The first three items for debate on the Adjournment relate to the closure of Motorola in Swords and are being taken together. Each Deputy will have five minutes and the Tánaiste will have 15 minutes to reply.
Adjournment Debate. - Job Losses.
I thank the Ceann Comhairle for affording us the opportunity of raising this important issue. It is with a deep sense of sadness I address the House and the Tánaiste following the decision taken by the management of Motorola in Chicago to outsource its manufacturing base in Swords, with such drastic repercussions for the workforce. The decision was taken, we are informed, without any consultation with the workforce, the IDA or the Tánaiste and is a chilling reminder of the risks inherent in a reliance on multinational capital.
Like many people in Swords, the wider Dublin area and Counties Louth, Meath and Kildare, I was shocked and annoyed at the manner in which Motorola announced 750 job losses at its plant in Swords. This is a cruel blow only weeks before Christmas. A total of 750 workers, with mortgages and families to support, have been abandoned by Motorola. These workers have given years of dedicated service to the company. They have played a leading role in establishing Ireland's reputation as a location for the technological and communications industry.
It is beyond belief that the company would treat its staff in this callous manner. However, it is our duty to look to the future. The 750 workers who have lost their jobs need every assistance from State agencies such as FÁS and the IDA to find new, well paid employment. The job losses will have a devastating effect on the economic life of Swords and the wider catchment area of north County Dublin. No stone should be left unturned in our efforts to find new opportunities for the workers.
This Government must guarantee the 750 workers who have lost their jobs that every effort will be made to assist them in securing new employment. A skills audit of the workforce designed to update workers for current employment opportunities in the high-tech sector must be conducted immediately and training courses should be put in place if necessary.
I note from the Tánaiste's statement yesterday that she is confident the Motorola workers will find new employment. I was somewhat taken aback by the certainty of her statement but I accept that a number of companies in the technology sector are currently seeking workers. It is essential that these vacancies are matched with the Motorola workforce. I urge the Minister to ensure that the company provides an immediate opportunity for alternative employers to meet and interview workers on site at the Motorola plant. Given the scandalous manner in which Motorola treated its staff in the last 24 hours, the company should be put under pressure to facilitate this initiative.
There is also an obligation on the Tánaiste to ensure that the IDA does everything in its power to attract a new investor to the Motorola plant. A state of the art factory will lie idle in the heart of north Dublin. The Tánaiste must take the lead in finding a replacement industry for the plant. Motorola now joins the bleak list of names such as Packard, Seagate and Digital which are associated with massive job losses in our economy. The job loss yesterday is, without doubt, one of the largest we have experienced in recent years.
We can never be complacent about redundancies or job losses. There is a real story of personal hardship and tragedy behind every worker made redundant. Priority must now be given to the workers at Motorola who have suffered such a cruel blow so close to Christmas.
The announcement yesterday of the loss of 750 jobs in Motorola in Swords is a catastrophe both for the workers concerned and also for the Swords area and the north Dublin region generally. It is particularly devastating coming so close to Christmas, a time when people plan to be with their families and enjoy their free time. Could the Tánaiste clarify why this company is closing down this number of jobs? In August 1999, the Tánaiste was present when a major high profile announcement was made that 500 new jobs were being created in Motorola to bring the workforce to 1,700 people. The current workforce stands at 1,400 so even that promise was not delivered on. Were there any signals given to the Tánaiste at that time? Now we have this catastrophic news of the loss of 750 jobs.
Can the Tánaiste tell the House how long she has known about these losses, what actions she took to prevent them and what actions Enterprise Ireland and IDA Ireland took to save these jobs, if at all possible? I have been told that these jobs are going directly to China. Could she confirm that or tell us whether she knows where the work done by these workers is now to be done? Is there any truth in the rumour that strong pressure was put on Motorola UK to avoid announcing these losses on budget day so it would not interfere with the hype of the budget? That would be disgraceful if it was the case. It may explain the unwieldy and unsatisfactory way in which the employees heard about the losses. Can the Tánaiste give any indication whether the job losses are as a result of overcapacity in the mobile phone market and the high wage costs due to Ireland's high inflation rate? These are the other reasons I have been given for these lost jobs.
