ANALYSIS:DELL'S DECISION to cease manufacturing computers in Ireland is remarkable in that the company continued to build PCs here for so long.
The decision draws a line under Ireland's PC manufacturing and assembly industry, which in the late 1990s produced about one third of all PCs shipped in Europe.
Dell always maintained that its Limerick operation was its most productive manufacturing operation in the world. Given Dell's build-to-order model - where customers order a machine customised to their preferences - it needed a plant in Europe to be close to its customers in the region. But once the company began to build a similar operation in Poland the writing was on the wall for Limerick.
In private Dell managers conceded that the company would always move manufacturing to where costs were lower. Wages and other costs are much lower in the economically depressed region of Poland where the Dell factory is located.
Last month the European Commission announced it is looking at the legality of €52.7 million in state aid that the Polish government is planning to provide for Dell's operations in the city of Lodz. But even this did not delay the inevitable decision.
The design of the Lodz factory is based on the Raheen plant and a number of Irish Dell managers temporarily relocated to Poland to get it up and running.
The factory opened in November 2007 and currently employs 1,800 staff which will increase to 3,000 over time.
Seán Corkery, Dell's head of operations for Europe, confirmed that the design of the Lodz factory was based on the Raheen plant and that it had "been put together by the team here".
A report by Prof Frank Barry from Trinity College Dublin and Dr Chris Van Egeraat from NUI Maynooth published by the ESRI last year holds out hope for staff losing their jobs in Limerick. It looked at the decisions by computer makers including Apple, Gateway and IBM to either cease manufacturing and move into other activities or pull out of Ireland entirely.
It found that AST and Gateway, workers quickly got jobs with other companies in the area, underlining the value of the skills they learned in the computer industry.
Workers in the sector tend to be more highly educated and younger than the average across other areas of manufacturing.
Prof Barry and Dr Van Egeraat said this gives redundant workers a better chance of finding new work.
The difference this time is that the Dell workers are being laid off as the economy is in the doldrums and few technology firms are hiring.
The remaining major manufacturers in the sector are both in Leixlip, Co Kildare: Intel, which makes computer chips and other microelectronics, and HP, which produces printer cartridges.
Although Intel has reduced staff numbers over the last two years the huge capital investment the chip company has made means it will not exit Ireland while the factory is still capable of producing current generations of technology.
Its most recent factory on the site cost $2 billion. The challenge for Leixlip will be to attract further investment from the corporation. Local management are actively putting proposals to Intel HQ.
HP's manufacturing operations did not require the same level of investment but local management have added functions such as research and development which are less likely to move to a low-cost location.
Although Dell executives deny its Polish operations were established to replace Limerick the Irish plant was always going to find it difficult to compete on wages and other costs.
The decision is further confirmation that the local technology industry, which employs over 80,000 people, will have to continue to move into higher-end skilled functions which cannot be easily carried out in cheaper locations.