Dáil Éireann díospóireacht -
Wednesday, 13 Mar 1996

Vol. 463 No. 1

Private Notice Questions. - County Cork Job Losses.

An Leas Cheann-Comhairle

I now come to deal with Private Notice Questions on the situation in Apple Computer Company in Cork city and Mitsumi Ireland, Mallow, County Cork. I will call the Deputies in the order in which they submitted their questions.

Before I call members to put their questions, I remind the House that a time constraint applies to the business for today, the Social Welfare Bill, 1996 and an Order of the House deems that it be concluded at 6.45 p.m. As a large number of Deputies are offering, it is suggested that one round of supplementary questions should suffice. I call Deputy Quill to put her question to the Minister.

Miss Quill

asked the Minister for Enterprise and Employment what recent contact he has had with the management of Apple Computer in Cork city; to outline his view on the current worrying situation and to indicate what support this Government is prepared to offer in the event of job shedding in this key industry or in the event of job sheeding in any of the service and supply industries that are dependent on Apple computer for their continuation.

Mr. Martin

asked the Minister for Enterprise and Employment the plans, if any, he has to consolidate and develop the electronics industry in County Cork and the Cork region generally and the further plans, if any, he has to assist the Mitsumi firm in Mallow, County Cork and the Apple Computer plant in Cork city given the thousands of jobs involved and their critical role in the employment structure in Cork city.

Mrs. O'Rourke

asked the Minister for Enterprise and Employment the action, if any he proposes to take to revert the job losses at Mitsumi Ireland, Mallow, County Cork and if he will make a statement on the matter and on the matter of Apple Computer in County Cork.

Mr. D. Wallace

asked the Minister for Enterprise and Employment if he will outline the plans he has for securing the long-term future of Apple Computer in County Cork; if he will detail the contacts he has had with the management of Apple Computer in relation to the future of the plant and if he will use the opportunity of St. Patrick's Day to visit the US management of Apple Computer to impress on it the importance of the Cork plant to the local and national economies.

Mr. B. O'Keeffe

asked the Minister for Enterprise and Employment the action, if any, he proposes to take to reverse the serious loss of jobs in the electronics industry in County Cork, particularly in Mitsumi in Mallow and Apple Computer in Cork city which were announced during the past week, and if he will make a statement on the matter.

Minister for Enterprise and Employment (Mr. R. Bruton)

I propose to take all five Private Notice Questions together.

As a result of the need to balance production with demand, Apple Computer in Cork has laid off 70 temporary workers. Separately, Apple Computer Incorporated has announced in recent months its intention to lay off 1,300 of its 14,000 employees as part of a rationalisation programme. This rationalisation programme has not to date affected Apple's facility in Cork.

As I indicated to the House, I am in constant touch with the situation in Apple and continue to review the question of meeting Apple's US management. In this regard, I assure the House I am anxious to respond in whatever way would best assist Apple in Cork. Some time ago I arranged to visit Apple management in Cork and this meeting will take place shortly.

The Apple facility in Cork has progressively strengthened its competitiveness and, with the help of IDA Ireland, has added additional functions in the areas of software, quality assurance and research and development to its operations. These undoubtedly will be positive factors in any assessment of the future role of Apple's facility in Cork.

Mitsumi Ireland Limited has been in operation in Mallow since November 1990. The company manufactures computer keyboards and distributes floppy disk drives and CD-ROM units. Due to price competition the market for the company's keyboard products had declined. As a result the company has decided to make 82 people redundant over the next three months.

IDA Ireland will continue to work with Mitsumi Ireland with a view to maximising employment at the Irish operation. IDA Ireland and Forbairt will continue to support the electronics sector in Cork with a view to maximising employment in the sector.

Miss Quill

I am pleased to hear the Minister will soon meet the management of Apple Computer in Cork. As he said, 70 temporary jobs have been lost. There are about 1,200 jobs dependent on the continued employment of that workforce. The Minister set up a special early warning unit in the Department when problems arose with Packard recently. Did officials in that unit contact Apple headquarters or any of its service industries to enable early action be taken in the event of job losses or job shedding in the Apple plant or other plants that serve it?

