Dáil Éireann debate -
Thursday, 7 Oct 1999

Vol. 508 No. 5

Adjournment Debate. - Plant Closures.

Mr. McGrath

I thank you, Sir, for allowing me to raise this important issue on the Adjournment. I must declare a personal interest in this matter since not only do I know many of the employees at Oxford Health Plans in Mullingar but my daughter is also an employee. The shock announcement of the closure of this plant came as a major surprise to the people of Mullingar and the surrounding areas. For the 125 workers at the plant the announcement, and the manner of the announcement, was something nobody could have envisaged.

This plant operated efficiently and effectively and was held as a model of productivity within the Oxford Health Plans Company. For some employees the first inkling of a problem at the plant was when access codes to their computers failed this morning. For others the news was relayed to them by way of a news bulletin on RTE, which was unacceptable treatment of the workforce and is to be regretted. The employees deserve much better treatment.

Oxford Health Plans first opened its doors in Mullingar on 19 January 1998. It started with 40 staff and the number increased to approximately 180 this time last year. The company had received a very high profile from the IDA. The Tánaiste and Minister for Enterprise, Trade and Employment and the Minister for Public Enterprise attended the announcement of its entry to Mullingar in October 1997. The IDA generously grant aided it to set up in Mullingar and I now call on it to review this investment and establish whether refunds are payable.

The company attracted high profile and high quality employees. Many left positions in other companies in the expectation that the company could provide them with a quality and permanency of employment that would last for years to come. Some even returned from abroad to work at the plant. For many employees this was the only source of income for their families and they were totally dependent on it. Many ancillary jobs providing supplies to the plant will also be lost.

I understand the heartbreak and disappointment of the employees who find their jobs gone today. It is especially sad that the closure should occur within a few weeks of Christmas and the new millennium. It is important to note that these jobs are gone through no fault of the employees, but rather they result from a management decision taken thousands of miles away in America. I call on the Government and the Tánaiste and Minister for Enterprise, Trade and Employ ment to take all necessary steps to find a replacement. The premises is magnificently fitted out and is ideal for a similar type company or a call centre. I assure the Tánaiste that there is a well trained, skilful and responsible staff available to work for any new company wishing to establish in Mullingar.

Mullingar and the midlands have had their share of job losses in the recent past with the closure of Tarkett less than 12 months ago and other closures in County Longford. Indeed, Mullingar lies within the Objective One area. I am confident the IDA should have no difficulty marketing this location and I will be very disappointed if a new company is not found for this premises before Christmas. I also ask the Tánaiste to favourably consider Mullingar for decentralisation. Some headquarters should be located there in the not too distant future.

Mr. Penrose

I am grateful for the opportunity to raise in the House this evening the shock announcement by Oxford Health Plans to immediately close its claims processing facility in Mullingar, which was only opened in January 1998. It dealt substantially with medicare claims processing. Coming so soon after the recent announcement of a company closure in Longford, with the loss of 112 jobs, it is a bleak few weeks for the north midlands. When one thinks of black Friday, 23 October 1998, when Tarkett announced the closure of its factory in Mullingar, with the consequent loss of 141 jobs and numerous indirect jobs, the month of October has been cruel to the economy of Mullingar and the north midlands.

The Oxford Health Plans closure is of seismic proportions and the fact that workers, including Deputy McGrath's daughter, who gave loyal service to the company over a 21 month period, only found out they were being thrown on the dole queue on the radio news this morning compounds their deep sense of hurt and betrayal. Surely in this day and age employees deserve to be treated better.

On the news pictures today we saw the Tánaiste and Minster for Enterprise, Trade and Employment and the Minister for Public Enterprise touring the factory only two years ago – I am glad the Minister for Public Enterprise is here this evening. It represents a poignant reminder of how suddenly investment has turned sour for the workers through no fault of their own. The question must be asked how and why could such a project, which we all greeted as important for Mullingar, be the source of such great heartache and disappointment in such a short time?

When we think of the 125 employees we must reflect on the human dimensions. Many workers are supporting families, paying mortgages and making huge sacrifices to provide their children with a third level education. Other workers were looking forward to securing and establishing their first homes to rear their families. Many other workers were young people who found their first job there and thought that, unlike countless young people from County Westmeath, they would have the opportunity to work and live in their own county without resorting to emigration. These people's lives and ambitions have been shattered by this sudden and unanticipated announcement.

