Vol. 538 No. 1
54 Mr. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment the total number of jobs lost through relocation to other economies, downsizing of enterprises or other reasons in the past 12 months; the action she has taken or plans to take to avert the continuation of such a trend; and if she will make a statement on the matter. [17299/01]
85 Mr. McDowell asked the Tánaiste and Minister for Enterprise, Trade and Employment the number of redundancies or job losses notified to her Department during 2000 and to date in 2001; if her attention has been drawn to the particular problems of job losses in the technology sector; the measures she intends to take to deal with these losses; and if she will make a statement on the matter. [17226/01]
I propose to take Questions Nos. 54 and 85 together.
A total of 13,316 redundancies were notified to my Department in 2000. A further 7,367 redundancies were notified in the first five months of 2001.
Recent job loss announcements are a reminder to us that, notwithstanding the continuing success of the economy, maintaining our competitiveness remains a key challenge. Jobs in relatively low skill areas are particularly vulnerable in an increasingly global economy. Many of the recent job losses are a result of the restructuring process ongoing in industry in Ireland whereby activities at the lower end of the value added scale are being phased out as these activities become uneconomic in an Irish context. Assisting companies to move up the value chain into higher skilled and more secure jobs remains a priority of current policy being implemented by the State agencies.
The slowdown in the US economy is having a negative impact on the overseas-owned manufacturing sector in Ireland. The impact to date on the economy in terms of GNP growth and unemployment has been quite small, mainly confined to the information technology related sectors. Other sectors such as pharmaceuticals, health care and most internationally traded services are, to date, largely unaffected.
As well as job losses, this impact has manifested itself in a slowdown in both recruitment and planned expansions by some major multinational companies. As regards indigenous Irish companies, the main impact has been a slowdown in expansion plans for exports and an increasing difficulty for indigenous technology firms in gaining access to funding for current and future projects while the US economic climate remains in its current condition.
Where job losses occur, the State agencies work closely together and with local authorities and other local development interests to facilitate an integrated development approach in the matter of attraction of replacement projects, expansion of existing industry and provision of retraining.
It is essential that we continue to focus on the issues over which we have control and which impact significantly on the competitiveness of Ireland as a base for investment. Key issues include the implementation of the national development plan, particularly the roll-out of infrastructure into the regions, wage and price inflation, ensuring a stable industrial relations environment and adequate skills supply.
On the question of the IT sector, on which our job statistics have become increasingly dependent in recent years in terms of a positive sheen, not only in relation to actual job losses but, equally important, the warnings from across the Atlantic about the postponement of future development and also warnings of job losses later this year, what steps has the Minister taken to deal with this matter? For example, has she arranged meetings with the heads of any multinational corporations? Does she intend travelling to the United States to discuss Ireland's position in terms of the global development of these multinational companies with regard to job losses?
It would be wrong to assume that all our eggs are in what is called the electronics basket. We have a fairly good spread between the pharmaceutical industry and the health care-medical devices industry, both of which are still doing well. Biotechnology and internationally traded services are doing well. I have spoken to a number of the companies. The chairman and chief executive officer of Intel in the United States is coming to see me next week. I have spoken to Intel on a number of occasions because it has postponed its expansion at Leixlip. It assures me it will go ahead, but until the position in the United States is more certain, companies such as this have, for the moment, held back on possible expansions.
We have been fortunate because of the strategic nature of most of the operations in Ireland which are, in many cases, stand alone and here to supply the European market. They are far more dependent on the conditions in Europe than on the conditions back home, except to say that if the environment back home is not as favourable as it was, it will affect their future expansion. In relation to their current numbers, generally speaking, job numbers are holding up well.
The questioning and answering have concentrated on the IT and electronics sector, but is it not the case that the rate of attrition is in the more traditional sectors? Does the Minister not agree that 21,000 redundancies since the beginning of last year is a huge rate of attrition? She said the slowdown in the United States has had only an imperceptible impact here. This goes to show the enormous impact there would be if we regard 21,000 job losses as relatively minor. One only has to look at the rate of job losses in the midlands, for example, or County Donegal, and even Peerless Rugs in Athy which lost 60 jobs last week. Is it not the case that the jobs support agencies appear to have taken the position that there is nothing they can do to support the retention of jobs in Ireland in the more traditional sectors and that we have to, as the cliché goes, move up the value chain?
I agree with the Deputy that it is worrying that we are losing so many jobs in what he calls the traditional sector. It is worrying for two reasons. First, if the economy was not in such a healthy state and unemployment so low, with the other sectors doing well, we could have major problems and, second, many of these jobs are in peripheral areas. They tend to be heavily concentrated in the midlands, for example. County Donegal was heavily dependent on the textile industry and, therefore, they have huge local impact. The losses often occur in places where it is not that easy to secure alternative employment.