Mr. R. Bruton

The early warning mechanism in the case of Apple would be primarily the IDA. Perhaps what the Deputy is referring to is a group in the Department which is working on industrial adaptation and which is primarily aimed at smaller companies trying to reposition themselves in the market, not at large companies of the scale of Apple. I have been in very regular contact with the IDA with a view to finding the best way for Ireland to be supportive of Apple. One must be very sensitive to the advice of the IDA, which is at the front line in this field, and I am ready to act on that advice at all times. I will meet with Apple management in the very near future so as to be fully appraised of its view. The IDA is the key adviser in terms of early warning and will stand ready, as it has done in the past, to assist Apple in its development.

Mr. Martin

Will the Minister agree it is time he adopted a hands-on approach to the issue? While accepting the very important advisory role of IDA Ireland in the future of the Apple computer company and the electronics industry generally, given international speculation on Apple does the Minister agree that rather than simply reviewing whether he should meet with worldwide management, he should be proactive in that regard? Does he agree he should personally intervene to seek a medium to long-term strategic approach to the future of the electronics industry in the Cork region, given its incredible importance to the employment infrastructure of that region? A pyramid structure is being built up in a number of industrial estates of which that industry forms a core part. Everybody in Cork is aware of the downstream impact of difficulties in this sector, which justifies a proactive, hands-on interventionist approach by the Minister.

Mr. R. Bruton

I assure the Deputy that not only am I taking IDA advice in this matter but I will also take the advice of local management. I will be available to do whatever is necessary to assist Apple in ensuring that what is a quality performing plant with additional strengths in software and research and development will remain a key player in this area. No decision has been taken by the company on future strategic plans. The Deputy will accept it would be foolhardy for a Minister to act in a way that is not in tenor with the approach and strategic thinking of local management and the IDA on when it is timely and in what way to assist. While I share the Deputy's anxiety about being active in every way, I will be active in a prudent way, taking account of the best advice from local management and the IDA on the steps I should take.

Mrs. O'Rourke

Prudence is one thing, bolting the door when the horse has gone is another. Two months ago during Question Time I asked the Minister if he would meet Apple here and in the United States. He now says that he hopes to meet that company in the near future, but that is not good enough. There were early warning signs in this case. I am very conscious that the Cork Deputies have the most rightful say in this matter but, since my portfolio is Enterprise and Employment, I am concerned about this matter. I hope that the early warning signals we are all receiving do not come true. I fault the Minister for not being more active in this regard. I accept he must take advice, but there is a clear signal that something is wrong and he should do something about the matter.

In regard to Mitsumi, something has obviously gone very wrong. As a result of its decision, half of its workforce will have been let go in five years. Will the Minister say what meetings he has had with that company and what measures are being put in place by the employment protection unit of the Department to offset this catastrophe — the loss of 70 jobs in a town the size of Mallow is a catastrophe?

I echo the views of my colleague, Deputy Martin. The electronics industry has been hyped up beyond expectations, with a resulting downturn in terms of redundancies. The very valued role of the electronics industry must be considered in a common sense way rather than a way of attracting more companies only to find after a short time that they have come adrift. That industry should be considered not in terms of immediate short-term gains, with glitzy announcements, but in a longer term strategic way, with a view to achieving permanent jobs.

Mr. R. Bruton

While the perception is that the electronics industry is hyped up — it is very much the buzz industry at present — one must be aware that this is an area with very good core skills and competitive strength, and our strategy must be to increase that competitiveness. It is instructive that in the case of Apple, for instance, we have been very successful in terms of research and development and attracting strategic elements of the electronics sector to locate in Ireland.

