Today, Dell announced the transfer of ownership of the Polish Dell factory in Lodz to one of the world’s biggest electronics producers, Foxconn. Dell expects the European Commission to approve the transfer in the coming weeks and hopes that the transaction will close before the new year. About 3,000 people are employed at the Dell factory in Lodz. “From their point of view, nothing will change,” assures Dell spokesperson, adding that Dell will simply become Foxconn’s client and purchase electronics produced in the factory. Reportedly, however, some 1,600 Dell employees will be transferred to Foxconn. The situation of the other 1,400 workers, contract agency workers most likely, is not yet clear.
Today, Dell announced the transfer of ownership of the Polish Dell factory in Lodz to one of the world’s biggest electronics producers, the Taiwanese giant Foxconn. Dell expects the European Commission to approve the transfer in the coming weeks and hopes that the transaction will close before the new year. About 3,000 people are employed at the Dell factory in Lodz. “From their point of view, nothing will change,” assures Rafal Branowski, Dell spokesperson, adding that Dell will simply become Foxconn’s client and purchase electronics produced in the factory. According to the Wall Street Journal, however, some 1,600 Dell employees will be transferred to Foxconn. The situation of the other 1,400 workers, contract agency workers most likely, is not yet clear.
Again according to the Wall Street Journal, the deal is the latest example of how Dell has abandoned its once industry-leading strategy of building PCs to order in its own factories. While that structure helped Dell become the world's largest PC maker by volume at one time, the company has struggled in recent years. Since 2006, Dell has been outpaced by rivals Hewlett-Packard Co. and Acer Inc., whose outsourced manufacturing operations have become cheaper and more efficient than Dell's. In addition to getting rid of the Poland plant, Dell this year has closed its factories in Ireland and North Carolina. Last year it closed a plant in Texas. A Dell spokesman said the company still has factories in Texas, Brazil, China, India and Malaysia.
In January 2009, Dell terminated the jobs of 1,900 workers at its Raheen Industrial estate plant in Limerick, Ireland, and moved production to Lodz. This transfer was expected to seriously affect an estimated other 10,000 Irish jobs in sub-supply companies reliant on Dells business. Dell's move, cutting 1,900 of 3,000 jobs at its Limerick plant, aimed to benefit from lower costs in Poland where the minimum wage is one-fifth of Ireland. At the time, Limerick's mayor John Gilligan spoke bitter words in the local press about the loss of employment for Limerick: 'Dell will probably head for Ukraine in six to eight years' time.'
In the months preceding the Limerick dismissals, the Polish government received a reported €52.7million European aid package – which appears to have been given to Dell's Polish unit, or in other words, used to charm Dell away from Limerick. European officials announced to investigate if the subsidy has been used according to the strict European competition policy, according to some analysis in the press.
Dell also raised controversy when it closed its factory in North Carolina, as the factory had received state tax breaks, writes the Wall Street Journal.
In June 2009, a trade union was established at the Dell factory in Lodz, Poland. The union got together to protest the Dell-imposed new working regime – from five to six working days a week. Workers complained that the work on Saturday is not paid the required overtime rate, but merely the normal week day rate. Other issues raised by the workers concerned the precarious position of contract workers, the increased production targets, the high costs of the Dell-offered kindergarten services, and the fact that the extra-mural students have to take unpaid leave to attend their bi-monthly classes, as reported by Karat Coalition, a Polish NGO. 70% of the Lodz-plant workers are women, among whom many have young children. To justify the higher production targets Dell stated that assembling had become more easy, which workers disputed. Contract workers were offered three-week contracts, and were not entitled to bonuses or vouchers.
Then, in August, Dell dismissed 400 contract agency workers, out of a total of 1’900 workers, as a measure to address decreasing orders. This measure fuelled the anger and concerns of the Lodz-workers. It was even rumoured that Dell was to terminate the rent of the factory by the end of the year. The Lodz plant workers feared Dell was contemplating the sell-out of the factory and intended reducing the number of employees to avoid having to pay severance pay.
And guess what, now the Dell plant is sold to Foxconn.
