Limerick’s blackest day: A decade on since Dell cut 1,900 jobs at manufacturing plant

TEN years ago this week, Limerick's economy was rocked to the core as Dell announced it was to cut 1,900 jobs from its flagship European manufacturing plant in Raheen.

The move - described by this newspaper as our ‘Blackest Day’ - saw the face of Limerick’s economy change forever, with more companies employing fewer staff, and the focus switching away from larger companies.

The reliance on the Austin, Texas, computer manufacturing firm was stark here.

In 2007, Dell paid €140m locally to its 3,000 staff, the firm employing 5,000 at its peak here, assembling and shipping laptop computers - a function that would migrate to Lodz in Poland, where staff costs were significantly cheaper.

From hotels to taxi firms and small cafes, no sector was safe from Dell’s footprint, with several sub-supply firms in the weeks after January 2009 announcing staff reductions as a consequence of the tech firm’s wind-down.

In the immediate wake of this, former Kerry Group chief executive Denis Brosnan, who was not unreasonably expecting a quiet retirement following a career at the top, was instead called upon to head up the Mid-West Jobs Task Force, a move which arguably has led to Limerick becoming the city we see today.

Recalling the aftermath of the job losses, Mr Brosnan said: “We needed to be patient and come up with a complete plan for the Mid-West which would revitalise it over a period of time.

“The world was in a bad place. The recession was biting everywhere, and Limerick was worse off than any of the other cites around. Remember, unemployment at that stage had hit 18% here.

“So one in every five people did not have a job.”

Within months, the jobs task force had issued its first report which recommended the joining up of Limerick’s two local authorities - a move that was not to everyone’s liking - as well as other agencies working together more.

It paved the way for Limerick City and County Council, Limerick Twenty Thirty, plus the establishment of the city as a financial hub, and a renewed focus on the Mid-West by the job creation agency, IDA Ireland.

Maria Kelly, who in 2009 was the chief executive of the Limerick Chamber, recalled her frustration that back then, there was no “unifying voice” locally.

“This was always something I felt very strongly about. How can we get behind things, all follow and agree to things,” she asked. “We didn't have a big plan - there was a gaping void. There was nothing for us to look at, to inspire us and motivate us. People got on, there was no fighting. But we didn’t co-operate as there was no unified force behind anything.”

On the eve of Dell announcing the shedding of two-thirds of its workforce, local TD Willie O'Dea, who was then at the cabinet table, flew to Dell’s headquarters in Austin with former Enterprise Minister Mary Coughlan in a last ditch attempt to persuade the computer giant to retain its manufacturing staff here.

Ten years on, he admits now he travelled “more in hope than expectation”.

During a meeting with Michael Dell, who had recently returned to the company he had founded, Mr O’Dea said the businessman was very matter-of-fact.

“He said it wasn’t personal, it was just business,” the TD recalls.

“He said he was a businessman, competing with other people selling the same product. They are now producing them cheaper than me, so we need cheaper labour, and we have no choice but to go. He said he didn’t want to go.”

With the recession only just beginning to bite, it was the worst possible time for people to be losing a job.

The human cost remains to the forefront of Cllr John Gilligan’s mind.

The city’s mayor in 2008/09, he still reserves a lot of ire for Dell at the way he felt the firm treated its staff on the job losses.

In 2006, the company opened its facility in central Poland, but continually insisted it would not impact on its operation in Raheen.

This, Cllr Gilligan claims, “lured workers into a false sense of security”.

“It wasn't until it unraveled, we realised the enormity of this,” he said, pointing out workers had taken on mortgages, car loans and the like.

“We felt very betrayed by Dell. Had Dell told them three years previously that there will be redundancies, that they would phase out some of the jobs, people would not have taken on the financial commitments that they had over the last couple of years. I found that very bad. [In that event], people would have just lost their jobs. But now they were losing their homes, they were losing their cars, there were lots of things they were losing which were not necessary,” he said.

Many people took several years to find work again.

For Garryowen man Gerry Hinchey, it was 2013 before he was back on the payroll, following a two year CE scheme at Citizens Information.

“I’ve no doubt there are a lot of people who haven’t worked since Dell though. People I’ve met are still signing on or are on schemes,” he said. “But it’s the same as anything: we thought Dell closing was the end of the world. But people survived - they always will. You can’t be looking back, there is no point. The way I looked at it Dell was Dell, and there was life after that.”

Denis Ryan, from Newcastle West, set up his own landscaping company which he says continues to go from “strength to strength”.

But he acknowledges that people his age - in his early 50s when Dell’s manufacturing plant shut - may have struggled to find new work.

Clarina man Anthony Lynch only started working full-time again last year - incidentally back in Raheen - at Tungco, a recycling firm.

Dell had announced a wind-down of its manufacturing operation over the course of 2009, with the final staff leaving that December.

Anthony was present when the factory closed for the final time.

“It was gut-wrenching as you can imagine. From having 3,000 people and then all we could see was the lines being stripped. It was a shell when we left. No facilities, no nothing. We were there gathering the remainder of the material and shipping it off to Poland. It was a horrible experience,” he said.

Economist Dr Stephen Kinsella remembers the shock felt among Limerick people who were left “realising what they had considered as a Limerick institution, was in fact a multi-national company, whose only job is to make money”.

“As long as we depend on a few very large companies, who are not from here, we are always exposed to the threat they are going to leave. That’s not economics, that’s common sense,” he added.

Things have indeed changed now, and Limerick has moved up the value-chain, jobs-wise.

The Dell factory is now home to Regeneron, which employs close to 800 people developing drugs for people with serious medical complaints.

Last year, Mr Brosnan caused a bit of controversy when he suggested Dell closing its facility here was probably one of the best things to happen to Limerick.

Despite criticism, he stands by his assessment.

“Limerick had been in decline for a long time. It had the first of the major manufacturing jobs which came to Ireland.

“As they began to close down, Dell was the one which put the shockwave into the system, where government had to react. People tell the story that if you put the frog into water and heat it gently, it will stay there until it dies, whereas if you drop it into hot water, it will jump out immediately.

“Something traumatic needed to happen in Limerick for government to act,” he said.

“Would they have reacted if Dell hadn’t happened? History can only tell that, but my view is probably not. It was the shock reaction of Dell and the government and the local reaction which started the change which we see today.”

Ms Kelly, now manager of the Bank of Ireland in Limerick, agrees, saying: “Ultimately some real good things came out of it. It’s been transformational. We had the Mid-West Jobs Task Force.

“Without this, we wouldn’t have had the joined-up local authority, the Limerick 2030 Plan and the IDA coming on.”

However, she acknowledged not every element of society has yet recovered, and we must remain aware of that.

“It was very hard to replace those jobs due to the nature of the work. It impacted hotels, it impacted shops, hairdressers, every kind of business you could think of. There were dark days for a number of years,” Ms Kelly added.

Given Limerick’s history of big job losses - think of Wang and Krups for a start - it is unsurprising that there are always fears in the region over staff reductions.

But Mr Brosnan feels Limerick is “immune” from shocks like this for a long time.

"It’s a different Limerick today. The Vistakons, the Northern Trusts, they are all huge employers. But none of them are as big as the giants who fell. I think what’s important in Limerick today is all the start-up companies who may have around 20 employees.

“They may grow to 100 or 200 staff. It’s a very different type of employment today,” he concluded.