Dell shifts manufacturing from Ireland to Poland

Dell, the world's No. 2 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.

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

The cuts at Dell's Limerick base, part of a $3 billion cost-reduction plan announced last year, come just three days after Waterford Wedgwood, one of Ireland's premier luxury brands, called in receivers.

"This is a difficult decision but the right one for Dell to become even more competitive," said Sean Corkery, Dell vice-president of operations in Europe, Middle East and Africa, citing lower labour costs in Poland.

The monthly minimum wage in Poland is $406 (€300), compared with over $2,000 (€1,500) in Ireland.

"This decision confirms the competitive advantage of Poland as attractive for investment. It is a good sign, especially in these difficult times," Pawel Wojciechowski, head of the Polish foreign investment agency, told Reuters Television in Warsaw.

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.

"We need to investigate all the effects of this aid to verify that it contributes to regional development and to ensure that it will not reinforce Dell's position or create significant capacity in a market on the decline in the Eastern Economic Area," said Competition Commissioner Neelie Kroes.

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