There are fears locally that Dell could reduce their Limerick workforce if the company begin mass production of laptop computers in another European site.
Lodz in Poland has already being identified as one potential location and Dell employees this week contacted the Limerick Leader saying speculation was rife that the future role of the Raheen facility is in "serious doubt".
A spokeswoman for Dell computers said the Limerick plants were "extremely important" but admitted that the company were looking to set up a base in Eastern Europe.
"For the last two years we have been looking to set up a factory in Eastern Europe but have made no announcement on it yet. Ireland is well placed to serve our customers in Western Europe but Central and Eastern Europe are becoming stronger markets and we need a factory closer to these areas," said the spokeswoman.
Some Dell employees in Limerick have already been approached about taking jobs in a new European plant.
"Obviously we would be looking for people in Limerick who have already got the necessary expertise to help set up a new operation. They would be needed to get it up and running," the spokeswoman acknowledged.
Of the 4,500 people employed by Dell in Ireland, over 3,000 are employed in Limerick. Dell's shares hit a five-year low earlier this week at $19.02 (€15.07). The share prices has fallen more than 50 per cent over the past 12 months.
A new European plant in Poland will compete with Dell's Limerick manufacturing operation, currently their most efficient in the world. Limerick would no longer be the sole supplier to customers in EMEA (Europe, the Middle East and Africa).
Reports suggest that Dell are considering setting up a €120m factory in Lodz, Poland which would create 3,000 jobs directly and another 9,000 sub-contractors. Poland would provide a low cost European economy with plenty of access to skilled engineers.
"It would be a far cheaper work force and would be easily accessible to the new markets in Russia, the former Eastern European bloc countries and the Middle East--there is no way Limerick could compete with this," one local employee said this week.
The Dell spokeswoman said the Limerick bases would be needed for their proximity to the Western European market.
Dell chief executive Kevin Rollins has acknowledged that the company intend to reduce operating costs in Limerick. In 2004, the group took €80m in costs from the Raheen base.
Late last year, 60 staff were let go by Dell in their Irish operation. After the technology bubble burst in 2001, the company let 5,700 US staff go.