Dell Workers and the European Globalisation Adjustment Fund

RTE reports today that 14 million euro will be provided from the European Globalisation Adjustment Fund to people who have been made redundant at DELL to assist them in the process of retraining and finding a new job. The website of this fund is available below and the basic idea is that the fund will support people who have been displaced by trade-related developments. It is intended only to fund active programmes rather than social protection measures. It is worth some discussion of this in light of the long running debate here about active labour market intervention.

link here

18 thoughts on “Dell Workers and the European Globalisation Adjustment Fund”

  1. The Fund seems to broadly support the sort of activities that FAS would always engage in where there are redundancies on a significant scale. Initiatives like this are probably going to happen independent of the economic merits, as they satisfy a need to be seen to be doing something in the face of high profile redundancies, and are applied to such a small proportion of all redundancies that the costs work out as being pretty modest.

    That said, the main elements of interventions such as this seem sensible. One-to-one mentoring, retraining tailored to the needs of those being made redundant, support for entrepreneurship and self-employment etc. The fact that significant numbers of people from similar backgrounds are being served at the same time gives rise to economies of scale in providing tailored support that are mostly not available when dealing with redundancies on a smaller scale.

    Given that some of those losing their jobs at Dell have strong technology skills, there’s a need to give anyone who wants to follow in the footsteps of the Digital Equipment workers who founded technology businesses after being made redundant many years ago a helping hand.

    I note that the European scheme provides for mobility allowances. This may have a particular relevance in the case of Dell, given that a large part of Dell’s assembly workforce is/was from overseas.

    While I’m glad to see money coming from Europe, given our current financial straits, I’d see the EU’s involvement in the area as being more a matter of branding and PR than substance. The overall size of the fund is about a euro per EU resident per annum.

  2. I note that the European scheme provides for mobility allowances. This may have a particular relevance in the case of Dell, given that a large part of Dell’s assembly workforce is/was from overseas.

    Wherever, or whoever gave you that impression, it is wrong. The major bulk of the workforce in Ireland was native Irish. I know that, because I spent a year working in the production facilities at Dell. I came to Dell, having left the small world of design and engineering consultancy, where typically the size of company was 10-20 persons. In the smaller world of consultancy, I was very familiar with two things. Firstly, a high staff turnover. Secondly, a very broad mixture of different nationalities working together in Ireland. I will say this much, working at Dell was a bit of a shock. While working for consultancies in Limerick I had wondered, where have all the Irish gone? It was when I moved to Dell factory, I figured it out. Most of the Irish workforce in Limerick was not working in the higher calibre service industry jobs that were available in Limerick, but packing boxes at Raheen instead. At a time when Dell had a workforce of 3,000 direct employees, about 2/3’s of whom were Raheen based, and several thousand more in the Raheen area serviced the Dell plant in one way or another – there were small ‘new age’ service sector businesses in the Shannon region who had to import a workforce. We should have got the European Globalisation Adjustment Fund, before we needed to make real adjustments I think. This is very much much a case of waiting until a problem gets so bad, it threatens to jump up and bite one in the face.

  3. @Brian, surprisingly, perhaps, i heard it from people working for Dell. The impression I had was that there had been a shift in the composition of the assembly workforce. But if your information is up-to-date, I’ll bow to your better knowledge.

  4. Con,

    I’ll take your word for it. I know that story kept doing the rounds, and I heard it from people working at Dell myself. I still found it difficult to swallow however. The reason is, going back a few years it was hard to find non-Irish people working at Dell production plant in Raheen. It was like Ireland in the 1980s where you just didn’t come across a multi-national. Dell in the early 2000’s was one of the last places in Ireland, where the workforce was hugely if not exclusively, for all intents and purposes Ireland based. As I mentioned before, it felt weird to me when I worked in Dell, having experienced the polar opposite working in the higher calibre service industry outside Dell.

    However, two points do occur to me. Say if a minority percentage of non-Irish people started to ‘fill the numbers’ working at Dell, then it would be like going from zero to say 10, 15 or 20% in a short space of time. That, to the established Dell Irish workforce would feel like, things were being ‘taken over’ by foreigners. You have to understand the sheltered environment that Dell plant was as late as the early 2000s. That was what really produced the ‘myth’ in my view that Dell employed so many non-Irish. The other thing I would venture is, to the ‘Paddies’ stuck packing boxes in Dell plant, and given the opportunity to make a few bob in the open sunshine building residential units, boxes of another kind, I am fairly sure they would choose the later. Obviously, Dell company itself wasn’t going to climb in terms of wages with that offered by construction in the boom years. That would have resulted in a certain amount of resentment from Irish workers in Dell, who were mature if not middle aged a lot of them. They would be witnessing young schools leavers working in construction making multiplies of their industrial wage, during the boom years. That make account for a very ‘sudden’ shift in the composition of the workforce.

