Celtic Tiger De-clawed

Tough times on the Emerald Isle: Dell is closing it's largest non-US manufacturing plant. This is not good news.

Established in Ireland in 1990, Dell employed more than 4,500 staff in Ireland at its height and is the country’s biggest exporter and second largest company.

It accounts for approximately 5 per cent of Irish GDP and last year contributed €140m to the south western economy in wages alone.

Who's next?

UPDATE: Should have realised this myself, but as Tim Worstall says, these figures seem very fishy. Not the number of jobs, the other ones. 5% of GDP? Hmmm. Anyway, it still ain't good news and, given how much Ireland has relied upon American inward investment in IT and electronics, this seems likely to be a harbinger of further gloomy news ahead.

Comments

[D.]

Companies like Dell frequently funnel all their Euro P&L through Ireland because of the low rate of corporation tax. Thus, vast sums flow through their Irish operations that are not necessarily generated in Ireland. (I am not 100% sure Dell does this, but it's an entirely legal and common phenomenon).

5% of GDP still sounds a bit high, that sounds more like all of computer manufacturing. I mean, Intel are almost as big.

[ndm]

Tim Worstall now says, in an edited comment, that the journalist admits a mistake in using GDP rather than exports.

Ireland was always going to be subject to this kind of pullout - just as Scotland was twenty years ago. After all, who's in Spango Valley today?

Regarding the vast sums flowing through Ireland I vaguely remember reading a story in the Wall Street Journal a few years ago describing how Microsoft transferred ALL its intellectual property to a closely held Irish corporation as a tax minimization strategy.

[D.]

ndm: yep, you described it more accurately than me - numerous high tech outfits have arrangements like this because of low corporation tax, so their apparent share of GDP is considerably greater than the size of their actual operations in the country.

I remember Ireland with 20% unemployment, and it isn't something I'd like to see return. It seems to be on the way though, that's a shame.

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