Deputy Clune has given notice of her intention to raise the matter of the proposed loss of 160 jobs at Sealand, Cork Airport Business Park. The Deputy has five minutes.
Adjournment Debate. - Plant Closures.
I wish to share my time with Deputy Coveney. Last Wednesday the workers in Sealand, the freight distribution centre in Cork, were told their jobs were to finish in January. This came as a great shock and surprise to them because Sealand, which had set up within the past four months, had been taken over by a Danish company, Maersk. We are told the reason for the proposed closure is that the company preferred to maintain its distribution centre in its own country. The workers had recently taken up employment with Sealand and many of them had left good jobs to do so. These are people, not statistics. There are 160 people involved many with mortgages and other commitments. They did not expect this to happen. I understand from speaking to the IDA that it will go to Denmark to try to get the company to reverse its decision and see if it is possible for it to stay in Cork. This is what the IDA hoped for. I would like the Minister and the Tanáiste to take an active role in trying to persuade Maersk to stay in Cork. It is not good enough to say to these people that they are victims of an international business deal.
Three weeks ago the Oireachtas Joint Committee on Enterprise and Small Business visited this site and were told that it was a jewel in the crown of Cork Airport Business Park and that it was to extend its facility there. Suddenly, out of the blue, three weeks later there is a proposed closure. Will the Minister give a commitment that the Tanáiste will become involved with the IDA in discussions to try to reverse this decision. It can be done if a Government approach is taken. I would like a commitment from the Minister on that.
Mr. Coveney
Last Wednesday evening, 160 people in Cork were asked to accept that they would lose their jobs in the new year, only three months after being employed. Three months ago Sealand shipping group officially opened a centralised management centre in the new Cork Airport Business Park. The location seemed ideal, the skilled workforce suitable. The company was expected to employ up to 300 people in the next three years. We are told the reason for the closure is a takeover by a Danish company, to which Deputy Clune referred, that does not seem to have a policy of centralised management within Europe.
There are questions I would like answered. For how long has the IDA been aware of the takeover of Sealand by Maersk? Did the IDA meet Maersk management at the earliest opportunity to find out its future plans for the Cork offices? If not, why not? Has the IDA met Maersk management since the announcement? Has it had any success in reversing this decision? If the Sealand jobs are gone, and being realistic they probably are, what is perhaps most worrying is that these jobs were ideally suited for Cork and Ireland, requiring the technology, skilled workforce and quality of infrastructure that makes Cork so competitive as an investment location for employers. In short, these are the types of jobs that we should attract because they are secure and sustainable.
Is the Tanáiste taking an active role in trying to replace these 300 jobs? May Deputy Clune and I take home some good news to the 160 workers who may face unemployment in January?
I thank the Deputy for raising this matter. My colleague, Deputy Flynn, raised the matter last week. I share fully the Deputies' concern and disappointment over the announcement that Sealand has decided to close its operation at Cork. I am conscious of the effect this will have on Cork and, most immediately, on the employees concerned. I hope I can answer the questions raised by Deputy Coveney, at least in a broader sense, to try to give him the sequence of events.
In June, 1998 the Government approved grant aid to the company which would have resulted in the eventual creation of up to 300 jobs within three years, with additional jobs later. Securing this project for Cork was a significant achievement by IDA Ireland.
At that time, Sealand Service Inc., based in Charlotte, North Carolina, was the largest US flag container ship operator and one of the three top international container shipping companies in the world. Its fleet of 99 ships serves 120 ports in 80 countries, employing 9,105 people. Sealand was wholly owned by CSX Corporation, a US public company in transportation employing 46,900 staff, with sales of $10.62 billion.
Prior to its decision to locate this facility in Cork, the company operated its customer service and documentation handling at local office level in 13 European countries. Sealand decided to rationalise its administrative and customer service functions and centralise them in a new shared services centre in Cork. This new operation was intended to have responsibility for customer service, finance, procurement, claims documentation and information technology and could have led to the future establishment of a new tele-sales function. At full operation the centre would have involved the use of a total of 12 different languages.
Since 1996, Sealand has had an operating alliance with Maersk Lines, the Danish carrier, as Deputy Clune pointed out, sharing vessels and equipment and enabling it to provide a global network with greater scope and operating frequency at reduced costs.
The company commenced operation in the Cork Airport Business Park and currently employs a total of 168 staff. However, Sealand was taken over by its alliance partner, Maersk, in August last. That company operates on the basis of local offices in each country rather than on the basis of a centralised shared services operation which was favoured by Sealand. In addition, different computer systems are used by the two companies and the Maersk system will now be adopted. Accordingly, the new owners have decided to close the Cork operation with effect from January next.
The IDA is meeting the new owners in an effort to retain some business activity in Cork and I hope there will be a positive outcome to these discussions. I would emphasise that the closure does not reflect on the workforce nor on the contribution they were making to the company. It is an unfortunate result of a different business strategy being adopted by the new owners.
Notwithstanding this serious blow, there has been a significant upturn in the employment position in Cork in recent times. The Government has been able to announce very significant new employment projects in recent years and especially this year. In May last, the Tanáiste announced that the American Bankers Insurance Group was setting up a data processing and claims operation in the city which will provide 300 jobs. In July last she announced a 350 job project at SMT which is engaged in electronic contract manufacturing; 100 software jobs in the Pilz company and 50 new software jobs in Datastream Systems Inc. In the same month she opened the Stryker premises in Carrigtwohill. That company will generate a total of 290 new jobs there. Last month, the Tanáiste also announced a 250 job software project at CMG Telecommunications. Other investment projects which were secured this year include Infor Business Solutions, IMTF, Nycomed and Siemens. These latter projects will generate a total of 375 additional jobs.
The Tanáiste has asked FÁS to ensure that everything possible will be done to enhance the employees' prospects for re-employment. Given the continued improvement of the economy as a whole, the promising trends in Cork in particular and the ongoing efforts of the State agencies, I hope the Sealand workers will be able to obtain alternative employment with the minimum of disruption.