Timing disastrous for workers losing their jobs

EMPLOYMENT ANALYSIS:IT WON'T be any comfort to the 1,900 people who have just lost their jobs that Dell clung on to Ireland for longer than any other computer hardware manufacturer.

In fact the late timing of its exit is disastrous for those workers, coinciding as it does with the worst Irish labour market conditions for decades.

While workers made redundant from Intel, Apple, Gateway and other firms between the computer assembly exodus period of 1999-2002 were largely able to find other jobs in the booming economy, Dell's casualties face a far harder scramble.

IDA Ireland has pledged "all necessary action" to help the Limerick region, saying IDA-backed firms had already created over 900 new jobs in the area over the past 12 months and adding that it would try to speed up investment decisions in Limerick's favour.

But official IDA and Government policy to ramp up Ireland's "knowledge economy" credentials tends to produce smaller batches of jobs, albeit better paid ones: 50 high-level jobs here and 30 "value-add" jobs there and very few of them a direct fit for the semi-skilled workers who have lost their jobs at Dell.

Recovery prospects for the mid-west economy, to which Dell contributed €140 million last year in wages alone, are also far dimmer than they were for the Galway region when Digital Electronics Corporation closed its plant in 1993.

That event, seen as devastating to the west at the time, led to the formation of a bevy of indigenous start-up tech businesses by skilled ex-Digital workers, eventually attracting new investors.

Dr Chris Van Egeraat, an NUI Maynooth economist who is an expert on the rise and fall of the Irish PC industry, says this trick will be much more difficult to pull off in Limerick. Even if start-up finance activity wasn't currently moribund, the highly skilled workers with the potential to form innovative new businesses are largely the same Dell workers who have kept their jobs, he says.

For the 1,900 Dell workers who have lost their jobs and the thousands more jobs at risk at Dell feeder companies, relocation and downskilling may be two of the deeply unpleasant alternatives to long-term unemployment.

"A small amount might find replacement work in similar - although not the same - semi-skilled positions in the medical device companies.

"The problem is there are clusters of these companies in Cork, Galway and Dublin, but not many in Limerick.

"It's not a nice situation," says Dr Van Egeraat.

"Some of them will be able to find work in the services sector, but they're not exactly having a party there either and the jobs may not be as well paid."

But "Dell bashing" won't help, he adds. "The best bet is betting on Dell itself creating jobs and adding to the positions they have left in the global service and supply chain management functions . . . I think we should be very nice to companies that have been good to us for 18 years."

But the days of large-scale manufacturing operations choosing to set up Dell-type plants employing thousands of local workers have been gone for some time.

And as far as other kinds of job creation are concerned, recession could actually result in making Ireland more competitive, according to Dr Don Thornhill of the National Competitiveness Council (NCC).

"There is the argument that for a small open economy, a short burst of deflation would allow us to correct some of the imbalances that have crept in," says Dr Thornhill.

The problem is, Ireland's competitors will also take the opportunity to cut their business costs.