Probe into €50m sweetener behind Dell move

Top European officials are to investigate a €50m aid package the Polish Government used to attract computer giant Dell away from Ireland, it was confirmed tonight.

The sweetener was agreed with senior executives at the US multinational as it looked to shift 1,900 jobs from its Irish manufacturing wing and open a new plant with a cheaper workforce in Lodz.

The European Commission said an in-depth investigation into how the deal was struck would be complete within six months.

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.

Dell intends to set up a new manufacturing plant in Lodz turning out PC desktops, notebooks and servers creating up to 3,000 jobs, making it eligible for regional aid as an area with an abnormally low standard of living and high unemployment.

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.

Local representatives in Limerick launched a withering attack on Dell chiefs and the Government as workers were eventually told manufacturing would cease almost two years after the cuts were first mooted.

Even though the computer firm insisted the 1,900 job cuts were only agreed this week, civic and business leaders claimed more could have been done to limit the impact.

Michael Noonan, local Fine Gael TD, called Dell’s pullout a debacle, claiming ministers knew three months ago the company would cease manufacturing.

“I believe the Government has handled the Dell situation very badly,” Mr Noonan said.

“It knew for at least a year that many Dell jobs were at risk, and knew for at least three months that all manufacturing at Dell, together with 1,900 jobs, was being transferred to Poland. But the Government sat on its hands and has done nothing effective.”

Maria Kelly, Limerick Chamber of Commerce chief executive, said: “We’ve been saying in the Chamber for quite a while that we were vulnerable.

“We have over-reliance on industry that is vulnerable and has a relatively high costs. We can’t expect to indefinitely keep manufacturing and the focus has to be on transferring to high end jobs.

“Certainly it would have been great if that scope had been on the 750 jobs over the last two years.”

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