Léim ar aghaidh chuig an bpríomhábhar

Dáil Éireann díospóireacht -
Tuesday, 18 May 1993

Vol. 430 No. 8

Ceisteanna—Questions. Oral Answers. - Electronic Sector Job Losses.

Richard Bruton


10 Mr. R. Bruton asked the Minister for Enterprise and Employment if he has sought an assessment of the vulnerability of existing Irish jobs in the electronics sector in view of the loss of almost 1,000 jobs in this sector already in 1993, and if he will make a statement on the matter.

Martin Cullen


12 Mr. Cullen asked the Minister for Enterprise and Employment if, in view of the loss of 150 jobs at the Amdahl computer plant in Swords, County Dublin, he has intervened to seek to prevent these job losses; if, in view of the fact that these job losses have come so soon after the withdrawal of Digital manufacturing operations from Ireland and of the crucial dependence of this country on the electronics industry for employment, he has had any overall assessment carried out of the likely developments within this sector with a view to safeguarding the optimum number of jobs; and if he will make a statement on the matter.

Mary Flaherty


91 Miss Flaherty asked the Minister for Enterprise and Employment if he has sought an assessment of the vulnerability of existing Irish jobs in the electronics sector in view of the loss of almost 1000 jobs in this sector already in 1993; and if he will make a statement on the matter.

I propose to take Questions Nos. 10, 12 and 91 together.

I met Amdahl Corporation on 16 March during the course of my recent industrial promotion schedule in the United States. At that time the company outlined its difficulties due to highly competitive pricing in the mainframe computer market. The company indicated that if the market did not pick up it might then become necessary to look at a reduction in the Swords workforce. Since that meeting, Amdahl announced losses of $240 million for the first quarter of 1993. The company now finds itself in a situation that, to ensure its continued survival, it must reduce production capacity with resultant consequences on staff numbers. Amdahl is in the process of cutting 1,200 jobs from its 8,700 workforce worldwide. As the plant in Swords is Amdahl's only manufacturing operation outside the United States, it is inevitable that Swords would have to bear some of the cutbacks.

During my meeting with Amdahl, we also discussed the possibility of the company introducing some non-manufacturing activities to the Swords plant and this is being actively pursued.

All segments of the electronics industry are kept under constant review and future assessments as to potential and risk are made regularly both by my Department and IDA in conjunction with outside analysts. Digital and Amdahl operate in the mainframe computer market. Although this market is currently depressed, as personal computers and network systems are becoming more adaptable and price competitive, mainframes are here to stay for the foreseeable future. However, there is excess capacity and companies have been responding to this through restructuring.

Other areas of the computer industry, such as personal computers, continue to show strong growth up to and beyond 1996, as new applications are devised. Likewise, microprocessor, semi-conductor networking and telecommunications companies involved in electronics are preforming extremely well. Companies engaged in these growing sectors are well represented in Ireland. We will continue to seek to be in the growth segment of the market to maximise employment.

Given that our electronics industry, particularly the hardwear side, employs 28,000 people and that in the space of three months we have lost 1,000 of those jobs, has the Minister sought from the IDA or elsewhere an assessment of our portfolio of electronics companies with a view to ascertaining whether there may be similar problems as experienced by Amdahl and Digital? Rather than sit passively waiting for something to happen will he take the initiative to head off, in a timely way, any potential closures?

I never sat passively waiting for anything to happen and neither do I intend to in this job. I assure the Deputy, and the House, that the IDA, on an ongoing basis, is monitoring the rapidly changing nature of the electronics industry and is seeking to be ahead of changes so as to maximise our position and to cushion the effect of those changes.

Given the rapid change in the computer industry with developments in mainframe softwear, and given Ireland's need for an expansion of the electronics industry, would the Minister accept that a special investigation by the IDA of developments not only in Ireland but worldwide is warranted to ascertain how we can compensate for the loss of jobs in the mainframe area such as in Digital and Amdahl? To what precisely was the Minister referring when he mentioned the non-manufacturing side and replacement jobs for Amdahl?

I wish to assure the Deputy that the IDA and my Department, with the help of outside analysts, are monitoring, on a regular basis, the rapidly changing profile of the electronics-computer industry. There are three fundamental changes taking place. First, at present nationally and worldwide there is an over-capacity of mainframe computer facilites. That is not to say that mainframe will disappear but it will have to reduce somewhat in size. Second, there is an increasing sophistication of personal computers and mini-computers. We are very much to the fore in capturing more than our fair share of that market in manufacturing terms. In relation to manufacturing generally there is a drift from Europe, particularly from western Europe, of manufacturing activity to the south Pacific. Third, we are in the lead in regard to softwear. Due to the telecommunications evolution in the European Community generally we are better positioned than most to maximise our location for softwear development. In that context we opened up discussions with Amdahl.

Can we take it from what the Minister said that there will not be any further job losses in the sector? Is the Minister not painfully aware that the electronics sector in Ireland has not located any of its primary business functions, such as research and development, in Ireland which leave us vulnerable when the new product cycle comes on and we do not have Irish located capacity to produce new products? Is the Minister concerned that even in the softwear sector the might of the public procurements cheque book in other countries may well render our companies vulnerable?

I shall take the questions in reverse order. I hope the operation of competition law within the European Community, specifically in the area of public procurement, will obviate if not eliminate the kind of distortion in the marketplace to which the Deputy refers. Second, we are attracting increasingly into the Irish economy softwear headquarters and softwear development for most of the main operators and developers of computers worldwide. Third, no Minister could give any assurance of the kind the Deputy sought to the effect that there would be no further job losses in an industry whose shelf life is manifestly much shorter than any other.

The Minister is forecasting job losses.

I agree with what the Minister said in regard to softwear. Would he accept that our greatest weakness in this area is that we do not have the same level of research and development on which this industry depends and which is the life blood of the development of the computer industry and will continue to be in the foreseeable future at an even faster pace? Can he comment on whether the IDA has examined the relationship between our universities and the industry with a view to engendering a greater level of research and development from these major companies? Would he accept that if we had a better balance and investment in research and development, coupled with expansion in the software sector, this would create a more secure base for the softwear industry in the future?

I disagree with the Deputy. If any sector of the Irish third level education system is highly developed and integrated with its sister industrial sector it is the electronics-computer industry, certainly in the softwear area. I invite the Deputy, or any Member to contact the Univerity of Limerick, University College Dublin, Trinity College or Dublin City University where there is an interactive relationship between the industrial and the electronics sectors on the one hand, the IDA and the academic institutions. I have been informed that we are in the lead in Europe in this regard but I invite Deputies to satisfy themselves in that respect.

A Cheann Comhairle——

Please, Deputy Cullen I have time and again appealed for brevity. I hesitate to rule the Deputy out and I will allow him put a brief question.

I accept what the Minister said but the point I was making was that the level of funding available from these companies to this country could be more substantial. If the level of funding in research and development were increased we could continue our relationship with the universities.

We are having statements rather than questions. I am proceeding to Question No. 11.