    Of course, a word on Dell human resources, were not below using whatever leverage they could use. That is, look we can import a workforce if you do not toe the line. Sure, the Dell HR were thinking about the competitiveness of the business etc. But they often bought that at unacceptable costs to the dignity of their workforce. That might sound like a strong thing to say, but I will stand by it. In the end, the relationship between Dell HR and their workforce would not have been healthy. It never was from day one.

    So there are two reasons for a real, change in composition of the workforce, and one reason also for a ‘perceived’ change in composition of the workforce, in the imagination of Irish who worked at Dell.

  5. @ all

    If one is to look into the future for Limerick, what is the realistic chance the Tom Dell worker will gain employment in the coming years in a similar field or other field? Anyone want to identify other possible fields at the moment?

    Further, does anyone know if research has been done on what a rational expectation would be of the natural unemployment from the Innovation economy?

    FAS does seem to have been beached by recent unemployments. The days of sending Tom Dell off to do FAS welding course are gone. Tom is now showing up in one the Shannon consortium locations to do a degree, etc. Will this significantly increase the costs of retraining for the current age? To what outcome?

    Sorry for all the questions
    Few more beers before I can work on the answers..
    Al

  6. “there’s a need to give anyone who wants to follow in the footsteps of the Digital Equipment workers who founded technology businesses after being made redundant many years ago a helping hand.”

    While the discussion in the comments above might indicate that the numbers might not be large, it’s important that this be available – especially given the current credit situation. I’m personally familiar with an ex-DEC/Compaq hand who joined a startup in Galway – I imagine it would be harder to finance that now even if the same calibre of person is still around in Raheen.

  7. I felt strongly about this, and blogged about it earlier in the year. I want to emphasize something, I have not even mentioned above. I made the point also, in the thread about Jim O’Leary’s article about Migration. We never captured any information about who was coming into Ireland, in what kinds of areas they wanted to work and so forth. This is a European-wide challenge as I see it, because Ireland ‘happened’ to be the destination for the past number of years. Very soon, somewhere else will be Ireland, and that place wherever it happens to be, should try to make better use of the floods of immigration through their borders than we did.

    But getting back again to Dell. I criticised the HR department at Dell in my comment above. I want to criticise them a second time. When I sat down to do my interview at Dell, I was asked what my qualifications and previous experience was. I remember the surprise of the HR lady, who had a whole production line allocated to her responsibility, when she discovered I had no previous production experience. We asked me about my experience working in design and construction beforehand. All of that information about every employee was methodically captured as workers came into Dell. Where is that information today?

    From my own experience at least working in Dell, I was amazed at how many workers were actually trained and educated before they came to Dell. I worked beside one young man who had emigrated to the States and returned to Ennis. He had a degree in marketing. I remember another, who was a professor of English literature. Another who was a telecommunications expert who had worked in Israel, in the United States and the Netherlands. Personally speaking, I had been to university to study architecture. We were all standing in line packing cardboard boxes and sharing stories at our breaktimes.

    What I mean is, I would really like to get my hands on some of those HR interview stats from the Dell company and sift through them. When I watched the RTE coverage of the announced closure of the plant, I noticed how little emphasis was placed on the already existing skills of the Dell workforce. Not to mention their sheer work output in terms of keeping the operation going in Limerick. I look at my times at Dell computers, like how I look at my time at Zoe developments. I wear both on my chest as a badge of honour, of having served with some of the best people in those industries. I have no shame whatsoever. It seemed to me, when watching the Prime Time about Dell, that our minister nearly had a sense of shame about this workforce, what are we going to do with them. Not as if they were a resource, but more like they were a liability to be dealt with.

    I don’t know who is driving the bus that is Ireland Inc. But I would like to look at the real stats on the level of employee that passed through Dell over the years. I think we could be a lot more proud of ourselves than we currently are.

