12 Jan 2009

Dell shifts manufacturing from Ireland to Poland

6:10 pm on 12 January 2009

Dell, the world's second-biggest PC maker, is moving its European manufacturing base from Ireland to Poland and cutting 1,900 of 3,000 jobs at its Limerick plant in a bleak start to the year for the shrinking Irish economy.

The company, which ranks itself as Ireland's largest exporter, largest technology company and second-largest company overall, said on Thursday that it would move production to its Polish plant and third-party manufacturing partners.

The cuts at Dell's Limerick base, part of a $US3 billion cost-reduction plan announced last year, come just three days after Waterford Wedgwood, one of Ireland's premier luxury brands, called in receivers.

Dell cited lower labour costs in Poland where the monthly minimum wage is $US406 compared with over $US2,000 in Ireland.

But the European Commission said on Thursday it would investigate nearly 53 million euros in Polish state aid for Dell's new manufacturing plant in Lodz, southwest of Warsaw, to see if it complies with rules on regional aid.

Dell cut more than 8,000 jobs last year but has still struggled to regain market share it lost to rival Hewlett-Packard. It also said last year that it would outsource more manufacturing to cut costs.