“The company pressed ahead with the cuts despite personal pleas..”

According to an iol report the Dell move out of Limerick to Lodz in Poland – noted earlier by Mick – included a €50million €52.7million aid package from the Polish Government. The European Commission will now decide whether that sweetner breaches EU state aid rules. From the iol report

Competition Commissioner Neelie Kroes said there were doubts whether the lucrative deal passed strict rules on state 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 EEA,” Mr Kroes said. Concerned parties, including the Government, will be able to offer their views on the €50m package. The EC said it would rule on the aid package by July.

Also from the iol report

EC officials will assess whether the aid is an incentive for investment and if the benefits outweigh the effect is has on competition.

Dell’s move east sees Ireland suffer one of its single biggest job losses in decades with 1,900 workers facing redundancy by next January.

The company pressed ahead with the cuts despite personal pleas to the firm’s founder Michael Dell by Tánaiste Mary Coughlan and Defence Minister and Limerick TD Willie O’Dea during a trade mission in Texas last year.

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  • joeCanuck

    It’s dog eat dog and beggar my neighbour in the business world. Nothing unusual.

  • The Raven

    Yeah…Seagate left Limavady *despite* approximately £40m being given by Invest NI over the preceding ten years.

    Having said that, even if Seagate had said at the outset, “we’re only going to be here for twelve years”, they’d still have been welcomed with open arms. And rightly so, for the time.

    I wonder if the move will be halted by an EU investigation. I doubt it.

    250 to go at FG Wilson, as predicted. 1200 to go at Nissan across the water. Fintec laying off its workforce for a month.

    Today is the sort of day that shows “Sinn Fein plans reshuffle” and “When the Irish Political World went mad” for the trifles that they actually are.

  • Pete Baker

    Raven

    “I wonder if the move will be halted by an EU investigation. I doubt it.”

    You’re probably correct.

    But it would make the second Lisbon Treaty referendum very interesting..

  • Dave

    “It’s dog eat dog…”

    Except that the EU operates on the principle that the bigger dogs build kennels for the smaller dogs, which doesn’t support the principle of ‘dog eat dog.’ I fail to see why Ireland should transfer taxes from its state to the EU which are then used to develop the infrastructure of states that will directly compete with us – and do so with the advantage of wages that are 20% those of Irish wages.

  • Rory Carr

    Dell off to Poland.Right so. At last a chance to get our own back with a flood of Irish workers to Lodz ( “Lodz” – can’t even get a proper Irish name for their towns – I ask you) where we can all demonstrate Irish ability to work for shit wages just as well as they can and spend our free time complaining that you can’t get a decent sausage and that the Polack ones are all crap. We had better keep it quiet about how we are better Catholics than the Polacks though because the ungrateful bastards will pull out the oul’ trump card and go, “Nanana, the Polacks got a Pope and the Paddies got a Paisley!”

    But I’ll be all right anyway. I blame international corporate capitalism meself. Besides which I am a Communist and the old Polacks love all us Communists. Don’t they?

  • Mark McGregor

    Since ‘State Aid’ seems to be the issue we may as well have a look at Article 87:

    Article 87

    1. Save as otherwise provided in this Treaty, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market.

    2. The following shall be compatible with the common market:

    (a) aid having a social character, granted to individual consumers, provided that such aid is granted without discrimination related to the origin of the products concerned;

    (b) aid to make good the damage caused by natural disasters or exceptional occurrences;

    (c) aid granted to the economy of certain areas of the Federal Republic of Germany affected by the division of Germany, in so far as such aid is required in order to compensate for the economic disadvantages caused by that division.

    3. The following may be considered to be compatible with the common market:

    (a) aid to promote the economic development of areas where the standard of living is abnormally low or where there is serious underemployment;

    (b) aid to promote the execution of an important project of common European interest or to remedy a serious disturbance in the economy of a Member State;

    (c) aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest;

    (d) aid to promote culture and heritage conservation where such aid does not affect trading conditions and competition in the Community to an extent that is contrary to the common interest;

    (e) such other categories of aid as may be specified by decision of the Council acting by a qualified majority on a proposal from the Commission.

  • We could do with a blog on how Brown and the BoE are repeating every mistake the Japanese made in the 1990s without having the same industrial base as Japan, and are threatening to rip the pound apart and lump the poor with the consequences of imported inflation to deflect attention from the debt spiral they created with their ‘lowest mortgage rates in 320 years’.