  8. You know, I was at a talk given by Ronan Lyons, Ireland’s leading number cruncher on property stats lately. It was again emphasised that Ireland has no real figures about property. Property, that which got us into the mess we are in, we don’t even have figures. Daft doesn’t have agreed prices, all it has is a very rich datastream of figures on ‘expectation prices’ of sellers, and it also registers when the sellers amend their ask prices up/down. But it doesn’t capture much more than that. Ireland had nothing at all, before Daft came about.

    Imagine the confidence now, with which Ronan can draw his diagrams, maps and use his Economist’s spectacles to look at his data to draw useful observations. Which he then passes on to businesses. There was a comment at Farmleigh made by someone – don’t waste a crisis. In other words, use it as an opportunity to learn, to inact changes in the system. The social welfare departments could look at ways to monitor the composition of their ‘members’ for want of a better term. As Bill Hobbs said on Today FM Radio I think, it is like trying to pin a ball of smoke to the wall. We are going about discussion without much in terms of good raw data.

  9. The report on this says that it has been approved by the Commission but still needs agreement from the Parliament and the Council of the EU. I doubt that the president of the EU commission is planting trees that will be dug up after the election so perhaps worth continuing to discuss this as if it is going to happen unless people more familiar with this process think this could conceivably be shot down.

  10. Liam,

    There is something I might add about the figure. I recall a story told to me, by someone closely involved in the distribution of Agricultural funding from Europe in the Limerick region. This is a couple of years ago. It was announced there would be a fund available of €4.0 million Euro to spend towards saving ‘built heritage’ and old style farm houses etc in Ireland. The mandarin in charge of the scheme, it may have been Duchas, I am not sure, but he was a very knowledgeable chap with great PowerPoint slides, wonderful prose and ambitious language etc about saving the heritage. The crowd of farmers present in Limerick that evening were very impressed. Because they thought that the entire €4.0 million of the fund was allocated to Limerick.

    At the end of the man’s talk however, it became aparent, the €4.0 million would have to be spread throughout the country of Ireland. At that, the farmers all basically laughed aloud. The second speaker on that night was from the department of Agriculture. He was there to announce an EU budget allocation of €500 million or some figure such as that for the entire country. His figure was reduced compared to previous years also it seemed. So in other words, the first speaker about the old cottages with the PowerPoint slides and the €4.0 million euro had be put up as ‘a cork shot’ it was mentioned to me. In other words, if you think the €500 million for the entire country was bad, this is how bad it can really get.

    The man with the cottages and his slide show had built up the expectations of his audience, being quite gullible in front of an audience of grant-hungry farmers. But the anger was diverted at the slideshow man. It blunted the knive aimed at the department of Agriculture. Normally when I see announcements to do with these small figures, with big hype etc, and lots of people ganging up for photo shoots and publicity – I always think it is a kind of side show to something else. We don’t know what that something else could be. What else is there left to go bust in Limerick or Shannon? The Diamond plant, I don’t know.

    I have all the respect in the world for slideshows, research, analysis etc. But we need to get real about economics too. While €14.0 million might be a very interesting ‘project’ for a couple of senior mandarins in some public body to see over, it is not going to turn around the fortunes of up to 15,000 affected people in Raheen. I make that around €10,000 per person. That only works with the idea they are all single – there are not kids and families dependent on those 15,000. It is only the equivalent of six months dole or something.

    I think we would be better off spending some of the €14.0 million to gather information about that workforce. We have been engaging in discussion above, and we don’t even know their composition of nationality. Never mind what their skill levels, age profile or other status may be. A bunch of economists here are trying to stab in the dark. That is the whole problem facing Ireland as I see it.

    Let me give another example, below, given this is the weekend of our Irish Davos. It might be pertinent to Limerick, given that Limerick has a University with I understand a decent enough dept. of Engineering.

  11. Why couldn’t Limerick start to manufacture Smart Meters? They are a bit like Dell computer boxes. Basically, all a smart meter is, is a PC.

    As I understand it, the ESB Networks guys want to wait first to see developments in the US and Britain. That seems clever to me. It is like the video tape war of formats – VHS or Beta. We could pour investment into this and get it wrong. However, Limerick University is there and could get involved, along with consultation with ex. Dell staff who know about manufacture, lead times, supply chains etc.

    We might have more human resources and expertise in Limerick than we think. We simply don’t know. There might be a way to spend this €14.0 million in a ‘smarter’ way, by using it to kick-start a project in UL university, which could be linked to some project on the outside, to implement the research work. That would make more sense for Limerick than dole-ing out €10,000 to each one of the 15,000 affected workforce.