Some of the workers to whom I spoke this morning had no inkling that their jobs would disappear so quickly. I trust the Tánaiste and Minster for Enterprise, Trade and Employment will ensure that the company will meet all its contractual obligations and financial liabilities and that all the employees will receive appropriate and generous redundancy payments and other compensation to help them over the next few months to discharge their commitments while they set about securing alternative employment.

The operation employed people from Mullingar and the surrounding areas. The closure represents a significant blow to the industrial base of the Mullingar area and necessitates immediate attention from the Tánaiste, the IDA, FÁS and other agencies. Securing a new investment for the plant is essential. Mullingar is an excellent location on the Dublin corridor with a well developed infrastructure, boasting a highly skilled and educated workforce with a proven track record.

I understand the IDA is speaking to a number of companies and hopes to secure alternative employment. I hope the discussions, which are at an advanced stage, will come to fruition and that the Tánaiste will ensure that every effort is made over the coming weeks to finalise a deal for a new investment for Mullingar.

An inter-agency group was established to formulate a response to the closure of the Tarkett plant in Mullingar. That group should be immediately re-established to examine and respond to the needs of the employees of Oxford Health Plans and to examine ways to promote priority action and job creation in Mullingar. The group should meet immediately and set about securing alternative job creating enterprise, both from overseas and indigenous investors.

I appeal to the Government to give due recognition and support to indigenous industries who want to set up locally and to actively promote Mullingar as a location for a new investment. I also request the relevant agencies to provide immediate skills assessment and suitable retraining opportunities for those workers who have lost their jobs today and for the hundreds of other people in Mullingar who are struggling to make ends meet on the dole.

We need to secure industries which will be long term in nature. I again appeal to the Government to consider favourably the case made by Mullingar as an ideal place to decentralise a Department or semi-State agency when deciding its new decentralisation plan. I understand it is currently being examined by the Minster of State at the Department of Finance, Deputy Cullen. Despite its central strategic location, Mullingar has been by-passed when previous decentralisation proposals were considered.

This is the second time in 12 months we as Oireachtas representatives had to raise the matter of a major factory closure in Mullingar. Given the severe damage such closure can inflict on a local economy it is essential that every effort is made by the Tánaiste, the IDA and the other agencies working together to boost the local economy and provide jobs for the skilled and dedicated workforce in this area.

An Ceann Comhairle

I call the Minister for Public Enterprise. The Minister has two minutes, which is being provided from the time allocated to the two Deputies who raised this matter. A Minister replying to an Adjournment matter cannot share time.

Minister for Public Enterprise (Mrs. O'Rourke)

I thank Deputies McGrath and Penrose for sharing their time with me. I also thank my colleague, the Minister for Social, Community and Family Affairs for attending the House to answer this matter. I am glad of the opportunity to inform the House that the three elected Deputies for the constituency of Westmeath are making a combined effort to address this matter. We are not proceeding in a divisive manner but with the aim of getting a replacement industry.

The shock felt by the employees of Oxford Health Plans must be huge.

I came home from Luxembourg last night and there was a message from the Tánaiste asking me to telephone her. When I did, she told me the news. She had learned it yesterday.

No matter how eminent a firm is or how well it has treated its employees – I understand this company treated them well in the 21 months it was there – it is incorrect to treat employees in such a fashion that they learn from the radio and television that they no longer have a job. Deputy McGrath informs me that when the employees went to work their computers were logged off, which confirmed that they had no jobs. This approach would never have been right at any time but in this day and age it is despicable.

I understand this has happened due to uncertainty in the American market about Oxford Health Plans. That, as somebody said, is far away from here but it is not far away when it has implications for one's job, salary, mortgage, children and other commitments. These are domestic matters which are not at all far away. The Tánaiste spoke to me again this morning and I will be meeting with her again. I told her that the Deputies for the area, who are present for this debate, want a replacement plant or firm as quickly as possible. I believe it can be done but I hope it is done quickly.

I also urge that certain standards should be applied to firms which receive funding from the IDA or Enterprise Ireland – indeed, this could apply to any firm – whereby they are obliged to maintain standards when they, unfortunately, encounter rocky times. Those standards include a decent timeframe for informing employees about such developments. I urge that a replacement company is found as quickly as possible for this fine facility in Mullingar.