  • Suilven

    Dave,

    ‘I fail to see why Ireland should transfer taxes from its state to the EU which are then used to develop the infrastructure of states that will directly compete with us – and do so with the advantage of wages that are 20% those of Irish wages.’

    But it was OK for other EU states’ taxes to be transferred to Ireland up until recently, for it to do exactly the same? ‘Tis merely sauce for the Polish gander also, if you ask me.

  • Cahal

    Sammy, you’d be right at home on thepropertypin.com
    Go on, you know you want to.

  • aquifer

    On beggar thy neighbour. Will our executive or BERR also be protesting to the EU or are too many of them glad to see the Celtic Tiger declawed?

  • Dave

    “But it was OK for other EU states’ taxes to be transferred to Ireland up until recently, for it to do exactly the same?”

    Absolutely. If a fool wants to give you his money, take it safe in the knowledge that there is no reciprocal obligation on you to give your own money away. We are competitive nation-states, not a bloody commune of hippies. And while I’m giving you free tips: don’t donate a percentage of your profits to your competitor so that he can build a bigger factory than you. That’s just stupid.

    7 million tonnes of fish were extracted from the fishing waters of the EU under the Common Fisheries Policy in 2005, with an unprocessed value of €15.12 billion. Officially, 23% of that was extracted from the Irish Box, giving a financial gain to the EU of €3.4776 billion at the direct expense of Ireland. Unofficially, the figure is over 40% because the Irish coast guard is so woeful at monitoring the extraction that it doesn’t even know what the quotas are. None of that extraction of wealth from the Irish sea has ever been counted as part of Ireland’s financial contribution to the EU. Were it to be counted, it would be shown that Ireland has given to the EU a multiple of the funds that it has received from the EU. The dismal fraud that is the EU owes us well in excess 100 billion and counting. And by the way, 90% of funds that Ireland received from the EU went to the farmers. That did nothing for the Irish economy except retard it by keeping the farming industry in the dark ages by making it uncompetitive and subvention-dependent while forcing consumers in the EU to pay higher prices for their food.

    The actual function of the EU is to keep 170,000 bureaucrats in employment.

  • Gregory

    Poles have a right to work in Poland,

    there are benefits ( for everybody) if they can get a turn in their own country and state aid is a competitive thing.

  • Dave

    Who is disputing that? My contention is that we should not be financially supporting countries that are competing with us. There is a difference between countries within the EU competing with each other for FDI and countries within the EU trying to lure investment from one country within the EU to another. Dell accounts for 5% of Irish exports and adds hundreds of millions to the Irish economy annually, so this is a very substantial loss to Ireland. Why on earth are we donating Irish taxpayers’ money to the EU when it is being used to build a competitor’s infrastructure? In addition, foreign companies locating in Poland can secure EU funding for up to 70% of their investment costs under the 2007-2013 program. Billions of Irish people’s money is being used to finance our competitors in Eastern Europe, who already have the advantage of wages that are a fraction of Irish wages. That is insane.

  • Gregory

    “Billions of Irish people’s money is being used to finance our competitors in Eastern Europe, who already have the advantage of wages that are a fraction of Irish wages. That is insane.”

    The US is driving on Chinese rubber as opposed to Akron tires, that’s capitalism when it is asking for entry on a container ship.

    and moderated or confederated capitalism will still be a bit eccentric, Alabama will try and steal jobs from Detroit.

    I favor Poland over Ireland for pro-Vatican reasons, so given I or P, as neutral choices the latter makes more sense to me.

    ‘Why on earth are we donating Irish taxpayers’ money to the EU when it is being used to build a competitor’s infrastructure?’

    The value of investments by US companies in Ireland has grown from $36 billion in 2000 to $87 billion in 2008.

    Why should the US invest so much in a country which has a large and influential anti-American lobby?

    If it is profitable, why not, and if the Poles have a better offer, why not?

    Gregory

  • The Raven

    Gregory in “speaking sense” shocker. If there’s a salutory tale to be told for our own statutory agency charged with business development, it will be to start pulling in its horns, and putting some of that taxpayer cash into local businesses at a time when they need help most.

    Oh, and in a fashion that actually makes it easier to access.

