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Dáil Éireann debate -
Tuesday, 19 Feb 2002

Vol. 548 No. 5

Adjournment Debate. - Company Closures.

It looks as if the bad old days of company closures are back with a bang. I have read of many such closures around the country over the past six or 12 months and felt that the Celtic tiger was faltering in its gallop. Now that the bad results have hit close to home in Bandon, I realise that the Celtic tiger has become lame and has run out of steam. It is really only when a closure of that order hits close to home that one fully appreciates its devastating consequences.

The closure of the Alcatel Software Centre in Bandon is a bad blow for the country because it was a unique software centre. It is a major disaster for the Bandon area. A total of 75 jobs have been lost. These are not ordinary jobs, but highly-skilled jobs in software engineering. This is a huge blow to the local economy in Bandon. On the day these jobs were lost, 15 more were lost in Shannon, and it was announced that 200 Esat workers would be laid off around the country. My particular concern is for my own area, Bandon. What we are losing there is a skilled workforce of software engineers. I do not want to see that skilled workforce scattered.

There are two possibilities. The first is the introduction of a project to absorb that highly-skilled workforce. I have already spoken to the IDA about that. I have also spoken to the management of the company. In fairness to the company, it indicated in its statement that it would assist employees affected by the closure of the software centre in whatever manner possible in sourcing alternative employment. In my further discussions with the management, they made it clear that from the point of view of the factory space, and obviously not taking on board direct competition, they would be very happy to provide that factory space for an alternative enterprise which would absorb that skilled workforce. We have the factory space, the skilled workforce, and the good will of the company. I want the Government and its agencies to ensure if at all possible that the window of opportunity in that regard will be used.

The other possibility is that the group itself might develop a project. I understand that discussions are under way between some of the members of that skilled and highly-trained workforce. If such a project should emerge from within the group, I want to ensure, whether through Forfás or any other State agency, that the maximum support is given to bringing such a project to fruition in Bandon.

I accept that there are problems worldwide in the telecommunications sector. We can only look at our own situation and the difficulties that arise where they are of our own making or where the solution is in our hands. In a general sense the deregulation process in Ireland is not working fully and properly. There has been no new investment in the domestic telecommunications industry in recent times. We are far behind the rest of the world in some aspects. There has been no deployment of the DSL, that is the digital subscriber line, other than trials. I call on this Government, for whatever time is left to it, to take the industry by the scruff of the neck in that general sense and try to stimulate a new approach. Otherwise the bad news of Bandon will be replicated nationwide.

My particular concern tonight is the project in Bandon. I have mentioned two possibilities for the use of that skilled workforce. I want that workforce marketed. I want the factory space and the skilled workforce to be presented internationally so that we can, if possible, attract international mobile investment. Alternatively, will the Government support the development of a project by the workforce? There is a window of opportunity. The workforce will not be laid off except on a phased basis between May and September. Let us use that window of opportunity.

I thank the Deputy for raising this matter on the Adjournment. I fully share the Deputy's concern and disappointment over the recent decision by Alcatel to close its Software Development Centre in Bandon.

Alcatel established its original operations in Ireland to supply digital exchange equipment to Eircom. The Bandon operation was subsequently established in 1982 to manufacture and install switching equipment. By 1985, with IDA grant assistance, Alcatel established its Software Development Centre. The company reached its target of 25 employees and, in 1987, an expansion was agreed to bring employment up to 56 people. The centre continued to expand and, having peaked at 86 people, it employed 75 software developers in January 2001.

Working exclusively for its parent company in France, Alcatel Bandon's work concentrated on developing home location register technology, a software roaming tool. Due to restructuring within Alcatel, this work will now be moved to France. Staff were informed of the decision on Friday last, 15 February 2002. Redundancies will take effect on a phased basis from May 2002 and are due to be completed by September 2002.

Alcatel's network hardware installation business will be unaffected. While no manufacturing is now carried out in Ireland, 85 people are employed covering installation of equipment for fixed line and wireless networks for customers that include Eircom, Vodafone, Esat-BT and Chorus. Forty-eight of the staff are located in Bandon while the remaining are based at Citywest in Dublin or involved in installation around Ireland.

The employees affected by the closure announcement comprise a significant pool of experienced software personnel and IDA Ireland will now work to find a suitable outlet for this expertise. In addition, FÁS was in contact with the company yesterday to advise on the full range of support services it could offer employees including skills analysis, jobs placement, guidance and counselling interviews, identification of training needs and suitable training courses.

Enterprise Ireland has also been in contact with the management of Alcatel to arrange a presentation to selected staff on the range of supports available to those wishing to start their own business. A meeting with Alcatel management will take place on 22 February 2002 to agree the timing and content of this presentation.

Enterprise Ireland continues to promote the National Software Centre in Mahon, Cork city, and in particular the associated incubator space, as a location for start-up companies in the information and communication technologies (ICT) sector. This may particularly suit Alcatel employees, given their ICT skills.

The fifth south west region graduate enterprise programme, a high-support scheme for graduates wishing to start their own business funded by the Department of Education and Science, has begun. Enterprise Ireland will provide feasibility study support for any suitable Alcatel employee who wishes to join this programme, even at this late stage.

Enterprise Ireland continues to work with the west Cork technology task force to promote the West Cork Business and Technology Park, Clonakilty as part of their "Into the Regions" strategy. It should be noted that this park will have full high-speed broadband access by the end of April next. Over the past four years there has been an unprecedented growth in employment in IDA Ireland assisted overseas companies in both Cork city and county.

Permanent employment grew from 13,857 people in 1998 to 18,461 people in 2001. This represents an increase in employment of 4,604 people – a growth in employment of over 33%. This growth was achieved by concentrating on three main sectors as follows: chemicals, pharmaceuticals and health care; information and communication technologies; and international traded services. It should be noted that not all of these new jobs were provided by new inward investment. A strong performance by overseas industries already established in Cork contributed 2,892, almost 63%, of these jobs. This indicates a high satisfaction ratio with the economy and the Cork area in particular as a base for investment and a magnet for the attraction of further investment in the future.

Critical to the growth of these sectors is the provision of qualified and highly skilled people. The educational institutions in Cork have responded well to these demands and their contribution to industrial and commercial success is highly regarded and acknowledged. Investment in Cork is supported through the co-operation of a large number of public and private organisations – local authorities, semi-State bodies, utility providers, telecommunications providers, shipping, transport, airport, trades unions, professional services etc. – all of which are available to smooth the path for new and existing investors. This spirit of co-operation and assistance in Cork is key to IDA Ireland's efforts to attract overseas investment to the area. During the lifetime of this Government, the number of people employed in software in Ireland and the gross value of the industry have doubled and we lead the world, ahead of the United States, in software products and services. We are proud of that and know that the workers in Alcatel in Bandon are highly skilled people. I will reinforce with State agencies the importance of giving every possible support to these people to ensure we can create alternative opportunities for them, either in a new project or in individual opportunities for them as skilled people.

The Industrial Development Agency will continue to market County Cork for investment and will do its utmost to assist those workers losing their jobs to find alternative employment as soon as possible.

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