Minister for Social, Community and Family Affairs (Mr. D. Ahern)

I thank the Deputies for raising this matter on the Adjournment. I also thank the Minister for Public Enterprise, Deputy O'Rourke, for her views. I share the Deputies' concern and disappointment over the recent decision by Oxford Health Plans to discontinue operations in Mullingar with the loss of 135 jobs. I am conscious of the effect this will have on Mullingar and, most immediately, on the employees concerned.

If memory serves, Oxford Health Plans considered my constituency as a possible location for its operations. When it opted for Mullingar, people in Louth were disappointed. However, that disappointment is tempered by recent developments. I empathise with the Deputies and with the people of Mullingar. I know what it is like to lose an industry in this manner. People are informed at the last minute and everybody else appears to know other than those most affected. The same thing happened a number of years ago when I was on the Opposition benches. To be fair to all concerned, there is no easy way to announce a decision such as this and, obviously, these decisions are not taken lightly.

Oxford Health Plans is a US public company which employs approximately 6,000 people, primarily in north eastern USA, in the provision of managed health care. In October 1997, the Government approved a proposal by Oxford Health Plans to establish a claims processing operation in Mullingar. It was targeted to employ 500 people by the year 2000. Employment peaked at 187 in late 1998 and the operation currently employs 135 people.

At the time of the Government approval, Oxford Health Plans was the fastest growing company in the managed health care industry in the US and was ranked fifth in the Fortune 100 list of fastest growing companies. It was financially strong with consistent profit performance above the industry norm. Its employment targets for the Mullingar operation were considered conservative relative to its projected growth.

However, Oxford Health Plans has been experiencing difficulties for some time now. It has been losing market share and, as a result, has been downsizing. Over 500 jobs have been lost in its US operations in recent months. IDA Ireland was aware of these developments and has been monitoring the situation closely. It has been in regular contact with the company, including the parent company, in an effort to persuade it to maintain the Irish operation. On the recommendation of the IDA, the Tánaiste also made representations in this regard. Despite these interventions the company has decided to close the Mullingar operation with immediate effect as it now has an overcapacity for claims processing.

The Tánaiste met with the company yesterday. It explained that this decision was necessary as part of its need to continue its internal restructuring to recover its business and cope with the ongoing decline and loss making it has been experiencing in recent times. The company assured the Tánaiste that it will give every support to the workforce to find alternative employment and has offered an exit pay package to them to allow time to seek new employment.

Oxford Health Plans has also committed to meeting all its liabilities to IDA Ireland and will give every support and assistance in finding alternative business for the facility in Mullingar. IDA Ireland is actively working with potential investors to acquire the Mullingar facility for a new international services operation. I am optimistic that these talks will conclude successfully in the coming weeks.

Indeed, IDA Ireland has been most successful in recent times in attracting inward investment to Mullingar. The Tánaiste announced, on 18 May 1999, that IDA Ireland had successfully reached agreements with the Taiwanese public company, Hon Hai Precision Industry Company Limited of Taipei, to establish two industrial projects in Mullingar which together involve investment of more than £8 million and will lead to 500 new jobs over the next four years. In one of these projects, the new company Foxteq Engineering (Ireland) Ltd, will invest nearly £4.5 million in establishing a facility to manufacture enclosures for some of the leading personal computer manufacturers, mainly Dell and Apple. The company expects to create 350 jobs within the next four years.

The second project, Foxconn Ireland Ltd., will employ 150 people over the next three years. It will involve £3.5 million investment in facilities to establish the company's first European design and low volume production centre for specialised electronic components, including cable assemblies and connectors. Over one fifth of the employees in this project will be third level graduates with particular technician skills in IT design.

Enterprise Ireland is also active in the region. In November 1998, the Tánaiste announced an expansion by Genesis Fine Arts which produces a wide range of cold cast bronze figurines for sale to both domestic and export giftware markets. The new expansion will create an additional 32 jobs, bringing total numbers employed in the company to 74 within a four year period.

Everything possible will be done by FÁS to enhance the Oxford Health Plans workers' prospects for re-employment. Given the continued improvement of the economy, the ongoing efforts of the State agencies and the commitment by the company to give every support, I am confident that the workers will not have too much difficulty in finding alternative employment.

I wish to apologise for the non-attendance of the Tánaiste at this debate. She asked me to speak on her behalf.