Monday 16 September 2019

Poland celebrates: 'good for Lodz, bad for Ireland'

Ciaran Byrne

"DELL closes Limerick and goes for Lodz!" The 'Gazeta Wyborcza' was, like most Polish media yesterday, predictably delighted with the bad news.

"Good for Lodz, bad for Ireland", said another Polish headline as the jobs announcement swept across Europe.

Even an ongoing EU investigation, announced last month, into Dell receiving €52.7m to open a plant there is unlikely to hinder the planned expansion of the firm in the east.

'Gazeta Wyborcza' listed all the recent Irish job losses including Waterford Wedgewood, and Tara Mines, as it welcomed Dell's announcement.

The paper marvelled at how unemployment rates in Ireland could soon be higher than Poland, a scenario unimaginable just a few short years go.

The once depressed industrial city of Lodz, which is 140 kilometres south of the capital Warsaw, is licking its lips at the prospect of 3,000 jobs.

Described by some economists as having "an abnormally low standard of living" the city in some respects mirrors Limerick's history of poverty and social upheaval.

Annxed by Hitler in 1939, Lodz suffered badly under Nazi terror and the town's 200,000 Jews were rounded up and murdered in a number of concentration camps.

Communist

With a population of 700,000, Lodz has an unemployment rate of 11pc but counts Dell, Daewoo Fonica, Gillette and Philips among its biggest employers. The city's Technical University, set up in the Communist era, is very popular.

The key to Dell's switch comes down to money: the average industrial wage in Lodz is €7,500 a year in contrast to the Irish average of €37,500.

While Dell workers in Lodz will earn more cash than most workers in Poland, it will be at levels nowhere near Irish pay rates. This factor influenced the US company's decision to switch.

Dell Products Poland announced in 2006 plans to set up a plant to make PCs, laptops and servers. Over 1,100 people work there and now 1,900 extra posts are on the way

When the jobs were first advertised, thousands of people flocked from all parts of Poland and queued for hours to apply for one of the coveted, well-paid positions.

Those who were successful were then dispatched to Limerick to be trained, probably by some of the Irish staff who now face losing their own jobs.

The Lodz plant, now the most significant Dell location in Europe, shipped its first 'Made in Poland' PC less than two months ago.

Just like Ireland has done in the past, Poland offered official sweeteners to attract the high-end jobs, giving Dell €52.7m to open the Lodz facility.

The European Commission is investigating the payment. EU rules allow governments to give money to businesses operating in disadvantaged parts of Europe, but officials want to look carefully at the payment, which will cover more than a quarter of the €189.58m cost of the factory.

Neelie Kroes, EU competition commissioner, said: "We need to investigate all the effects of this aid to verify that it contributes to regional development and to ensure that it will not reinforce Dell's position or create significant capacity in a market on the decline."

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