  • Dave

    Gregory, I have’t claimed that companies should be prevented from moving wherever they want. I have claimed that we should not be financing competitor states.

  • Dave

    And, by the way, the amount of member states money allocated to Poland by the EU for the period stated is 67 billion.

  • Suilven

    Dave,

    Your fishing example is a total nonsense – how can you think it make sense to directly offset lost fishing revenues en masse (not even the profits of the fishing industry, though these are scarce on ground these days) against taxation transfers from EU funds. I’d have thought someone as apparently pro-business as you would understand the difference between revenue, profit and tax take.

  • Dave

    Actually, Suilven, it’s far from nonsense. The value is, as I said, is “an [b]unprocessed[/b] value of €15.12 billion.” In the fishing industry, the [b]processed[/b] value is up to 40 times the [b]unprocessed[/b] value. The value of the loss to Ireland was €3.4776 billion in 2005 (and, processed, a huge multiple of that).

  • Dave

    The rather obvious point being that surrendering fishing rights in Irish territorial waters to the EU under the Common Fisheries Policy has decimated the Irish fishing industry and literally given away billions of euros worth of stock every year from those waters to the EU, resulting in a direct loss to the Irish economy given that, were it not given away, it would be under Irish sovereign control and used for the benefit of the Irish economy. You might note that the EU also imported 6 millions tonnes of fish in 2005 (the last year that stats are avaliable for), so there would have been a ready market for Irish stock

  • kensei

    Sammy

    From my reading, there were three major factors in Japan:

    1. They ran into a liquidity trap by running into the zero lower bound of interest rates.

    2. Japan’s banking system was a mess, and they allowed banks to carry on indefinitely with bad debts without facing up to relaity.

    3. They were not prepared to run a fiscal stimulus for a sustained period in order to try and prime the pump.

    4. They allowed deflationary expectations to develop.

    1 is certainly possible, but I am not sure it follows that keep interest rates comparatively high makes any sense whatsoever. On 2 the bnaking system is still a mess but they have had to realise huge losses, and will again if need be. On 3 Labour is currently pushing the limits on what it can spend, and on 4 there is talk of quantitive easing and the like to try and force some inflation in. Japan is clearly ion everyone’s minds, both here and the US.

    IDGI

  • Comrade Stalin

    Dave’s argument is nonsense for other reasons. The EU is a common economic area. Different parts of Ireland and the UK cross-finance each other all the time; taxpayers in England pay subsidies to InvestNI which gives grants to companies to encourage them to set up shop in Belfast rather than Birmingham.

  • kensei

    4 factors, obv

  • ZoonPol

    I am sure the EU will take account of last year’s referendum in Ireland when it comes to delivering an opinion.

  • George Hook made a good point on Newstalk about how when people see the EU as sending jobs from Ireland to Poland it won’t bode well for Lisbon II.

  • Ulster “the Poor Mouth” McNulty

    “…Dell move out of Limerick to Lodz…”

    I know……

    Instead of celtic tiger style marketing of our “young highly educated English speaking workforce”, why don’t we emphasise our “young, highly educated, poorly paid, hard working, Polish speaking workforce?

    and instead of telling everybody we are one of the richest countries in the world, self confident and at ease with ourselves, why don’t we tell them we are dirt poor, nuts, and it’s all the fault of the EU.

    and instead of telling everybody we are a sophisticated country where consumption of cofee has recently surpassed consumption of tea, why don’t we tell them we have to build motorways through our ancient archeological sites just so’s people can get to Newry to buy enough booze.

    Dave

    “Absolutely. If a fool wants to give you his money, take it safe in the knowledge that there is no reciprocal obligation on you to give your own money away..”

    That’s a sure way to lose friends, we could at least give them some of our fish.

  • Dave

    Sure, why not…they are kind enough to give us 4% of the EU quota for catching our fish.

  • Greagoir O Frainclin

    It was inevitable that this would happen in Limerick…and there will be more. This credit crunch spares no one.

    But Apple and IBM are thriving at the moment in the Irish Republic. They have taken on extra staff last year.

    Regarding Dell,
    Well let’s all fuck off to Poland and get a job there! I’m sure they do a good breakfast roll!

  • Greagoir O Frainclin

    …washed down with Vodka of course!

    Nas Drovia!

