Mid-west loses out yet again to ‘lower cost locations’ overseas
THE 370 jobs lost at Element 6 are to follow an overseas route just as the 2,000 wiped out at Dell.
E6 plant general manager, Ken Sullivan, said: “They are going to lower cost locations. We obviously have an operation in South Africa, and some of the jobs will be relocated there and others will be either going to other parts of the existing Element Six group or possibly to other out sources.”
The Dell jobs are being moved to Lodz in Poland where the hourly pay rate is a quarter of that here.
Mr Sullivan said: “The reasons are essentially cost. Ireland is just more expensive than any other locations we operate in. The cost base in Ireland is too high and uncompetitive, higher than most other locations in Europe. Combined with the economic situation we find ourselves in, where business is down and revenues are below 50% of last year, with the combined cost base and low activity, the operation in Shannon is not just viable.”
Mr Sullivan said discussions will take place with workers and their representatives.
The E6 manager said he had always felt there was a place for the Shannon operation, but the company’s executive in London did not agree with this view.
“The executive has decided that the gap is too big and they don’t believe that a viable restructured option would close the gap sufficiently to make it cost effective,” said Mr O’Sullivan.
The president of Limerick Chamber of Commerce, Harry Fehily, said he was not surprised that hundreds of more industrial manufacturing jobs have been lost, due to cost levels which now prevail here.
Mr Fehily said: “Costs must come down by 20% if we are not to lose more jobs. The public sector is now a huge overhead and needs to be trimmed down. This will be an unpleasant nettle to grasp, and it will carry a sting, but we are borrowing way too much. Our economy has become too fat. People have been going on strike and this is tantamount to economic suicide. Foreign companies looking to Ireland see electricians on strike and closing down industry, it’s lunacy. People have lost touch with reality.”
The chief executive of Shannon Chamber of Commerce, Helen Downes, said the hard question now needs to be asked — is the Government is resigned to shutting down manufacturing in Ireland?
She said: “The manufacturing base is being eroded but surely there are aspects to manufacturing which are worth fighting for, particularly companies with smart technologies.”
Ms Downes said something has to be done about Ireland’s cost base.
She said: “Otherwise we will continue to see closures of this scale and significance. Some decisions may be tough for the population to accept but unless something is done, not in three or five years, but very quickly, the effects of the recession will be multiplied by the loss of even more jobs."