If these losses are in any way due to overcapacity in the marketplace, one would have to be concerned for other sections of the telecommunications industry and the mobile phone industry which have expanded so rapidly in Ireland. It is essential that the Minister confirms she is satisfied that these announced job losses are not the first in a series of job losses countrywide in this industry.
Motorola, as a company, has given great employment for hundreds of people living in Swords and the surrounding towns and villages of north Dublin. Many people have received excellent training with Motorola and have gone on to other high-tech firms, both in Swords and elsewhere. Many of the workers are young people and I hope that because of the skills they acquired in Motorola, they will not have too much difficulty in finding other work. However, many have purchased homes for their families in Swords and the neighbouring areas to be close to their workplace. These people may now find they must seek employment in Blanchardstown or further afield, thereby adding to the enormous traffic congestion on the M1 motorway and on all access routes from north Dublin into the city and elsewhere, every morning and evening. Many other employees have been renting properties in Swords. The job losses will also have a disastrous effect on these rent arrangements as people may have to leave at short notice to seek employment elsewhere.
There is never a good time to make these announcements but I am critical of how the announcement was made, particularly vis-à-vis a large number of employees who left their shift work in the morning at about 7.00 a.m. and woke in the early afternoon to hear the news on the radio or receive it by telephone from colleagues who were at work when the announcement was made.
This is not the way to inform a dedicated workforce about the loss of their jobs. I ask the Tánaiste to indicate my annoyance to senior management on this issue. This type of discourtesy and lack of consideration happens too often when these kinds of announcements are made. It is a matter for the Tánaiste as Minister for Enterprise, Trade and Employment, to speak with the management of these companies to make sure the employees are properly informed about pending doom in as sensitive a way as possible.
I note that 650 of the 1,400 will be maintained by Celestica, who will purchase the Motorola plant in Swords. I remind the Tánaiste of what she said in August 1999 when she paid tribute to the skills base. She said that it is a fantastic facility in Swords and would get much bigger. Unfortunately, her word have not come true. Not only have all 500 jobs promised then not materialised but now we have this terrible blow. I understand that even as we speak, a full staff meeting is taking place. I hope that a proper redundancy package will be prepared for those leaving which might help somewhat. I urge the Tánaiste to seek out a new industry to take over the fine facility of Celestica which will be available when they move to the Motorola plant in Balheary.
I share with my two colleagues the sheer disappointment, about which I had a chance to talk to the Tánaiste in the past 24 hours, regarding this most untimely announcement of the loss of 750 jobs and the outsourcing of certain parts of the Motorola operation at Swords. As my colleagues rightly stated, the timing of this announcement and the way it was made left a great deal to be desired. It is very difficult for young people who gave a tremendous commitment to a company and have shown that by their skills, to be treated in such a way over the past 24 hours. It is not the way to do business. We have heard a great deal in politics and business recently about communication and the lack thereof. This was one example of how not to do business, one which, if it concerned an Irish company, I suspect would cause an outcry currently in the context of how business is done and the management involved.
The Tánaiste had to deal with this type of announcement in her own constituency in past years. It is not easy. I was in Swords earlier this morning to meet various community groups. Those who should know what is going on in the community, such as ourselves, leaders in the community and various other organisations in Fingal, had absolutely no knowledge of this announcement. I thank the Tánaiste and her office over the past hours in the context of how she hopes to deal with this matter. I asked that as a first step, subject to the type of groups that should meet the Tánaiste, every effort is made, on which she and her office have given a commitment, to make sure every State agency and power within her remit is made available to those unfortunate people that between now and the end of January will be without a job. Every effort should be made to ensure that the types of skills that we are aware are available, will be assessed, as my colleague Deputy Ryan stated. An assessment should be made so that we know the resources available in the area for other companies to avail of. We should make every effort to repair the devastation of such a loss.
I remember being part of a council in which there was tremendous excitement, when Motorola first came to Swords in the mid-1980s, about this plant in a greenfield site. It has given tremendous employment over the past ten to 15 years in Swords. It is a phenomenal facility which should not go to waste and one which should be marketed at the highest level by the IDA and other groups. We are extremely lucky that a sister company is in Swords, that we are not talking about the loss of 1,450 jobs and that 650 will be saved. I hope with the proper expertise, that between now and the spring of 2001, we can avail of opportunities and bring another company into the area.
