemed that every company in Shannon was closing down. I lost my job in Krupp's. But I adapted, I went off painting houses, doing bar work, security jobs. Whatever paid the bills."
His priority is keeping up repayments on a mortgage of €300,000 he has with his partner Mary, but he's confident that he can tough it out. "You learn from one recession to the next. I made sure to pay off my debts when times were good. Most of us being let go, we're skilful people, hard-working. We'll miss working together and the craic we had. But life goes on. No one is going to starve at the end of the day."
DIGITAL DIVIDE THE SILVER LINING
THEY call them the Digital "mafia", and they have become multinational managers, financial controllers, pioneering medical-device researchers - one even set up his own restaurant.
Yet when Digital Equipment Corporation announced the closure of its computer hardware plant in Galway in early 1993, it seemed as if the world was about to end for its almost 800 staff.
"There is great sorrow in our hearts for the folk of Galway," read one headline in this newspaper on February 26th, 1993, referring to the reaction in Digital's sister plant in the Scottish city of Ayr.
"There are still questions over the decision to keep Ayr open and close Galway," ex-Digital staff Liam Ferrie and Marto Hoary recall, sitting in a coffee shop at NUI Galway (NUIG). However, both agree that the decision may have been the "best thing that ever happened" to them and many colleagues.
Ferrie, who had worked in the company for 20 years, now runs Irish Emigrant Publications with his wife, Pauline. He has pioneered internet publishing here and emigrant.ie has a global readership.
Hoary worked in Digital for eight years, and now runs his own medical-device research and design company, Embricon, on NUIG's business campus.
"It was very shocking at the time, given that the Galway plant recorded a £2 billion turnover in 1992," Hoary says.
"The fact that it was a complete closure in Galway meant that the potential impact was greater, relatively speaking."
The shock unleashed an "entrepreneurial spirit" that fed the so-called Celtic Tiger, they believe. The staff had one common bond - a strong desire to stay in Galway.
The IDA and Galway Chamber of Commerce established the Galway Technology Centre in 1994 and redundant Digital employees were among the first tenants.
"So many of Ireland's big companies have former Digital staff in key positions now. Dell staff will carry the same reputation, and that's something that you can't put a price on," says Hoary.
- Lorna Siggins