Inevitably in an industry such as this which changes so rapidly there will be casualties. The difficulty with Mitsumi is that its product, keyboard manufacturing, is no longer cost competitive with some of its competitors in the Far East. In reviewing the electronics sector we must ensure we are well placed. Mitsumi plans to develop further the distribution end of its business so that it will not only secure the remaining jobs but build a stronger base for that aspect of its activity. It is inevitable in an industry such as this that at times certain elements will experience difficulties.

The lay-off of 70 people at Apple, is in no way linked to the strategic restructuring being considered by Apple senior management. The lay-off of long-term temporary staff is related to a downturn in the speed of growth in the market, and Apple has assessed that its inventory levels are sufficient to meet forthcoming market demand. There has been a slight deceleration in the pace of growth in this as in other areas, but growth is still enormous in this sector. The lay-offs in no way signal problems for Apple in terms of the quality of production or capabilities of the plant in Cork in the long-term.

Mr. E. O'Keeffe

Has the Minister had any discussions with Mitsumi at international as well as local level because the company has been experiencing this problem for quite some time past? As product development is the key to the maintenance of multinationals here, what are his Department's plans in this area? It is obvious from the lack of product development in the Minister's Department that its industrial policy is a shambles, especially in the electronics and computer sector. Will the Minister spell out his departmental policy for product development to save the multinational segment of our computer industry?

Mr. R. Bruton

The Deputy's insinuation is completely over the top and does not bear any relevance to the matter we are discussing. Indeed my Department's policy of developing strength in the electronics sector is there for all to see. Even recently we have witnessed the massive expanison of the wafer fabrication unit of INTEL——

Mr. E. O'Keeffe

INTEL is in trouble as well.

Mr. R. Bruton

—— one of the most advanced strategic product developments, technology capable of doubling the speed of electronic activity compared with what had been there previously. One could go down the list of the many electronic companies established here, all expanding——

Mr. E. O'Keeffe

——on the downward spiral.

Mr. R. Bruton

——very rapidly, such as Hewlett Packard Ireland and Seagate, both examples of rapidly expanding companies.

Mrs. O'Rourke

All including INTEL, are running into problems.

Mr. R. Bruton

None of those companies is laying off workers but recruiting and expanding on the basis of the very best technology. Equally, within the Irish owned electronic sector, some of our software companies have been outstanding in developing product and many have formed strategic partnerships to develop Irish-based and developed product to be sold internationally. Therefore, the Deputy's criticism is wide of the mark. Because of its vibrancy and capability of producing strong new products for the future, our electronics sector is the envy of very many countries.

Mr. M. Ahern

Will the Minister state whether, within the terms of the operational programme for which some £22 million were allocated to cater for industrial readjustment and early warnings systems of impending problems within the industry, in the case of Mitsumi if the IDA or the Minister's Department had any dealings with the company or made any funds available to assist it? I find it very strange that the Minister of State, Deputy Rabbitte, had nothing to say on this matter, especially since his colleague in Mallow, so vociferous over many years, had nothing to say about the overall reduction in jobs in Mallow and the Cork East constituency. The Minister should convey that message to his Minister of State.

Mr. R. Bruton

I assure Deputy Michael Ahern that the Minister of State is part of a very effective team working within our Department but he does not have responsibility for the specific questions tabled. Indeed, the Leas-Cheann Comhairle would be the first to tell him to desist from speaking on such an issue. Nonetheless I assure Members opposite that the Minister of State shares my concern for the development of a strong industrial base in Cork in which there were significant recent developments, one in Youghal, demonstrating our strong commitment to Cork.

I also assure the Deputy that the IDA has been working with Mitsumi to ensure that any assistence that can be given will be made available. In this instance the difficulty is that the company assessed its position and decided that the particular product line in which they have been engaging is no longer competitive in the market place. We are not in a position to contradict its assessment. The company knows the commitment and support of the IDA will continue throughout its future operations within which we foresee its capacity to develop further.