It would be wrong to say that the agencies are not concentrated on this matter. The whole raison d'être of bringing the trade board and the company development functions of Forbairt together was precisely to help make Irish companies more competitive; using jargon like “up the value chain” does not sound very attractive. Given the wage base in the economy, if we are just involved in basic manufacturing, we are not at the races. We have seen some fantastic examples of where Irish companies have been helped. Michael H in the clothing sector, for example, is one of the most successful companies because it has put what I call a hi-tech strategy into what is a very traditional sector. There are huge possibilities for other companies to do likewise.
Two factories in Carndonagh downsized in the past month. Where stands the textile industry for Inishowen? Are the early warning systems still in place? Will the Minister agree that the fact that the IDA did not sign over ten acres of land to Donegal County Council, which has been sought for the past four years, if not longer, is delaying a project to establish ten development units? I was given an undertaking that it would be signed over on 27 November last year. To my knowledge it has not been signed over. What impact is the IDA having on us when it cannot even sign over land for use by others to create jobs?
Given the interest that the Minister has shown in this area, which I appreciate, will she consider inviting, post-14 June, IBEC, IDA and Enterprise Ireland clients to County Donegal to meet the Donegal County Development Board and public representatives in order that we can start selling this beautiful county, which has so much potential, to them?
Every time I am asked a question such as this, I look behind me and Deputy Keaveney is always there. The Deputy will acknowledge that, for obvious reasons, I have spent more time in County Donegal in the past couple of years than in most other areas. I am not familiar with the details regarding the ten acres but I will look into the matter and refer back to the Deputy.
The textile industry in County Donegal is in difficulty and even some of the traditional companies are examining the possibility of out-sourcing manufacturing because they find it hard to compete with products from lower wage economies. I hope we can keep much of the value-added end of the business in Ireland.
There is some good news on the way for County Donegal. The FDI section has been active in visiting the county which offers significant attractions. If the inward investment pipeline remains as it has been for the past while I hope we will see some positive news for County Donegal and other areas in the near future. I intend to go to the enterprise day in County Donegal. I do not know if I will be able to spend the whole day as suggested by Deputy Keaveney, but I will meet some of the groups she has suggested.
Has the removal of the PAYE-PRSI ceiling had an impact on large American companies? There is great emphasis on large high-tech companies. However, the Minister could provide substantially more funds for county enterprise boards whose main task is to look after small companies in the service sector. There are very committed people on these boards. However, unfortunately only a small amount of funding is allocated to them.
In the context of the Minister's comments on changes in traditional work patterns in different areas, I put it to her that the targets she set for the midlands have failed miserably. This area requires urgent and ongoing attention when one talks about changing patterns. The midlands has not received the kind of investment necessary to ensure improvements in areas which have experienced economic devastation. Will the Minister urgently address this matter?
I thank the Minister for agreeing to meet a deputation from County Offaly in early July. We are preparing our case for the Minister. Has she received a response from the IDA or Enterprise Ireland regarding job opportunities in counties Laois and Offaly? The Minister is aware that the per capita income in County Offaly is now the lowest in the country and there is a serious situation. A number of advance factories, particularly in Birr—
I ask the Deputy to give way to Deputy Rabbitte.
The advance factory in Birr is vacant and we are most anxious about this situation. The Minister is aware of the scale of unemployment and the problems we are experiencing. I ask her to urgently address this issue.
I will take a brief question from Deputy Rabbitte.
It seems we are agreed that the phenomenal rate of job growth in recent times has concealed the rate of attrition in more traditional sectors. Is the Minister satisfied no further actions can be taken by the job support agencies in terms of measures being put in place in advance of these closures which are occurring at a sufficiently frequent rate to be a cause of concern, particularly in the indigenous sector?
I am reluctant to mention counties because Deputy Wall will mention Athy. However, four counties have not done well with regard to FDI recently, namely, Laois, Offaly, Wexford and north Tipperary – south Tipperary has done well. There has been much down-sizing in these areas and we have not been able to find replacement industries.
A number of things are happening. One of the purposes of the national training fund is to help up-skill the existing work force with a view to making people more flexible for alternative employment. There is some capacity to assist companies to put in the technology and develop the strategy to survive, even in difficult circumstances. We have seen some good examples in this regard. Unfortunately it is not successful with all companies, notwithstanding the available assistance.
A major event takes place for the first time tomorrow in the Stillorgan Park Hotel organised by Enterprise Ireland involving Dublin based companies which are examining relocating current expansion plans to locations outside Dublin. I hope some of these regional locations will feature in some of those plans. It is my intention that we can sell the attractions of regional locations such as Athy, Wexford, Laois, Offaly and north Tipperary which have not done so well. Such locations would not ever have been considered.
However, there were two good examples of this recently. In one case, Bank of Ireland decided to locate its new joint venture with Nova in Arklow with the creation of 800 jobs. Other companies have gone to Kilkenny. Many Dublin-based companies are looking at regional locations because of the congestion, difficulty in retaining staff and the cost of houses in Dublin. In addition to FDI, this offers possibilities for some of the towns which have not done so well.