There is no better place than the Swords and wider Fingal area to market for an investment of the type which currently needs to be replaced. Swords has a location beside the airport, it has motorways, the Belfast-Dublin corridor and the tunnel. Every service needed is in place. We now have the skills of a young, committed workforce. The IDA and all its sister companies and State agencies should be brought to bear to ensure that a proper effort is made to replace this plant. All the elected representatives for the area will do what we can to encourage the type of investment that has come to Swords and Fingal in past years. Will the Tánaiste, as soon as possible, meet the various groups which have contacted us to discuss the efforts she intends to make within the Department and the agencies under its aegis to replace these jobs?
I thank Deputies Owen, Seán Ryan and Wright for raising this matter. Deputy Owen suggested that the company was asked not to make this announcement prior to the budget. I do not know who implied that but I hope it is not being suggested that either I or IDA representatives asked the company not to announce the job losses prior to the budget.
I was very disappointed to learn of the decision by Motorola to dispose of its facility in Swords with the loss of 723 jobs. I was informed of the decision to sell the plant to Celestica by Motorola management on Tuesday evening last. Motorola and Celestica management visited the IDA on Tuesday morning. The IDA contacted me as I was returning from Brussels and the management came to see me in my Dáil office at 5 p.m. that day.
Motorola commenced operations in Holylands, Swords, in 1989 to manufacture batteries, pagers and two-way radios. Employment reached 1,300 but due to a major slump in the paging business and an overall downturn in Motorola's business worldwide, employment at the Swords plant fell to 1,100 in mid-1999. However, in August 1999, due to the quality and past performance of the Irish plant, it was decided to introduce cellular phone manufacture to substitute for the loss of business in the paging products which transferred to the Far East. This involved an investment of $30 million. Employment had increased to 1,400 at Swords and was expected to grow to 2,500 by the end of the year 2001.
However, Motorola is now involved in global restructuring, driven largely by cost pressures and excess capacity. On 6 December 2000, Motorola and Celestica announced a strategic manufacturing worldwide alliance with a total estimated value of more then $1 billion over the next three years. Under the terms of the agreement, Motorola will sell its manufacturing operations in Dublin and Iowa to Celestica for approximately $70 million, subject to post-closing adjustments and will outsource the manufacturing of some cellular phone handsets, massaging devices, two-way radio products and accessories to Celestica. This is the second outsourcing agreement Motorola has announced this year. This agreement is part of a long-term company-wide strategy to improve supply chain efficiencies, consolidate manufacturing and restructure to improve its financial performance. For Motorola, the manufacturing consolidation will result in the elimination of approximately 2,870 positions out of a total workforce of 130,000 worldwide.
The agreement is expected to close in the first quarter of 2001. Celestica will continue manufacturing the products and accessories I mentioned earlier for at least two years in Dublin and will offer positions to approximately 650 of Motorola's 1,400 Dublin employees. Severance and outplacement benefits, as well as the opportunity to apply for other positions within Motorola will be provided to eligible employees. Redundancies, which will be on a voluntary basis, will begin to take effect in the first quarter of 2001 and will be completed by the summer. Motorola management has informed me that the first redundancies will take effect from late February-early March.
The restructuring agreement with Celestica will not impact on Motorola's Cork operations in which more than 500 people are employed. With more than 25,000 employees worldwide, Celestica operates 33 manufacturing and design facilities in the United States, Canada, Mexico, the United Kingdom, Ireland, Italy, the Czech Republic, Thailand, Hong Kong, China, Malaysia and Brazil. Celestica provides a broad range of services including design, prototyping, assembly, testing, product assurance, supply chain management, worldwide distribution and after-sales service. Its customers include industry leading original equipment manufacturers, primarily in the information technology and communications sectors. There is an increasing requirement for contract manufacture in Ireland and Celestica would hope to grow its Irish operation in line with market growth, particularly in the fast expanding telecommunications sector. It has moved significantly to high end and more complex products for such customers as Hewlett Packard, Lucent, Sun etc., and is recognised as one of the major players in optical networking technology.
