I thank Deputies for raising this issue. This announcement and the way it was made came as a surprise. I was only yesterday morning that my Department was advised of the serious problems. The agencies were not alerted early to the impending difficulties. Neodata has now announced the closure of its Kilmallock operation with a loss of 36 jobs and the closure of its Newcastle West operation with a loss of 71 jobs with effect from 15 December 1995.
Neodata has four operations in Ireland at Kilmallock, Newcastle West, Listowel and Limerick. It will retain its Listowel operation where 93 people are employed and the Limerick operation which employes seven people. The company's main reason for the closure is that a current major contract will only be retained at a lower level of business in 1996 and, therefore, fewer employees will be required.
Regrettably, as the House is no doubt aware, this is not the first time Neodata has run into problems. In November 1993, exactly two years ago, when the company employed 400 people between their four Irish locations, it announced that it was consolidating all its operations back to Boulder, Colorado, with the loss of all 400 jobs in Ireland. In the event, collaboration between the company and the IDA prevented the loss of 260 jobs with two major contracts being secured.
While the company has been particularly successful in identifying and securing new business for its offices in the mid-west, a drop in demand for the services provided at Kilmallock resulted in the introduction of a voluntary redundancy programme at that office earlier this year. The programme, which involved 35 redundancies, was fully subscribed and was implemented between June and October of this year.
Neodata also implemented a programme of temporary lay-offs last summer involving almost 20 permanent staff. These lay-offs were necessary because of a delay in securing new contracts and to seasonal variations.
The company has now concluded that it has approximately 100 people in excess of what its current order book justifies. While it still has a major contract in the US, and has negotiated another contract for 1996, the work will be at a lower level and accordingly will require fewer people.
In addition, the company's efforts to develop a European market have not, so far, proven successful. Neodata is continuing its marketing efforts in Europe, with the support of IDA Ireland, but this will take time. In the meantime, the company considers that it cannot justify the present levels of staffing. Accordingly, it plans to restructure the Irish operations to have a more cost effective base from which to move forward in the future.
The net result is that the company proposes to close the Kilmallock and Newcastle West Offices. Following this, Neodata would have 100 permanent staff as I indicated. In addition, during 1996 Neodata expects to have up to 100 full time equivalents working as temporary and part-time employees between Listowel and Limerick.
As regards the Task Force for Industry Adjustment, which was mentioned by Deputy O'Rourke, its primary purpose is to identify areas of business at risk from competitive forces and to propose competitive strategies. The task force has approved a "Change Management Programme" which is targeted in particular at providing grant support to enable traditional industries, rather than companies such as Neodata, undertake certain initiatives.
Deputy O'Rourke also mentioned a dedicated jobs task force for the Newcastle West and Kilmallock areas. I do not see fruitful progress being made by setting up such task forces because, increasingly, there would be a demand for them in many areas of the country and this would only dissipate the efforts of the State agencies. Nevertheless, I assure the House that I have directed IDA Ireland to redouble its efforts to find replacement industries in the region. I have also asked IDA Ireland to continue to support the endeavours being made by Neodata to secure sustainable new business.
I can also say to the House that the development agencies have been very active in the region in attracting new industries and assisting in the expansion of others. Companies such as Analog Devices, Dell, Cabletron and AST continue to expand in the Limerick area. They have invested substantial capital and this, coupled with their relationship with the University of Limerick, will ensure that they remain at the forefront of their technologies. In addition, the arrival of new overseas companies such as Vistakon, which will employ 450 people by 1998, and APC, which will commence recruitment of 300 people next year, are positive developments for the area as a whole.
I assure Deputies that every effort will continue to be made to ensure that Neodata has a future in Ireland. Neodata first came to Limerick in 1969. It did so without State assistance as the internationally traded service sector did not qualify for State aid at that time. However, it has been grant assisted in the meantime. It has been a major employer in the mid-west for over 25 years and its ongoing contribution to the economy is very much appreciated.
My immediate concern and that of IDA Ireland will be to see if anything can be done to secure new business and avert job losses, and what can be done about replacement opportunities.