  • niall

    Dave,

    I’m with you on the fishing rights, it’s the Gombeen man who sold us the story to appease the farmers that our subsidised asset rich farmers stripping out subsidies was good. A nation of farmers as opposed to an Island!

    What the Dublin Governments have needed all along through clesiastical abuse, Gombeen stupidity and corruption and unquestioning patronage to the EU was a substantial politicised dissenting minority with a bullish streak for independence who were unconcerned by criticism. Like the Unionists.

  • niall

    …….or I suppose I mean the Ulster Scots.

  • Ulster McNulty

    niall

    “Like the Unionists”.

    I’m not too sure what either you or Dave are on about, but I think you’ll find that the unionists like their EU agricultural subsidies just as much as the next man.

    I don’t remember many dissenting unionists complaining about being swindled out of their huge fish wealth for the price of a paltry agricultural subsidy.

  • Mack

    Ulster McNulty – I think he is suggesting that the Irish government need responsibility for the north like a hole in the head.

  • Greenflag

    ‘Billions of Irish people’s money is being used to finance our competitors in Eastern Europe, who already have the advantage of wages that are a fraction of Irish wages.’

    Only a certified neo con nutter could make a statement like that . How can it be an ‘advantage ‘ for anyone to have wages that are a fraction of Irish levels . Carry on with this kind of thinking and you’ll soon conclude that it would be even more advantageous if people were paid nothing at all and were kept on the verge of starvation the better to appease the forces of Mr Madoff & Co and the rest of the degenerate and criminal financial services class 🙁

  • Ulster McNulty

    Mack

    “I think he is suggesting that the Irish government need responsibility for the north like a hole in the head”

    Either I don’t get irony or what he is really suggesting is that Ireland needs “eurosceptics” (like the unionists).

    Furthermore his logic probably dictates that Ireland would benefit from being United and out of the EU – even more fish in the Ulster Box.

    In fact what Ireland would need is a government of charming Eurosceptics (the unionists) to win over the southern electorate, but in coalition with “Rock on Rockall” Republicans with their RPG7’s and dingies to defend the the United Ireland Box against the inevitable EU sponsored Spanish Armada.

  • niall

    Ulster McNulty,

    Yeah, a little mad perhaps but I do think a United Ireland would have had a much better relationship with the EU……… and probably a government that was fit for purpose too.

    Instead it is as the financial times recently suggested a banana republic which practiced parasite economics in an unprecedented boom and became self congratulatory pompous to an extent that’ll look ridiculous from this date on.

  • Ulster McNulty

    niall

    “Instead it is as the financial times recently suggested a banana republic which practiced parasite economics in an unprecedented boom and became self congratulatory pompous to an extent that’ll look ridiculous from this date on.”

    Good evening, yes, I agree 100% with that, absolutely spot on. Did the FT actually refer to Irish pomposity – if it did I’m impressed. I am not pleased that it’s turning sour but the “Celtic Tiger” bullshit was just so inappropriate and difficult to listen to right from the beginning.

    Oh well, looking on the bright side, the current state of affairs should give us some good material for the next wave of Irish misery lit.

  • niall

    well they said banana republic. I added the rest and take no pleasure in it.

    Well not much as there are a load of aresholes without an ounce of humility during the bubble i’d quite like to re-discuss economics with now.

    That would make me an Irish begrudger……. perhaps I’ll write me a book.

  • Gregory

    “Gregory, I have’t claimed that companies should be prevented from moving wherever they want. I have claimed that we should not be financing competitor states.”

    The USA has aided Ireland, despite the fact that Michigan was not doing so good.

    If one is in the EU, that’s the same (kind of) as a rivalry between California and West Virginia.

    Using WV state funds to boost California, would be different.

    In our heads we need to remember federal and EU are a co-existing layer.

    Am I missing something?

    Gregory

  • Gregory

    “Well let’s all fuck off to Poland and get a job there! I’m sure they do a good breakfast roll!”

    We have an advantage on the Germans,

    if we arrive in a convoy we are unlikely to be charged by Polish cavalry.

    Gregory

  • Harry Flashman

    “4 factors, obv
    Posted by kensei on Jan 09, 2009 @ 09:36 AM”

    No one ever expects the Spanish Inquisition, eh Ken?

    Four, four

  • Celina

    ᴌ odz is the name of the place. I hope everyone got ᴌodz(Wuds) pronounced correctly.