    I was at a meeting of a sustainable economic policy creation think tank recently, which includes some members of the Green party. One fellow, who presented a lot of the projects reminded me of a crazed Hollywood director trying to sell me a script for a new disaster movie. But a conversation I had with one of the older Green members was more helpful. He recently sold his wind generation company at a handsom profit he told me.

    He told me that the electrical engineering faculty at UCD is now gone. They offer degrees, but have no staff as such on campus. He told me that the DIT electrical engineering faculty was saved by the fact it made bridges with Chinesse universities and they now send some staff over to Ireland.

    This is the keen kind of observation I believe, the older Green party members do make. The observation about UCD electrical engineering department rang alarm bells in my mind. Because I attended an Eirgrid lecture last year and a lecture by a tidal energy generation company in Ireland. Both concluded their lectures in saying, that Ireland will require graduates in electrical engineering to do research and solve problems.

    I seem to hear a lot of talk about reports, about being ‘smarter’, about getting more for less at the moment. But there is a rather basic observation about the electrical engineering department at UCD, and nothing seems to be done about it. It is a real emergency. Not as ‘sexy’ as the Hollywood movie script that my friend from the think tank was trying to pitch to everyone.

    But still, I see a lot of sales talk in the media about Smart Meters and whatever by the Green party, by Fianna Fail. But very little action at a level where action is required today.

  12. BTW, one of the huge problems with the smart meter concept, is to get prototypes out there and getting them de-bugged. To understand better how much intelligent is stuck to the wall of the person’s house, or how much intelligence is contained at a central location. The manufacture of a couple of thousand units is a trivial matter for Dell ex. employees. They pushed out over a million units a quarter in the past. Understanding how to build them economically, so that they can work is the harder part. The smart meters they create in Limerick could be put into the field. The same employees who work to build them, could venture out into the field and survey them working in the real environment. Over time, we might get towards a business model, a product, a strategy and identify markets. All kinds of departments at UL could be invovled. The €14.0 million matched with support from local level in Limerick, i.e. early stage investors could amount to something.

    Apologises for the length of my rambling. But having so much experience working down there, I do feel a little bit hot under the collar about it all. Apologises.

  13. Just looking back at my original comment and at Liam Delaney’s subsequent comment, I should clarify that I have no reason to doubt that the EU will come up with €14m in relation to Dell. The point I intended was …

    €500m per annum cannot reach more than a very small proportion of those who are made redundant. It seems to go to high profile redundancies, which would probably (almost certainly in Ireland’s case) attract a broadly similar nationally or regionally funded intervention if EU funds were not made available. So, between its small size, and its tendency to displace similar interventions, it probably does not have much net impact on the labour market. However, it does produce lots of good publicity. Under our current tight budgetary circumstances, we should be happy that we the EU is picking up the tab on the Dell intervention.

  14. @Brian, if you do a little digging, you’ll see that UCD still has Electrical Engineering faculty. I have a notion that the department may have merged with Electronic Engineering (they were always at most semi-detached from each other), but there are still a number of academic staff whose focus is on Electrical Engineering, and there are active research groups in the discipline.

  15. “The Commission has approved the Irish application for €22.8m, of which the EU will contribute €14.8m and the Government €8m, to retrain, upskill and offer further educational opportunities to up to 2,400 affected workers. Ireland’s application is amongst the largest ever approved under the EGF both in terms of financial aid and the number of workers being assisted,” according to a press release from the Minister of State for Labour Affairs.

    Following on from Con’s comment, this again illustrates the contrast between collective power and the powerlessness of the individual in Ireland.

    The typical private sector worker not only does not have a pension but the basic statutory redundancy is only available when a job is lost — again as with the data on development property transactions, or more accurately
    the lack of it, this is an area where at official level, it’s better not to collect relevant data to publish.

    The closure of a big company where staff are likely to be earning more than the average, prompts a State “task force” – – in this case under the chairmanship of former Kerry Group chief Denis Brosnan – – and public money for consultants providing advice on producing CVs, starting a business etc is provided.

    Some workers will likely benefit from some of the attention but another unemployed worker frm the Raheen estate may have just got basic redundancy and no special State/EU funded services.

    The Dept of Entemp says, to date there have been 25 applications to the EGF for assistance across the EU. So far 18 have been approved to the value of almost €80m. The total value of aid sought to date under all applications is in excess of €130m.

