Irish MEPs Accuse EC Of Paying Dell To Close Limerick Facility

Irish members of the European Parliament have reacted angrily to chaos and misinformation surrounding the closure of computer maker Dell’s manufacturing facility in Ireland, with the loss of around 2,800 jobs.

According to reports in the Irish News, some Irish MEPs have attacked the European Commission for effectively funding the closure of Dell’s manufacturing site in Limerick by giving around €50 million (£45.4m) in aid to the creation of new site in Poland. Sinn Féin MEP Bairbre De Bruin reportedly said that Dell had been encouraged to move its production to a cheaper plant in Poland with the help of €54.5 million (£49.6m)-worth of Polish government subsidies approved by the European Commission.

“EU policy has the effect of using public money to set worker against worker and country against country in a race to the bottom in terms of wages and conditions. If the profits are not big enough a company knows they will be subsidised (by Brussels) to move to a more profitable location,” she said.

The criticism follows a separate announcement from the European Parliament this week in which the organisation announced that it agreed to donate around €14.8 million (£13.5m) from the European Globalisation Adjustment Fund to the Mid-West region of Ireland to help the 2,840 workers have lost their jobs after Dell opted to relocate its European manufacturing facility from Limerick.

But despite approving the aid for Ireland, there appears to be some conflict with European bodies about where exactly the jobs lost from Ireland have ended up. In a statement released in January this year, Dell quite clearly states that the scaling down of the Irish facility in Limerick was a direct result of moving production to Poland. “Dell will migrate all production of computer systems for customers in Europe, the Middle East and Africa (EMEA) from Limerick to its Polish facility and third-party manufacturing partners over the next year,” the company said.

However, the European Commission maintains that there was “was no connection between the redundancies in Ireland and a new Dell plant in Poland, the Polish factory having been planned long before the closure in Limerick”. Instead the European authorities maintain that the jobs from the Dell plant effectively went to manufacturing sites in China and Asia. “When Dell moved its production of laptops, notebooks and netbooks from Limerick to China and other Asian countries, 2840 workers lost their jobs. Of these, 2000 were Dell employees and the others worked at Dell’s suppliers or downstream producers,” the Parliament stated.

But the story about the Irish jobs moving to China doesn’t appear to have convinced all parties in the various European authorities. The statement about “no connection between the redundancies in Ireland and a new Dell plant in Poland” were apparently prompted by questions from the European Employment Committee. According to the Parliament statement, the aid to Ireland was approved by 591 votes to 55, with 28 abstentions.

A spokesperson for the European Parliament contacted by eWEEK said that the commission was mainly motivated by “doing the best for the Irish workers in Limerick” but could not comment on the conflicting information from Dell and the European Parliament and the disagreements between the various European authorities over the issue.

For its part, Dell released a statement in January discussing the closure of the manufacturing parts of its facility in Limerick in the light of a move to Poland and made no mention of jobs going to China. “We are proud of our 18-year tenure as a major manufacturer in Ireland,” said Sean Corkery, vice president of operations, EMEA. “This is a difficult decision, but the right one for Dell to become even more competitive, and deliver greater value to customers in the region.”

Dell said at the time that it expected to reduce its Limerick manufacturing workforce by about 1,900 employees over the ensuing 12 months. The initial release of employees will occur in April, with the full transition expected to be completed by January 2010. Affected workers will receive a competitive severance package and career outplacement assistance as they transition from the company.

“We will treat affected employees with dignity and respect and offer them every practical support through this extended transition period to minimise the impact on them,” said Mr. Corkery. “We appreciate the support from the Irish government and the people of Limerick over these many years.”

Dell said it would maintain some of its presence in Limerick which will continue to “coordinate EMEA manufacturing, logistics and supply chain activities”. The company added that its Global Innovation Solutions Center and EMEA Command Center will remain in Limerick and that its “significant sales, marketing and support activities in Cherrywood, Dublin” would also remain.

Dell and members of the European Commission were contacted for comment but did not reply in time for this article.