Dell wins EU OK to get euro54.5 million Polish aid

Sep 23, 2009

(AP) -- Dell Inc. won EU approval Wednesday to receive a euro54.4 million ($80.4 million) subsidy from the Polish government to build a new plant there, replacing Ireland as the computer maker's new European manufacturing hub.

The said it could allow the government aid the company because the new factory would create jobs in a disadvantaged part of Poland - Lodz, the country's third-largest city - where there is an unusually low standard of living and high unemployment.

The state will pay just over a quarter of the total investment of euro189.58 million in the plant which will eventually employ up to 3,000 people to make desktops, notebooks and servers, including Latitude and Inspiron models.

Open since January 2008, the factory currently employs 1,700.

EU regulators said they investigated the subsidy carefully because they initially doubted that the plant needed state help and wanted to check that it didn't enrich or help it make more of a product that wasn't selling.

When Dell announced plans to build the plant in Poland, it was hailed as a landmark project for bringing high-skilled work to the country where hundreds of thousands of young, educated people were leaving for higher-paid jobs in other parts of the EU.

Round Rock, Texas-based Dell said it had picked Poland as a manufacturing center because it was close to a large, growing customer base in central and eastern Europe where it expected sales to increase by nearly 14 percent a year.

It also helps the company cut manufacturing costs, as profits decline and it loses its status as the world's No. 1 PC maker to rival Hewlett-Packard Co.

Dell said earlier this year that it would shift its European manufacturing center from Limerick, Ireland to lower-wage Poland with the loss of some 2,000 Irish jobs and another 840 in local supplier companies.

Dell was Ireland's second-largest corporate employer, its biggest exporter and in recent years has contributed about 5 percent to the national gross domestic product. Economists warn that each Dell job underpins another four to five jobs in Ireland.

Some 1,000 Irish workers will remain in Limerick to coordinate manufacturing throughout Europe and research and develop new products. Dell also employs another 1,300 people in a Dublin-based marketing and sales center for Europe.

©2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Explore further: IBM to pay $1.5B to shed its chip division

add to favorites email to friend print save as pdf

Related Stories

Dell: PC demand stable stabilizing

Jul 13, 2009

(AP) -- PC maker Dell Inc. said Monday it expects its fiscal second-quarter revenue to be slightly higher than in the first quarter, when sales plunged 23 percent to $12.3 billion.

Recommended for you

New iPhones deliver big profits for Apple

56 minutes ago

The new big-screen iPhones helped propel Apple's profit and revenue in the past quarter, as the California tech giant delivered stronger-than-expected results.

Facebook sues law firms, claims fraud

1 hour ago

Facebook is suing several law firms that represented a man who claimed he owned half of the social network and was entitled to billions of dollars from the company and its CEO Mark Zuckerberg.

IBM 3Q disappoints as it sheds 'empty calories'

2 hours ago

IBM disappointed investors Monday, reporting weak revenue growth again and a big charge to shed its costly chipmaking division as the tech giant tries to steer its business toward cloud computing and social-mobile ...

MasterCard, Zwipe announce fingerprint-sensor card

Oct 18, 2014

On Friday, MasterCard and Oslo, Norway-based Zwipe announced the launch of a contactless payment card featuring an integrated fingerprint sensor. Say goodbye to PINs. This card, they said, is the world's ...

User comments : 0