Dell job cuts..wider implications


There are additional costs shipping goods from a manufacturing base in India or China to the EU. There are no logistical costs having the guy answering the phone over there. The Dell plant in Poland occupies about half the site. I will be very surprised if the operations of the Limerick plant are not duplicated there within the next three years.
It is not too late to stop the rot; we had our chance and we blew it. Irish companies will only survive if they can develop export markets and prove themselves competitive on an international stage by offering goods and/or services with a value-add that is good value for money. So they will need to offer a high value add or a low cost.

The days of living off the Multinationals who came here chasing higher margins are over. We now have to offer them more than the chance to hire cheap and funnel revenue through our country and if we are going to do that we have to drastically improve our education system, our infrastructure and the supplier base that we can offer to them.
 
I'd not hold out much hope for improving education. There's a serious problem now getting students to go into the "hard" degrees. Technology courses are finding it difficult to fill their courses and even when they do the candidates aren't on average up to the standard of previous years.

What's happened now is that leaving cert students (or the mothers) know that many science and engineering courses are difficult, the resulting work is demanding and the pay is only ok - particularly on a per hour basis.

In the 90's US companies came here and expanded R&D because for a period some of the best Irish graduates were available from tech areas. A strong dollar and tech bubble allowed salaries in these fields to rapidly increase. Largely the salaries were connected to Californian rates.

Unfortunately other sectors decided they couldn't have this and pushed up their salaries without any economic reasons to support their rises. So now we've some of the highest paid teachers, police, politicians etc. in the entire world.

Now tech salaries have been effectively flat for around 5 years, so we've an unhealthy situation where talent that could be adding to the wealth of the country are instead targeting public sector jobs.

An over attractive public sector is a sign of a diseased economy. It'd be like everyone in Google wanting to work in the HR dept..
 
In a small effort to do someting about the situation rather than complain about it I think we should all make an effort to purchase products made in Ireland or at least in Europe. The most unlikely products are now being imported from China. It is not just small items coming from China but 3 piece suites and other heavy household items. (serious carbon footprint). Take a look at what your buying even in the household deps of M&S, its China, China, China. It will cost more yes, but if even a % extra stays in our economy we "should" benefit somewhat.
 
There are additional costs shipping goods from a manufacturing base in India or China to the EU. There are no logistical costs having the guy answering the phone over there.
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No logistical costs but there are other considerations such as, will you find enough European language speakers over there to take over the entire European telesales organisation (which often for multinationals is based in Ireland now). Will you even find all those people in Eastern Europe? There is a presumption that jobs which involve close or face to face communication to a local marketplace will have to stay in the local market (Ireland or Europe on bigger scale). If this changed it would a lot of sales people plenty to think about.
 
purchase products made in ireland?? you must b joking, we live in a competitive economy where people want the cheapest prices. if dell are not competitive let them leave, why dont they re-invent themsleves like apple . manufacturing is dead in ireland , its only a matter of time before they move all their manufacturing elsewhere.its the obvious thing to do
 
It may be the obvious thing to do for short term gain but as an Island nation is crazy to allow ourselves to depend totally on imported products. Personally I think it is naive in the extreme not ot look at the long term implications of the actions we take today. Cheaper isn't always better for very many reasons.
 
Many manufacturing processes are not labour intensive and so can survive in high wage economies. Those that are low value-add are gone already. Our biggest problem is that increasingly we lack a competitive within a European context.
 

excellent point, again the finger points back at the public service
 

Hi AnnR

If you know the set up in there - PAD as a division a year ago had about 120 staff, it's now down to less than 30 and with the changes that were made to their pay plan today I would be amazed if they had 20 people at the end of next quarter. If that was the case it won't make sense to keep them in Cherrywood.
 
aircobra19 said:
How are the two linked?
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When a large proportion of the population get pay increases it makes the country less competitive as pay costs have gone up. In the case of Ireland over the last 10 years the big increases have been awarded in the public sector where, for the most part, there has been no corresponding return on that investment in the form of improvements in services or increased capacity. The country has spent a great deal and got very little back in return. This costs jobs in the private sector as they are exposed to international competition and the general cost-base of the whole country impacts on them first.
 
I would also have said that the rise in the cost base in Ireland is far more related to the over fuelled property boom, that was let run unchecked, when it was obvious there was a problem with it. Thats hardly the Public sectors fault. Its the Govt fault. Certainly the cost of the public sector is a contributory factor to a rising cost base. But its laying it on a bit thick to suggest its the primary reason for some one like Dell to try and reduce their costs WORLDWIDE.
 
well said , the bloated public sector couldnt have awarded itself fat pay rises without the tax revenue from the property bubble. Nobody really paid much attention to the the huge waste in government expenditure until the bubble popped and people started worry about their jobs
 
I always thought that there was little difference between people releasing equity on their homes to pay for current expenditure and the government giving pay increases based on receipts from a capital tax bubble.
 
I haven't read this thread in full but I just thought it was funny to juxtapose the first and last posts at the time of my post. How on earth did one lead to the other...?

Purple said:
I always thought that there was little difference between people releasing equity on their homes to pay for current expenditure and the government giving pay increases based on receipts from a capital tax bubble.
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Purple said:
I always thought that there was little difference between people releasing equity on their homes to pay for current expenditure and the government giving pay increases based on receipts from a capital tax bubble.
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I don't really understand your point tbh. Thus not really understanding it I would have said one was a loan/credit the other cash. I can't see what it has to do with the thread topic either.

For that matter, and I'm repeating myself, I don't get what the public sector has to do it either with considering the scale of Dell operations worldwide.




Problems with the public sector (vast and many) are as much a symptom rather than a major contributer to the cost base in Ireland and problems with the economy in general. Considering that in many areas you can't attract staff into the Public sector because wages are better in the private sector. Thats mainly my own direct experence than, the popular mass media and public opinion of massive wages far beyond the private sector.
 
aircobra19 said:
I don't really understand your point tbh. Thus not really understanding it I would have said one was a loan/credit the other cash. I can't see what it has to do with the thread topic either.
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Both fund current expenditure from a source that is not sustainable.

aircobra19 said:
For that matter, and I'm repeating myself, I don't get what the public sector has to do it either with considering the scale of Dell operations worldwide.
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The thread developed (as many do) into a discussion on the future of foreign direct investment in Ireland. Given that the investment took place because we were cheaper than the former locations it is logical that if we get too expensive they will move to a lower cost economy. Since the public sector constitutes a large segment of the workforce when they get pay increases it has a detrimental impact on our cost base. The same is true in the private sector but there are many mechanisms for pay to drop as well as rise in that sector whereas there are none in the public sector.
This does not in any way imply that those in the public sector are overpaid and/or do not deserve their pay, it is simple economic reality.

aircobra19 said:
Problems with the public sector (vast and many) are as much a symptom rather than a major contributer to the cost base in Ireland and problems with the economy in general.
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I think they are both part of the problem and a symptom.
There has been a massive increase in staffing levels in the public sector over the last ten years. Any organisation that hires tens of thousands of people will have problems filling all of the posts. This does not necessarily mean that pay levels are too low.
 
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