    The Irish application encompasses redundant workers at Dells’s Raheen plant in Co. Limerick and in the following ancillary enterprises: –

    · Banta Global Turnkey
    · Irish Express Cargo (Flextronics)
    · Cube Printing
    · Rehab Logistics
    · RPS Engineering Services
    · Sodexo
    · Sercom
    · Novo Strat

  16. “The typical private sector worker not only does not have a pension but the basic statutory redundancy is only available when a job is lost — again as with the data on development property transactions, or more accurately
    the lack of it, this is an area where at official level, it’s better not to collect relevant data to publish.”

    @ Michael Hennigan,

    Glad I wasn’t the only one who notices.

    “Some workers will likely benefit from some of the attention but another unemployed worker from the Raheen estate may have just got basic redundancy and no special State/EU funded services.”

    I am familiar with the list of companies you listed there. Basically, Dell rather than try to persevere and try to retain competence in certain stages of their production line, they instead outsourced to specialists who located right along side Dell’s plant at Raheen. Of course, that was a big risk for the likes of Banta, Flextronics, Cube etc. As they were pinning a lot on the existence of one major operator on that estate.

    I mean, in fairness, the Dell operation was anything but high-tech. It may have been a high tech product they were shipping. But the assembly of the products was less than high tech to be honest. More a test of sheer physical endurance and concentration. It was mentioned that the plant at Raheen wasn’t particularly suited for small, intricate electronic devices. I am sure that is so. It costs too much to build new plants at this stage in Ireland. Imagine how much less you could build a ‘state of the art’ plant in Poland for today.

    My understanding is that the plant Dell had at Castletroy was a much more state of the art facility than Raheen. People who had worked at the Castletroy plant had told me, they knew when they saw how basic the Raheen plant was, having been moved over, that Dell had already made the decision back in the early 2000’s that Ireland wasn’t going to be its permanent home. Raheen was only thrown together fast and had a tax incentive tied to it, over a ten year period, which also runs out around now.

    The other thing to note, is that on foot of EU recommendations, Ireland was expected to increase ‘competition’ in the energy production sector. Ireland being a market roughly the size of Manchester in terms of energy requirements, you can see how difficult it is to incentive-ise competition.

    Then minister for Finance, Brian Cowen instructed the ESB to raise the price per unit of electricity, in order to create enough margin for several foreign players to move into the Irish energy production business. To dislodge the old monopoly held by the ESB that is. I don’t know what arrangement that Dell had with the ESB, but I am sure the artificial raising of utility prices had an impact on them. Basically, Ireland should have cheap power, but we are facing into a period where other factors than the price of production are being built into the ‘cost’ of a unit of power. No doubt, Dell saw that coming down the line also. Poland on the other hand, have mountains of coal and all the desire in the world to make use of it. There are developments in clean coal power production underway also. I think that east coast power plants in Britain are going to burn coal and make use of North Sea proven geological used-up gas/oil wells to store emissions.

    Dell being in Raheen lifted a lot of other boats. I mean, you don’t have to be a genius to understand it. Without Dell being there, the surrounding industrial park could not have witnessed the same level of activity or profile. I think the ‘profile’ is an insubstantial, un-quantifiable thing. A bit like the talk at Farmleigh this weekend, I don’t know how many times I heard mention of the fact that Google, Yahoo and Facebook are in Ireland. In an international scene, the presence of those firms seems to count for something.

    I am delighted on the other hand, for a country such as Poland to attract a company such as Dell over there. It certainly makes a lot of sense from a logistical point of view. A bit like Ireland welcomed Dell many years ago, Poland is today. Best of luck to them.

    Being trained as an architect myself, I would have skills of observation and I did notice that Raheen industrial estate was changing a little bit as the 2000’s progressed. I began to see more office space, with good bit floor plate areas starting to be built in Raheen. A bit like the composition was changing from open space factory sheds, towards knowledge economy kind of stuff. I know that Intel had a branch of their operations in Shannon also, that wasn’t anything to do with manufacturing wafers. Rather it was knowledge based stuff again.

  17. I don’t know how many of you are familiar with the work done by Ross Perot’s company – I have a pretty good idea of where it fits into the scheme of things. From RTE news:

    US computer maker Dell is to buy computer services firm Perot Systems in a deal worth $3.9 billion.

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