Dell's vote of NO confidence in the Irish republic

I think Dell's decision to move their manufacturing from Raheen to Poland is a vote of no confidence in the way the republic of Ireland has turned out. Once again, in a tradition stretching back 300 years, the state has failed the people of Ireland.
As usual market forces, as are manafest here, speak with far more clarity and intelligence than the ramblings of any politician or opinion writer.

With that I think I'll leave it at that, although I was suprised there werent any threads here on this, which I consider to be THE major watershed in the recent economic history of the republic.

We've been posting about it on the Jobs thread. Perhaps those posts could be moved here?

https://machinenation.forumakers.com/economy-business-and-finance-f8/jobs-and-unemployment-watch-t1537.htm#58450

This, together with Waterford Glass in one week, is two generations of employment type, the old and the new manufacturing. The idea that an economy can survive without manufacturing is cracked.

when i was in college studying economics many moons ago, the lecturer mentioned that our boom was fueled by the 3 c's: computers, chemicals and coca cola.

the computers, dell aside, seem to be still here (think software as well as hardware). chemicals have gone through a period of rationalisation with WL, BMS and Phfizer pretty much having most of the market. hows the cola industry going?

zakalwe wrote:

when i was in college studying economics many moons ago, the lecturer mentioned that our boom was fueled by the 3 c's: computers, chemicals and coca cola.

the computers, dell aside, seem to be still here (think software as well as hardware). chemicals have gone through a period of rationalisation with WL, BMS and Phfizer pretty much having most of the market. hows the cola industry going?

Just invested more in Wexford. Better hope Obama doesn't hear about it.

Yeah, they're building a new plant down there.

Respvblica wrote:

I think Dell's decision to move their manufacturing from Raheen to Poland is a vote of no confidence in the way the republic of Ireland has turned out. Once again, in a tradition stretching back 300 years, the state has failed the people of Ireland.
As usual market forces, as are manafest here, speak with far more clarity and intelligence than the ramblings of any politician or opinion writer.

With that I think I'll leave it at that, although I was suprised there werent any threads here on this, which I consider to be THE major watershed in the recent economic history of the republic.

Dell are not moving their manufacturing anywhere, they are getting out of it entirely and will subcontract their needs.

tonys wrote:

Respvblica wrote:

I think Dell's decision to move their manufacturing from Raheen to Poland is a vote of no confidence in the way the republic of Ireland has turned out. Once again, in a tradition stretching back 300 years, the state has failed the people of Ireland.
As usual market forces, as are manafest here, speak with far more clarity and intelligence than the ramblings of any politician or opinion writer.

With that I think I'll leave it at that, although I was suprised there werent any threads here on this, which I consider to be THE major watershed in the recent economic history of the republic.

Dell are not moving their manufacturing anywhere, they are getting out of it entirely and will subcontract their needs.

Indeed, tonys, and anybody who knows anything about the IT industry knows that the margins on boxes (PCs and laptops) are extremely tight in a very competitive market. IBM got out of this and HP remain because of a good product range and excellent distribution channels, but it is not core to their business.

cactus flower wrote:

We've been posting about it on the Jobs thread. Perhaps those posts could be moved here?

https://machinenation.forumakers.com/economy-business-and-finance-f8/jobs-and-unemployment-watch-t1537.htm#58450

This, together with Waterford Glass in one week, is two generations of employment type, the old and the new manufacturing. The idea that an economy can survive without manufacturing is cracked.

Yes - you can change the heading to include Waterford if you like. One might be indiginous and the other international, but they have both been victims of the same problems. Granted there is a world recession but if you consider the last few years then Ireland was doing its damdest to make the fall as sheer as possible.

We could argue on how much central government policy is to blame and how much is due to external forces are beyond our control, but it seems to me that we might have averted the problem if the government had worked a bit harder at maintaining our competeitiveness.

1. I live and have lived abroad in countries such as the netherlands which are more developed than Ireland, and yet the cost of housing is much less. We should have had a low cost housing policy since 2007. We should actively try to devalue the cost of property. Perhaps instead of raising income tax we should put punitive taxes on home owners and landlords.