Motorola's Swords facility is located in Fingal. Fingal has outperformed every region in Ireland over the past decade in terms of IDA-assisted companies. These companies employed 2,500 people in 1990 and currently employ 12,000 in permanent positions, an increase of 400%. Year 2000 results are expected to confirm that this growth is being maintained. Workers at the Swords facility were drawn from a wide catchment area including Meath, north Kildare, west Dublin, north Dublin, the city centre and other locations.
Major expansions and recruitment campaigns are being undertaken in Fingal by IBM, Symantec, Bristol Myers Squibb/Swords Laboratories with a £300 million investment programme currently being implemented at both Blanchardstown and Swords. Companies such as Celestica, 3 Com, Sanmina, Benchmark Electronics, Teradyne and Lucent Technologies are all recruiting. The IDA is developing a 250 acre college technology park in Blanchardstown in conjunction with Fingal County Council. This is the location for the Blanchardstown Institute of Technology.
Other IDA developments in North Dublin outside the Fingal area, mostly at Clonshaugh Industrial Estate, include a 463 job expansion for Solectron which was approved in April and a 145 job expansion at a job global centre start-up at Clonshaugh. Each of these data centres involve an average investment of £30 million.
Intel in Leixlip is also recruiting for its Fab 24 plant in which it hopes to employ an additional 1,000 people. The overseas ICT sector in Ireland includes many of the world's leading companies, producing systems hardware and software. The total number of companies is close to 300 and direct employment is approximately 50,000. Employment has shown substantial growth in 2000 with close to 7,000 new jobs having been created. A number of firms have experienced shortages of labour during the year, although an active programme of new educational courses is expected to remedy this situation in the short to medium term.
The sector includes many industry leaders in such sectors as semi-conductor designs and fabrications, computer systems and software and telecommunication systems. The activities carried on by these companies in Ireland have become much more diverse in the last number of years, taking advantage of Ireland's strengths in technology, education and broadband connectivity. These activities include manufacturing, software development, e-business, shared services and Internet and voice based technical support and sales, licensing management and research and development.
Overall, the sector is expected to grow substantially over the next few years, driven by the increasing pervasiveness of e-business and mobile communications. It will, however, continue to change, one trend being that of primary producers continuing to outsource some core activities to third party contract manufacturers.
The IDA has an active programme of encouraging Irish based companies to add additional high value functions to their Irish operations which will give them the ability to respond to changing market conditions. FÁS staff in the Dublin North region have been in touch with Motorola to offer assistance which will enable employees to find alternative suitable employment. The local Jobs Connect contact centre in Baldoyle and the employment office in Swords are available to meet all the staff who are affected by the redundancies and this offer was confirmed to the company's human resource department yesterday evening. The human resource depart ment has indicated that it will be in touch with FÁS when a clearer picture emerges of the people who are unsuccessful in securing employment with Celestica.
I do not propose to establish a task force in Swords as a result of the proposed redundancies but I will meet with workers' representatives and any other local interest groups in regard to this matter. FÁS and the Local Employment Service will offer assistance to workers who are made redundant. I discussed the proposed redundancy package with the company and while a redundancy package can never be described as generous because people would rather have their jobs, the company intends to offer a very reasonable package.
Motorola has had some very disappointing results in the past year. The anticipated growth in the mobile phone business has not materialised; in fact the market is down by about 20% and the company lost substantial market share to Nokia, one of its main competitors. That is why the company is involved in global restructuring.
I want to pay tribute to the quality of employment provided by Motorola in Ireland. I had an opportunity to visit the Motorola headquarters in the United States on two occasions during the past three years. They are exemplary employers. I am disappointed to hear the comments of Deputies regarding the method in which the message was communicated to workers. When they told me at about 5 p.m. on Tuesday, they said it was their intention to communicate with the work force the next morning and then make a public announcement.
It is right that employees should hear from their employers that they will lose their jobs and not hear it on the airwaves as, unfortunately, so many employees have done in the past. If that did not happen in this case for some reason, I regret it but I am certain it was an oversight rather than the intention. The clear intention on Tuesday was to inform all the employees before any public statement was made.