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Dell bosses plotted long, slow demise of Irish jobs

The Dell workers and the Government knew the writing was on the wall in August 2007 when 460 'trainees' arrived en masse from the grimy Polish city of Lodz.

Every morning and evening the Polish trainees, housed in rented enclaves outside the city boundaries of Killaloe, Ballykisteen, Bunratty and Nenagh, were bussed in to EMF (European Manufacturing Plant) 3, where Irish workers taught them the skills to put together laptop, desk top and notebook computers.

Even at the time the Irish workers knew that passing on these skills was akin to signing their own death warrant.

The Polish workers, hired after what Dell called a "highly competitive recruitment process", were being paid just over €3 an hour -- the rate of pay set by Dell Poland, where it was slightly above the industry norm.

But the Poles on the three- month training course arrived at the Dell plant clutching free meal vouchers for all meals, and they received an extra 'per diem' (per day) allowance.

They received free transport to and from the Dell facility and all accommodation and utility costs were paid.

At one stage phone cards were provided so they could keep in contact with loved ones. The company even arranged weekend sight-seeing trips to the Cliffs of Moher, the Ailwee caves, the Burren and Dublin, Cork and Galway for the east European trainees

Even with those 'extras' they were still much cheaper than Irish workers, who were being paid about €11 an hour.

It may have cost Dell $200m to build their new state of the art facility in Lodz -- including a hefty €50m sweetener from the Polish government currently under investigation by the European Commission -- but the savings in labour costs were mouthwateringly attractive.

At the time Dell insisted the Polish facility was "complementary to Dell's Limerick-based facility and many of the support functions for Lodz would be supported from Limerick".

Nobody believed them, not even the 200 Irish-based Poles who got jobs at Dell on Irish terms and conditions and who found themselves being undercut by their compatriots.

The Polish trainees did well and were promoted from 'associate positions' to 'senior associates', by-passing the company's usual promotion process. The company invited the Polish trainees from Lodz to apply for 75 internal company promotions ranging from quality auditor to supervisor, to be filled in the new factory back home.

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After they completed their eight-hour shift training on the line in Limerick they grabbed the opportunity to do overtime at the Dell plant for another couple of hours before being bussed back to their rented cottages.

They went back to Poland in mid-November 2007, just in time to be the vanguard employees as Lodz opened for business and the first Dell Poland laptop slid off the conveyor plant, was packed and sent out for sale.

It was the deathknell for the Dell workers involved in manufacturing back in Ireland and the workers knew it. So did the IDA. And so did the Government. Neither could admit that they had given up on saving the manufacturing jobs, despite the €75m in grants received by Dell from the exchequer, most of which cannot be recouped.

By the following September, a report in the Wall Street Journal claimed Dell was looking to reduce its cost structure worldwide by moving the majority of its manufacturing to Lodz.

Reporter Justin Scheck stated: "[Dell] do not seem to have a firm timespan but it's contingent on moving production to Poland. I think there are a lot of different pieces here but the long-term plan does seem to be closing the Limerick facility."

So instead of being "complementary" to Limerick, Lodz was now "instead" of Limerick.

The IDA had contact with Dell headquarters on a weekly basis and in October last year Tanaiste Mary Coughlan travelled to Texas to meet Dell management for talks.

In November, Dell allowed 400 temporary staff to leave, ringing alarm bells that manufacturing in Limerick was going sooner rather than later.

In December, Ms Coughlan, Defence Minister and local TD Willie O'Dea, and IDA chief executive Barry O'Leary, travelled to Austin, Texas, for a crisis meeting with Dell.

The meeting was scheduled for 7.30am on Monday, December 15, in the spartan and windowless boardroom of the Dell HQ.

It was a businesslike and perfunctory meeting in tune with the minimalist furnishings. Black coffee and biscuits were served.

On the other side of the table was Dell founder Michael Dell; senior vice-president of global facilities, Kip Thompson; president of global operations, Mike Cannon; Sean Corkery, who heads the Limerick plant, and another senior Dell executive.

The first presentation from Coughlan, O'Dea and O'Leary was an attempt to save manufacturing in Limerick. All the possible help and incentives available had already been offered by the IDA over the previous months. It soon became clear from what was being said, and from the body language on the other side, that the hopes of saving the manufacturing jobs were slim to non-existent.

The two ministers and the IDA chief were told by Michael Dell that he was in a competitive business, that all Dell's competitors have outsourced their manufacturing, and that Dell had to follow.

The fallback Irish position was simple -- to save the high- end jobs in Ireland, including the 1,100 staff in Limerick who work in the areas of logistics and product development, and 1,300 at a sales and support operation in Cherrywood, Co Dublin.

At the same time there were talks about the possiblity of getting more high-end jobs to Limerick -- even if the manufacturing jobs were to be lost. The meeting lasted 90 minutes. Dell gave no decision either way, but they did reiterate that they needed to wipe €3bn off their costs. There was no optimism that the manufacturing jobs could be saved. The axe finally fell on Thursday but, like an expected death in the family, it still hit hard.

As far back as summer 2007 some Dell workers, knowing their jobs would be gone sooner or later, decided to hold tight and wait for the redundancy package.

It was not as generous as they had expected -- six weeks' pay per year based on basic pay, and not including the shift allowances and overtime.

By late Thursday there seemed to be some softening of the company's severance package when Irish chief Sean Corkery indicated there might be some room for further negotiation on redundancy payments between now and the first tranche of jobs going in April. All 1,900 workers will be gone inside 12 months.

But while the workers are left, so far at least, with a minimal redundancy package, Dell global operations president Mike Cannon, who attended the fateful meeting with Mary Coughlan and Willie O'Dea in Austin in December, also finds himself without a job after being let go by Michael Dell.

Cannon, along with chief marketing officer Mark Jarvis, who is also departing, will share a severance package worth $10m, with Cannon getting most of it.

Meanwhile, Dell's vice-president of European operations, Sean Corkery, who announced the job cuts, has been the recipient of a tax-free payment of €700,000.

The dividends were paid through a patent royalty company called Dell Research Ltd and are not subject to tax under Irish legislation.

The workers -- told by management not to talk to the media -- held their counsel. On Thursday nights the Unicorn pub, the Hi-Way bar and the Brian Boru bar, not far from the Raheen industrial estate, usually have a decent scattering of Dell workers unwinding after work.

But last Thursday most of the 1,900 workers whose jobs are gone chose to go home rather than drown their sorrows.

And another 10,000 people who work for companies who are key, and even sole suppliers, to Dell in the Midwest also had a sleepless night as they considered their futures.

Across the country, in pubs in Leixlip, Lucan and Maynooth, workers tuned into the evening news with a sense of foreboding. If Dell could 'migrate' jobs to Eastern Europe what are the long-term prospects for Intel -- the country's biggest employer with 5,000 workers.?

Last November a spokesman for the Irish arm said: "We may have to take pragmatic decisions."

And since then Intel's revenue has slipped further. More than 4,800 people are employed at Intel's campus in Leixlip, Co Kildare, and about 200 people work in Shannon.

In the last three months the number of people joining the dole queue has averaged 500 a day -- the equivalent of a Dell closure every four days.

Analysis, pages 19,23,26,27,38 Business, page one

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