2. Transportation and facilities such as health are so much better in other countries. Granted I'll hand it to FF for at least emphasising the national development plan and building motorways, but the costs in comparison to other countries seem to be enormous. So in retrospect FG were absolutely right all along when they made value for money their main clarion call in 2002 and 2007.

3. Reduce salaries. This has to happen. Limerick is now facing economic collapse, but if houses are cheaper (due to prohibitive taxes on property) then salaries can be lower, and maybe people on low salaries can get tax breaks for buying houses.
Anyway the first place to enact salary reduction should be for elected deputies, senators and the Toaiseach. I dont care about the expenses, it should be an honour to serve their country. (And we dont have to worry about them becomming bought men and women who secretely subsidise their low salaries with illegal payments, because we will enact a law which will summarily fling them into gaol for 10 years (no bail) if caught receiving a cent.) After that, the public service should be on far lower salaries than they are now - lower even than the private sector. The trade off is job security and a guaranteed pension. Thats the way it always worked, so why oh why did they change it.

4. Now that capital is taken out of property, get the real capitalists and entreprenuers moving. Admitedly tax and bureaucracy-wise Ireland has done well, but we lack a national strategy in investing in real areas. Question: What country makes the best IT security Firewalls? Answer: Israel's Checkpoint is the world Market leader. Israel has great expertise in programming and security issues due to government spending on defense. Checkpoint is a by-product of that strategy. Likewise we should look at how Sweden and Switzerland have built up industries by specialising in areas. Why not become truley neutral and start giving universities contracts to design or invent new radar systems or something(or we dont have to look just at defense but you know what I mean).

A huge scandal Enron style is just breaking in India - one of the biggest computer companies there has been misrepresenting its profits for years.

I think that we have a lot of opportunities, and problems that can be corrected, but underlying there is a global crisis of low profitability. Rates of profit are under pressure and there is no room for error or market disturbance.

Business is run for the main benefit of a handful of people, but that overconcentrates capital and fails to get it through the system where it can be spent. At the same time, rates of profit go down due to competition and ever increasing overheads, and the result is a crunch.

cactus flower wrote:

A huge scandal Enron style is just breaking in India - one of the biggest computer companies there has been misrepresenting its profits for years.

I think that we have a lot of opportunities, and problems that can be corrected, but underlying there is a global crisis of low profitability. Rates of profit are under pressure and there is no room for error or market disturbance.

Business is run for the main benefit of a handful of people, but that overconcentrates capital and fails to get it through the system where it can be spent. At the same time, rates of profit go down due to competition and ever increasing overheads, and the result is a crunch.

If the profits are low, somewhere along the value circle, there is a leakage, which needs to be highlighted (sounds like an engineering analogy). It may well be the government, the bad infrastructure, greedy investors or a lack of buyers.
If we look at Dell, we could examine the cycle from the designer through to the miner of the precious metals, through the assembler and retailer, all the way to the consumer. Obviously its the company's business to do the marketing and work out the demand for their products but it is all our concern if there are inefficiency in the market.

As an example we know that one of our disadvantages is our island status, so we react to that by ensuring that national policy is to have cheap air and sea transportation costs. Generally we havent been bad at that although we depend a lot on the EU. We have the English language which is an advantage in some areas but we are also disadvantaged by a small population and subsequent home market, which explains why it is government policy to ensure we are at the heart of the EU.

As our wealth depends on our trading and exporting, we have to ensure there is no leakage in the value chain. My own inkling is that wastage has occurred in paying assembly workers salaries which are too high. Of course you cannot blame teh workers for wanting what everyone else, including public servants get, and to have enough money to pay for things in an extremely expensive country.

National policy should be defined by ensuring that our costs are low, while the value we add is high. This was lost sight of in 98-08.

Finally the EU has been ensuring that other countries remove their market inefficiencies in order that they comply to the rules of the internal market. As these countries have become more efficient it is natural that they would start attracting inward investment. Ireland should try to move ahead of the game.

The Dell job losses in Ireland are being reported on the main Sky UK news - Cowen says it is an challenge for "the Region".

How far back do we have to go to find a bigger single loss of jobs in one go? I don't remember a similar loss. A total (if not unexpected) disaster for Limerick.

cactus flower wrote:

The Dell job losses in Ireland are being reported on the main Sky UK news - Cowen says it is an challenge for "the Region".