Mr. D. Wallace

I recall on the occasion of the Minister's visit to the plant there was an announcement of some 600 additional jobs, demonstrating how the position has changed within a very short period. Since the Apple plant at Holly Hill represents a crucial part of the industrial life of Cork city, particularly on its north side — which has suffered more than most communities from the scourge of unemployment — it is vital that everything is done to ensure its short and long-term future. I assure the Minister and his Cabinet colleagues of my full suport in so doing. In addition to putting the full weight of the State job creation agencies behind the Apple plant, it is important that the company is given every opportunity to win its fair share of the computer market, especially from State and semi-State agencies.

I tabled a number of parliamentary questions recently to various Government Ministers on the level of business given to this company by the State. The replies I have received to date, from the Departments of Finance and Education, do not indicate a high level of State purchases from Apple, further emphasising the importance of Apple winning its fair share of future State business in computer supplies. While the net value of such purchases may not be huge in international terms, such State business would substantially reinforce a message of support for Apple. I stress that point since Apple did not feature recently within the top ten computer companies. I tabled similar parliamentary questions to other Ministers but have been given no reason to be confident in relation to them. I strongly appeal to the Minister to become directly involved in Apple as there is no point in waiting until the horse has bolted before closing the stable door.

Mr. R. Bruton

I assure Deputy Wallace that I shall not be in any way dilatory in taking appropriate action but I want to be sure that whatever I do will be helpful to the company.

The Deputy raised the issue of public bodies purchasing products from Apple. I have been briefed in that respect but I know that public bodies operate fair contracting systems and would examine all companies that tender fairly. Indeed the very many Irish-based companies that tender is evidence of the success of our electronics sector. Because Apple produces such quality products, I am sure it will be given equal opportunity, particularly in the case of its new development activities beyond its traditional manufacturing one. I am totally committed to working with Apple to secure its future.

Miss Quill

Has the Minister set a date?

Mr. B. O'Keeffe

It appears that the Minister received an early warning in relation to difficulties at Apple, which he did not heed. Since there have been layoffs at the plant recently, can the Minister understand workers' fears of further redundancies, bearing in mind especially that, when it came to Hewlett Packard, any microphone or television camera available to the Minister and his Minister of State was availed of to announce good news? I envisage those workers now saying that when such favourable events took place in the backyard of the Minister or Minister of State, they were not slow in coming forward. Does the Minister agree it is inexcusable for him to say today that he will endeavour to arrange a meeting with the Cork management of Apple, especially since he would have known of impending difficulties at that plant for some considerable time past? He neglected to take any action to stave off difficulties within that extremely important industry and any reduction in its workforce would have massive consequences for the city of Cork.

What Deputy Dan Wallace said here is also important because, at a recent meeting of the Committee of Public Accounts, Members ascertained that in the Valuation Office £800,000, almost £1 million, worth of high-tech computer equipment was sourced from the United Kingdom and the USA. Sourcing of equipment is part and parcel of many decisions to locate in such countries. In the interests of the people of Cork and the workers in this company, the Minister should meet the firm's international management while he is on his travels over St. Patrick's weekend to ensure these jobs are saved.

Mr. Finucane

The Deputy referred to Hewlett Packard whereas he should have referred to Packard Electric. The former is a separate company in its own right.

Mr. R. Bruton

The two companies are not related. Hewlett Packard is in the electronics sector and Packard Electric is in the harness sector. Their difficulties are unrelated. The latter's problem was essentially one of industrial relations when we were actively involved with it. Apple's problem is not related to its restructuring plans. The early warning is in relation to restructuring and there is concern that as Apple reassesses its position we must ensure that its strong plant in Cork is successfully protected. The present lay offs are related to an inventory build-up within Apple. A slower pace of growth in the market than the company anticipated is behind the present problem. There is a slight blip in the pace of growth in this sector, with which other companies have also had to deal. I assure the Deputy I will meet with local management.

Miss Quill

When?

Mr. R. Bruton

I will take appropriate steps to support its efforts in a way which is helpful to it.

Mr. B. O'Keeffe

That is a laissezfaire attitude.

Mr. R. Bruton

It is not.