Dell’s announcement today that it will relocate its manufacturing plant in Limerick, Ireland to Lodz, Poland is a severe blow to the Irish economy, which has been hit hard and fast by the global economic crisis. Dell is Ireland’s second-largest corporate employer and the country’s largest exporter. Nineteen hundred shift workers will lose their jobs.
Dr. Alan Barrett of the Economic and Social Research Institute (ESRI) says that Dell’s closing is not a result of the economic downturn, but of a pattern all too familiar in the United States — corporations’ perennial search for cheaper labor. Since 2000 several companies, such as Procter & Gamble, Intel, Gateway, and NEC Electronics, have moved manufacturing jobs from Ireland to China, Eastern Europe, and elsewhere.
When Poland joined the European Union in 2004, it became an attractive place for companies to set up manufacturing plants. They could take advantage of cheaper labor while retaining the tariff-free benefits of an expanded European Union market.
However, Ireland has managed to maintain and attract what Barrett describes as “knowledge-intensive jobs.” Google’s European headquarters are based in Dublin, and Facebook announced late last year that they would locate their international headquarters there.
But the overall economic picture for Ireland is bleak. The ESRI predicts that unemployment will hover around 9.4 percent, and the net emigration for 2009 will be 50,000. “In previous economic downturns there would be other places to go,” said Barrett. With the global economic crisis the traditional go-to places for the Irish in search of work — the United Kingdom, the United States, and Germany — have lost their luster.
WIDE ANGLE reported on Ireland’s changing economic fortunes in Mixed Blessings.