I propose to take Questions Nos. 12 and 32 together.
Both Pratt and Whitney and Lufthansa have had to undertake a global review of their operations. In Pratt and Whitney’s case, a decision was taken by the parent company to transfer dwindling customer requirements to a site in the US. This has resulted in the phasing out of older technologies and products. However, the company still has excess capacity across its engineering/maintenance/repair operations. Indeed 4 other such sites had already been closed by the company. This is the key determinant in their decision to initiate a process which is likely to cease production at the Rathcoole plant and to introduce a redundancy programme there, on a phased basis, over the next eighteen months. 107 jobs will be impacted by the programme.
IDA have engaged regularly with the company over recent years in order to assist them address the challenges they faced in a very fast-changing and competitive marketplace. This involved advice and support towards addressing issues that arose for the company from time to time. IDA arranged that the company became involved in a wider grouping of International Engineering companies, based in Ireland, which IDA established, in order to benefit from shared experiences and facilitate capacity building. In addition IDA met with senior management for Pratt and Whitney in the USA in October 2013 and, also, they have held ongoing engagement with the wider parent group, United Technologies, in the USA .
In the case of Lufthansa, the decision to enter into a consultation process with the workers was taken following an extensive review of operations, in the context of declining revenues and shrinking international market opportunities. The company has pointed out that enhanced quality and efficiencies of the new generations of aircraft engines – with reduced need for overhaul – has impacted on their business with fewer engines becoming available for service. There are also complex changes in the dynamics of aircraft maintenance, including engine refurbishment, worldwide, which have knock-on impacts in facilities such as those in Ireland. As you will appreciate, the ultimate decision in these cases is made by the parent company, on strictly commercial grounds, and on what is seen by the company as being in the best interests of the group as a whole.
I have met senior executives of the company on three occasions since taking office and IDA has been engaged with them very frequently over recent years in an effort to find solutions to the difficult business environment they face. The IDA arranged the intervention of the State’s Industrial Relations service at a time of Industrial Relations difficulties and considerable progress was achieved on that issue at the time. IDA also approved a training grant to train the production workers on a new engine type which enabled the company to take on new business. As various other issues arose there was regular contact between the IDA and company management to provide advice and information. However the current challenges are very significant.
IDA Ireland has met with company management in both cases with a view to creating a profile of the Rathcoole plants, and of the workforces and their skills, for marketing purposes by IDA’s global team. IDA will remain in on-going contact with the companies during the next 12-18 months. In addition, I have arranged that Enterprise Ireland will engage with the company to explore whatever other options might be possible, taking into account that Agency’s remit and experience in supporting the Irish-owned engineering sector.
I am conscious of the highly-skilled workforces at both companies and have asked IDA to explore the possibility of securing a takeover or buy-out for either company. I want to assure the House that all that can be done by the State’s agencies in an effort to secure a positive result for the employees at both companies is being done and will continue to be done, including any appropriate upskilling of the employees affected.