Dell supremo to visit Limerick plant as concerns over jobs grow
Mike Cannon, a close confidante of Michael Dell, drew up the plan to sell off Dell’s nine plants around the world and outsource manufacturing to cut costs. Dell will then sell and distribute all products supplied by their contract outsource suppliers. The Dell plant in Limerick is understood to be on the sale list.
Mr Cannon during his visit will have discussions with the head of Dell in Ireland, Nicky Hartery, who leaves the company at the end of this month and his successor, Sean Corkery. The outsourcing strategy was initiated by Mr Cannon to cut annual costs by €2 billion. Arch rival Hewlett-Packard has already outsourced their manufacturing operations enabling the company take on Dell on price with less overheads.
The Cannon plan has caused huge concern in Limerick where Dell employs 3,000.
Over coming weeks that number will rise to more than 3,500 as extra workers are taken on to cope with the peak Christmas sales period.
Dell also employs 1,300 in Dublin and it is estimated that a further 10,000 jobs in the greater mid-west area are dependent on the Raheen plant. Dell opened in Limerick in February 1999 and Michael Dell has hailed it as the best manufacturing plant in his organisation.
A significant downturn in Dell’s fortunes started four years after Michael Dell moved aside and gave over control to Kevin Rollins. The slide saw shares slump from a peak of $42 to less than half that figure. Michael Dell resumed control of the organisation in January 2007 and the following month brought Cannon on board as president of global operations.
Cannon carried out a key study of all nine plants in the worldwide manufacturing operation and came up with the plan to sell off their plants to manufacturers who would supply Dell.
Last year, Dell announced that it was cutting its worldwide workforce by 8,000 to reduce operating costs by $3bn (€2bn) by 2010. Only a small number of Limerick jobs were lost in this move.
Another worrying aspect of the reconfigurated shape of Dell is that its new plant in Lodz, Poland, which covers, 400,000 sq ft (37,161 sq m) is designed to be expanded to 1 million sq ft (92,903 sq m) making it twice the size of the Limerick plant. With a much lower cost base, the fear is that an outsource manufacturing contractor might in time move the entire Limerick operation to Poland.
The mayor of Limerick, Councillor John Gilligan, said: “It is the kind of thing that keeps you awake at night.”