He's a challenge for our democracy

The whole country needs to undertake a brutally honest S.W.O.T. analysis asap.

http://en.wikipedia.org/wiki/SWOT_analysis

You know its not fair that people were hoodwinked so.

This closure was SO on the cards, that any two-bit economist with even the most basic training could have figured that out. Yet people were forking out big money for houses based on jobs that were destined to go.

Its not the peoples own fault entirely. There were people in serious positions of reponsibility who should have acted and didnt becuase they were afraid. I dont mean acting in attempting to rescue the company - but acted in realistically bringing peoples expectations down to earth. Planning properly.

But governance in Ireland is governed by electoral cycles. I'm ashamed to say it but even FG in 2007 were playing at that game forecasting utopian growth rates, almost as bad as FF-PDs.

John Bruton was damm right when he talked about the Celtic Snail in 2000. He lost the leadership of the party which was embarressed by it and how the feckin media gloated. Now the chickens are home to roost. But its a bitter sweet thing even for the most ardent FF hater out there. Surely we deserve better.

This is the result of the fact that truths cannot be spoken and a poilcy for the long term benfit of the people of Ireland cannot properly implemented. Power is at all costs.

Ye deserve Jackshit. That is the problem. Everyone asking why didn't somebody tell them they were stupid. They believed because they wanted to believe. They don't deserve a vote because they just voted for the party that promised them the most.

A bit of Polish wages will do them all the good in the world.

Even as the country is turned into Estonia the fools will still vote yes on Lisbon.

Talk about turkeys voting for Christmas

youngdan wrote:

Ye deserve Jackshit. That is the problem. Everyone asking why didn't somebody tell them they were stupid. They believed because they wanted to believe. They don't deserve a vote because they just voted for the party that promised them the most.

A bit of Polish wages will do them all the good in the world.

Even as the country is turned into Estonia the fools will still vote yes on Lisbon.

Talk about turkeys voting for Christmas

So what's your recipe youngdan. Extreme differences in wages in a globalised economy are not sustainable. There is a tendency to evening out. Owners of capital will carry on looking for cheaper labour at home and abroad until the options run out or until they are stopped.

It should be dawning on everyone now that they will be working for global wages sure enough.


Why do you think so much effert is put into the EU and global trade deals. Do you think it is so that everyone can live in Utopia.

youngdan wrote:

It should be dawning on everyone now that they will be working for global wages sure enough.


Why do you think so much effert is put into the EU and global trade deals. Do you think it is so that everyone can live in Utopia.

Well the WTO talks broke down without agreement.

Hi, I fundamentally disagree with the idea that Michael Dell decided that Ireland was up the sh!tter and a move would be in order. It was a simple bottom line decision and while it does reflect the international environment Ireland is operating in and the challangers post boom Ireland face, I don't see it as proof that there is a perceptin that Ireland has failed as the idea was always to move on once Ireland became to expensive to operate in. its how Ireland meets the challanges of the present times that will determine how Ireland is seen - as a success story or not.

Respvblica wrote:

Yes - you can change the heading to include Waterford if you like. One might be indiginous and the other international, but they have both been victims of the same problems. Granted there is a world recession but if you consider the last few years then Ireland was doing its damdest to make the fall as sheer as possible.

We could argue on how much central government policy is to blame and how much is due to external forces are beyond our control, but it seems to me that we might have averted the problem if the government had worked a bit harder at maintaining our competeitiveness.



1. I live and have lived abroad in countries such as the netherlands which are more developed than Ireland, and yet the cost of housing is much less. We should have had a low cost housing policy since 2007. We should actively try to devalue the cost of property. Perhaps instead of raising income tax we should put punitive taxes on home owners and landlords.

I don’t see how this would help. Yes the cost of living is terribly high in Ireland but what you are talking about would only discourage development. The housing boom was fuelled in part by a legitimate shortage as the population increased during the first boom.

Respvblica wrote:

2. Transportation and facilities such as health are so much better in other countries. Granted I'll hand it to FF for at least emphasising the national development plan and building motorways, but the costs in comparison to other countries seem to be enormous. So in retrospect FG were absolutely right all along when they made value for money their main clarion call in 2002 and 2007.

