Michael Dell was in China in October 2008, with his top management team to seek business opportunities in the Chinese market. China is critical to Dell's global supply chain, Dell said, emphasising that the company's procurement in China will total about $70 billion in 2009. At present, Dell has 43% of the global purchase from China and the figure is expected to rise. Meanwhile, Dell's manufacturing resource in China will be transferred from the coastal region to the inland area to ensure its cost competitive advantage.
Jan 2008: Dell open's its second European manufacturing plant at Lodz, Poland: Ribbon cutting (from left to right): Michael Dell (Chairman and, CEO), Jacek Murawski (General Manager, Dell Poland), Jerzy Kropiwnicki (Mayor of Lodz), Mike Cannon (President, Global Operations), Łukasz Wysocki (Gold Award Winner, Manufacturing). Dell has been Ireland's biggest merchandise exporter but there are fears that it will close its Irish plant in Limerick, which opened in 1990.
Almost half of the foreign companies based in Ireland say they would not choose Ireland again if they were to decide now on where to locate their existing businesses, according to a survey commissioned by IDA Ireland. Meanwhile, Singapore-headquartered Flextronics, a supplier to Dell, is to axe 118 jobs in Limerick.
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The Sunday Independent reported yesterday that an IDA survey report, which was obtained by Fine Gael TD Leo Varadkar, under Freedom of Information Act, shows that the majority (61 per cent) of the sample of companies would locate in Eastern Europe instead, while almost a quarter (23 per cent) would go to India.
The mainly US and European companies, which employ tens of thousands of people here, have cited the high cost of doing business in Ireland and poor infrastructure as among their reasons.
IDA Ireland is the State inward investment agency.
The positive news on the report is that the IDA is not going along with ministerial marketing spoof and the denial of serious challenges ahead.
Finfacts Report: Citibank Europe's head says Dublin's International Financial Services Centre faces big potential job losses
Mary Coughlan, Tánaiste and Minister for Enterprise, Trade and Employment last week visited the US to plead for US investment and jobs.
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In addition to the positive points promoted by IDA Ireland, American managers would also be aware of the poor management of the Irish economy in recent years. Besides, even without moves by President Obama and a Democratic Congress on overseas jobs and taxes, there will be a fall in overseas investment by US firms in the coming years.
Greenfield FDI projects in Ireland fell 22% to 114 in 2007, following a decline of 25% in 2006 to 146. Greenfield projects in Romania rose from 116 in 2003 to 366 in 2007 while in the same period, the number of Polish projects rose from 154 to 333.
With the American economy facing a severe downturn, Obama has promised to make it more difficult for US firms to move jobs abroad and he has also advocated changing the tax system that enables Ireland to offer tax haven status for some of the overseas profits of US multinationals.
Foreign-owned firms, mainly American, are responsible for 90% of Ireland's exports.
Finfacts Report: Citibank Europe's head says Dublin's International Financial Services Centre faces big potential job losses
The IDA, with consultants Behaviour & Attitudes, interviewed executives from 97 companies, which represents 18 per cent of the client portfolio of 538 eligible companies.
While Ireland's skills base and low tax policy were seen as positive, the Sunday Independent said that it is possible to establish from the censored report that transport, telecoms and broadband infrastructure are a huge source of discontent.
However, the "high cost environment" in Ireland, particularly wages and utility costs, has also convinced 45 per cent of those surveyed that they would not locate again in Ireland; 49 per cent said they would choose Ireland again and 5 per cent did not know.
Leo Varadkar said: "While the IDA is one of the Government's most effective agencies -- it has brought tens of thousands of jobs to Ireland -- it's clear that they are swimming against a tide of bad policy decisions.
"The key message from the Government at the moment is that we must prepare to take advantage of an upturn. But from this survey it is pretty clear we are not in a position to do that, particularly because of poor infrastructure and high costs."
Flextronics to axe 188 job in Limerick
Up to 118 jobs will be shed before Christmas at the Limerick company Flextronics. Members of the trade union Siptu were informed over the weekend.
Flextronics is a supplier based in the Raheen Industrial Estate to neighbouring computer giant Dell.
Dell is expected to announce the closure or scaling down of its first European plant, where 3,000 are employed.
Another Dell supplier based in Raheen, Banta Global Turnkey, last week announced plans to shed 65 jobs.
Also last week, Dell left 700 temporary workers go.