This does seem to be the case. However, I really think Ireland was hamstrung by years of massive under investment and infrastructural improvement takes years. I suppose a massive programme of public works undertaken during the last decade when costs as a whole were rising due to increased demand meant this was inevitable.

Respvblica wrote:

3. Reduce salaries. This has to happen. Limerick is now facing economic collapse, but if houses are cheaper (due to prohibitive taxes on property) then salaries can be lower, and maybe people on low salaries can get tax breaks for buying houses.
Anyway the first place to enact salary reduction should be for elected deputies, senators and the Toaiseach. I dont care about the expenses, it should be an honour to serve their country. (And we dont have to worry about them becomming bought men and women who secretely subsidise their low salaries with illegal payments, because we will enact a law which will summarily fling them into gaol for 10 years (no bail) if caught receiving a cent.) After that, the public service should be on far lower salaries than they are now - lower even than the private sector. The trade off is job security and a guaranteed pension. Thats the way it always worked, so why oh why did they change it.

I don’t see how a tax on property will make the cost of living any cheaper. Costs are too high in Ireland and manufacturing jobs like Dell are always in danger of departing to cheaper locations. That’s why they came to Ireland in the first place. We need to move towards the much vaunted knowledge based economy which means more employed in R & D, and less employed in the actually monkey work of standing on a line assembling parts. You cannot just decide to reduce salaries in the hope that the seagates or dells of the world come back. They are going and we may as well start looking beyond that now.

The next to go by the way are all those finance jobs in Dublin. London took the hit a decade ago when back office operations relocated here. The new trend is Singapore or Mumbai. I know for a fact ML are investing heavily in office space in Singapore and management are talking of a global centre for operations and back office. (Dublin is currently European centre for these). Ready in mid ’09. Expect an announcement then. These jobs are not profit producing for their compnies, just the necessaries of remaining in business. All decisions that make the cash are still made in the City of London - the old cliche of a knowledge based economy again.

Respvblica wrote:

4. Now that capital is taken out of property, get the real capitalists and entreprenuers moving. Admitedly tax and bureaucracy-wise Ireland has done well, but we lack a national strategy in investing in real areas. Question: What country makes the best IT security Firewalls? Answer: Israel's Checkpoint is the world Market leader. Israel has great expertise in programming and security issues due to government spending on defense. Checkpoint is a by-product of that strategy. Likewise we should look at how Sweden and Switzerland have built up industries by specialising in areas. Why not become truley neutral and start giving universities contracts to design or invent new radar systems or something(or we dont have to look just at defense but you know what I mean).

Yeah, ireland’s universities need to be more lavishly funded. Having only one university in the top 100 is sad.

Who said Dell left because he believed Ireland was in trouble. He left because it is cheaper in Poland. Were it made cheaper in Ireland he would have stayed

youngdan wrote:

Who said Dell left because he believed Ireland was in trouble. He left because it is cheaper in Poland. Were it made cheaper in Ireland he would have stayed

Exactly my point YD - it was obvious from the day the ribbon was cut on the plant that we could only expect a few years out of them. Companies have no loyalty to anyone other than shareholders (as much as people don't like this fact, its true). The Government that wasn't aware of this and planning for the day is incompetant.

That is about the size of it

shutuplaura wrote:

Hi, I fundamentally disagree with the idea that Michael Dell decided that Ireland was up the sh!tter and a move would be in order. It was a simple bottom line decision and while it does reflect the international environment Ireland is operating in and the challangers post boom Ireland face, I don't see it as proof that there is a perceptin that Ireland has failed as the idea was always to move on once Ireland became to expensive to operate in. its how Ireland meets the challanges of the present times that will determine how Ireland is seen - as a success story or not.

I agree with that. Dell wants to buy labour. We lost on price.

cactus flower wrote:

youngdan wrote:

It should be dawning on everyone now that they will be working for global wages sure enough.


Why do you think so much effert is put into the EU and global trade deals. Do you think it is so that everyone can live in Utopia.

Well the WTO talks broke down without agreement.

And are destined to continue to break down without agreement. Doha is dead but nobody wants to write the death cert. Especially Lamy. For if he did, that he would be more or less acknowledging that the organisation of which he is the head has no future. It has to happen some time though.